The Cecil Whig. [volume] (Elkton, Md.) 1841-current, 1881-12-17
WHAT A CORNER IS.


\ Stock corner is thus explained by
The y. \. Evening Post" The bear
element in IL" market consists OF
ail those vino think that prices Of Sc
curIties are higher than they ought
20 he, higher than they can perman-
emily remain. Ia order to take ad-
vantage Of the unWarranted inha-
zion of values as they understand
il, they borrow stocks and sell them
at the high prices prevailing, expect
ing 20 lie able TO buy them in at low
er prices before it becomes Necessary
to return the borrowed securities.
For instance, \ borrows from B :
00o shares Of Hannibal x st Joseph,
which Is sell!n" at SIXTY. a paws b
SEQ, cash ana agrees to return the
stock on demand, when of course, the
money viii hc refunded to him 1t
is for BIS interest to lend the stock.
because he gets the interest on the
500, eco during the interval or, at all
events. moro interest than he would
otherwise have to pay for the use of
the money. Under ordinary condi-
tions Is, the lender of the stock, will
pay \, the borrower, something for
the use Of the money, but if the par
ticular stock wanted by the bears is
scarce, it will he lent flat, that is,
the borrower viii receive nothing for
the nse CT the money while tie loan
lender may even get Il commission for
the use of stock ia addition to the in
terest on the money which 1t repre-
sents. If the market tuctuates while
he loan continues, the borrower and
lender settle with each ether at the
close Of each day. so that the amount
Of money shali at Ill times he exactly
equivalent to the value of the stock.
When the bears. or any portion Of
them. have discerGed a weak spot in
the MARKET hot is a security selling
for more than it is worth in their
opinion-they borrow and sell it lib
orally. 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 alarmed and
sell also, thus putting down the prize
es still mere and frightening still other
holders They intend Of course, to
buy enough at the lower scale of
quotations to deliver back what they
have borrowed, pocketing the differ
ence.
1t sometimes, though rarely, hap
pens that few persons, discovering
what the bears are about and believ-
ing that they (the bears) are strong
enough to stand heavy loss with
out breaking, quietly buy up all of
a particular stock that exists. In
order that the price may not be fore
ed up while they are themselves buy
ing, they lend stock freely to the bears
and thus encourage the latter TO sell.
u hen they have secured all, or near.
~ all, Of the particular stock that ex-
ISIS they call in their loans. The
bears are then compelled to buy,
ana since stock, or very little, is for
sale, the price can be forced up to
any figure at which the cornering
party choose to put it. The "shorts"
must come up and settle Oh such terms
rs NAV be dictated to them The
last resort is to leave the cornering
party saddled with the whole issue
Of stock in question Whether they
make or lose by the operation will de-
pend upon whether they extort from
the bears more than enough to COM
nensatc stock to the general public.
Most commonl V the cornering party,
as we'll as the cornered, lose money,
which has been gained meanwhile bv
She multitude who have taken advan-
tage u the high prices to sell out.
For this reason corners have latterlv
been Of rare occurrence.