Wheeling register. [volume] (Wheeling, W. Va.) 1878-1935, 1882-11-06
PETROLEUM.
The Present Boom 10 the Penn
sylvania Oil Market.
How and by Whom the Speculation is Car
ried 0n-The Fortunes That
Are Made and Lost in a
Day.
SATURDAYS FURRY AT PITTSBURGH,
Snrcinl 10 TIE ReniStsr.

PITTSBURGH, November 5.-For the past
week Pittsburgh has been given over to
politics and speculation in oil. This latter
method of wealth.g getting seems to be the
popular craze Just now, and few words
regarding the way in which the business is
conducted and the extent of the operations
in the oleaginous fluid may be of interest,
as conducted in the oil exchanges of this
city, New York and Oil City. Speculation
in oil is probably the most legitimate of
any such like business. 1t is certainly
much more legitimate than dealing in
wheat options. A dealer on the oil ex.
change does not buy an imaginary thing,
but the real oil, or, more properly, GER
tifcate of the United Pipe Line, that so
much oil is in its tanks. 1t is these GER
tifcates that are dealt in. Each certificate
calls for
One Thousand Barrels OF OIL.
and no more certificates can be issued than
there are thousand barrels OF oil in the
tank OF the Pipe Line. For an over issue
of these certificates the officers Of the
United Pipe Line Company would be as
amenable to the laws as the officers OF q
bank would be fer the over issue Of stocks.
Although no more certificates can be issued
than there is oil above ground, yet it often
happens that in a single day more oil is
sold than there is in the whole country.
This happens from the great number of
sales and resales. A buys certificates for
10000 barrels of oil from B, who sells the
same again to Q, who in his turn sells to ID,
and be turns them over to +, and it ap-
pears in the reports that 10000 barrels OF
oil were sold. All these operations are
Conducted on Cash Basis.
But it frequently happens that purchaser
has not as much ready cash as he would
like TO invest, in which event he puts up a
forfeit of ten cents per barrel and the bal
lance is supplied by his broker or banker.
All trading on the exchange must be done
through its members, the number OF which
is limited. The oil certificates are re.
garded by the banks as good securities and
money is readily advanced on them, in
which case the operation is as follows: A,
who only has 81 900 in cash to invest, wants
to purchase 10000 barrels Of oil at, say So
cents per barrel. He purchases certificates
for that amount, paying ten cents per bar
rel upon them. The certificates are then
deposited in the bank and on them as
security, the bank advances to A the 73
cents per barrel or $500 necessary to
Mako His Purchase Good.
For this loan the bank charges A six,
seven, eight or ten per cent interest or
whatever the carrying rate happens to be
at the time. Now suppose oil advances to
95 cents, and A sells, he cleans up at
profit Of l2 cents barrel, or 81 200, from
which must be deducted his commi ssion
to his broker OF $50, and his interest to the
~ ha 10
little, according to the length OF time he
has had the money. This whole transac
ton may take place within day or two,
or within few minutes, though so large
an advance in SiSh sinGlse ndass ndassym yms it, this
bank calls upon him for further margins,
and if he fails to put up, sells the OIL 10
save itself. A number OF banks have
clerks right on the floor of the Exchange
SO that business can be very expeditiously
handled. The transactions are conducted
for the most part by certified checks, and
il is the business Of the clerk 10 see that
broker
Does Not Oyerdraw His Account.
II is a aommon occurrence to see a broker
with certified checks for fifty, or one, two
or three hundred thousand dollars on his
percon during the hours the exchange Is
open. In the exchange the scene is always
lively. and some times reaches high state
of excitement. The exchange in this city
occupies rooms in the Germania Dank
building. on Wood sire ct. Connected with
il are three telegraph offices and the desks
of the various clerks. In the centre OF the
room is a space about thirty feet long and
eight wide, rallied off. This is the famous
"Bull Ring" around which the brokers
stand when making and clinching public
offers OF sale. OF course time is an OBJECT
and the brokers
Make the Best Of IL.
Sales and resales are made as rapid as
thought. At the time sale IS made the
buyer and seller each make memorandums
of il in q small book, with stu6s, prepared
for that purpose. These memorandas are
exchanged, and then the two rejoin the
crowd around the Bull Ring and shout
as loudly as anybody. Between the hours
of and P. ". an hour is taken for settle
mept. when the sales made during the day
are adjusted and the certificates trans
ferred. Then at the close of the last call at
4 o'clock the afternoon sales are settled.
When there is very little variation In the
price of oil the exchange is very tame
nIace, This is the time the bulls are
iaying their plans TO toss up the price, and
the "bears" are scheming TO pull 1t down.
But when the bulls" get the barrels fairly
in their horns and give them a toss up
ward, or the bears" get hold with their
claws and bring them tumbling down, then
is the "yar time" During the summer
months the advantage was all with the
bears" and they pulled oil down to the
unprecedented price of
Finy.one Cents per Barrei.
But then when the big spouters COM
4 II hogan
scarce. the battle turned in favor OF the
''bulls," and they have kept tossing and
goring until yesterday the price reached
81 81. When oil is active, stranger SUD,
denly turned into the Exchange would
think he had been placed in lunatic asy
lum, Around the "bull ring men are
crowded three and four deep, shouting al
the top of their voices the sales they want
10 make or what they will give for Oil, OF
perhaps the acceptance OF an oncr: All
this time arms are wildly geshculatine
above the struggling crowd. Added 10 this
is the click, click, click of numerous teic'
graph instruments, and the shricks OF the
messenger boys, calling out the names ol
persons for whom messages have arrived
As many as one hundred messages some
times
Arrive I'm single Minute,
SO the din from this source may be imag
| ined. All this combines 70 make scene
| of indescribable excitement and activity
| Without, In the lobby, stand the lambs;
| the dealers who are not members OF the ex
change. and who must stand outside and
| give their orders TO brokers' 1t is inter
esting to watch them; the expression Q
anxiety on the face Of the man who has hi
| whole fortune staked on the price OF oil
| the cool nonchalence OF some losers, tn
broken-up look of others, and the Joy OF I'M
| man who has made stake. While this !
| the manner of conducting business on tn
| exchange, there is a great deal OF dealing
| in a small scale on the outside by paree
| who conduct a regular option business
| but this Is very dangerous and general.
results in final loss TO the dealer.
Its surprising TO what extent that the
Mania for speeaiatiea In ou
has spread. 1t is confined to no class. Mar
ufscturers, merchants, lawyers, clerk.
men and women deal; yes, and from pei
sonal knowledge could name more tna
one preacher who has been there IN
amounts invested vary from sl5o 10 nun
dreds of thousands Fortunes are made an
lost every day In the late rise X n heI
| nedy, a business man Of this city and pr
prietor of the "seyen seal" patent med
cines, wound up at deal with clean prot