The Baltimore County union., 1881-12-10
WHAT A CORNER IS.

A stock corner is thus explained by the n. Y.
Ereaisg Poet: The "bear element in the market
consists Of all those who think that prices Of
eurities are higher than they ought 90 be. higher
than they can permanently remain. In order TO
take advantage Of the unwarranted ''inaation Of
values rs they understand Il, they borrow stocks
and sell them at the high prices Prevailing, ex-
peeting 20 be able 10 buy them In at lower prices
before Il becomes necessary TO return the borrow
ed securities. For instance. A borrous from b
i.0o0 shares Of Hannibal A st. Joseph, which 10
selling at sixty. Apays s6e. .ooo cash and agrees
20 return the stock on demand, when. Of course,
the money will be refunded 10 him. II Is for Be
interest 20 lend the stock because he gets the in
terc.i on the 500, 900 during the interval or. at all
events. interest than be would otherwise have
20 pay for the use of the money. Under ordinary
conditions d. the lender Of the stock. will pay A.
the borrower, something Cor the use Of the money.
but IL the particular stock wanted by the bears l.
scarce. IL will be lent 'hst." that is. the borrower
will receive nothing for the of the money while
the loan continues. In extreme eases the lender
may even get a commission for the use Of stock In
addition 10 the interest on the money which u
represents. II the market huetaates while the
loan continues, the bsrroSer aad lender settle with
each other At the close of each day, that the
amount Of money shalla all times he exactly equi-
vslent TO the value of the stock.
When the bears. or any portion Of them, have
diseerned . weak spot In the markst-that 10 y
security selling for more than Il s worth in their
opinion--they borrow aud sell Il literally. Their
selling has the same effect In putting down the
price as though the stock were absolutely their
own and their expectation is. that other holders
observing decline in the price will become alarm
ell and sell also. thus putting down the prices still
more and frightening still other holders. They
intend. Of course, 20 buy enasgh At the lower
scale Of quotations TO deliver back whatth have
borrowed. pocketing the difference.
II sometimes, though rarely, happens that = few
persons. discovering what the bears about aud
believing that they (the bearsl are strong enough
To stand heavy loss without breaking. quietly
buy up all of particular stock that exists. In
order that the price may not be forced mp while
they are Themselves buying they lend stock freely
90 the bears and thus encourage the latter TO SELL
When they have secured all. nearly all, Of the
particular stock that exists they call In their loans
The bears are then compelled TO buy. and since no
Stock or very little. s for sale. the price can be
forced up 10 any figure at which the eornering
party choose 20 put 10. The "shorts" must come
mp and settle on such terms as may be dictated 10
them. The last resort is 10 leave the eornering
party saddled with the whole issue Of the stock in
question. Whether they make or lose BY the oper-
alton will depend upon whether they can extert
| from the bears more than enough 10 compensate
them for the loss they may incur In reseiing the
stock 20 the general public. Most commonly the
eornerins party, well the eornered, lose mon.
cy. which has been gained meanwhile by the mul-
titude Who have takea advantage Of the high
prices 10 cell out For this reason corners have
| iatteriy been Of rare occurrence.