St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1884-10-01
WHAT Is A CORNER?
Especial Telegram to the Globe. |


CHICAGO, Sept. 3O.-Corners in grain markets
are only possible when there is an excess of
short sales. and if one understands the theory
and practice of short sales he can readily under
stand the working of a corner. In regular
business when a man sells grain he ac-
tually has the grain 10 deliver, but in
speculation a man sells what he has
not and seeks to deliver the goods at a cheaper
figure. but every bushel thus sold must be bought
back at some fgnre, higher or lower, before the
transaction is or be closed, and right here IL
where the pinehing comes in. In regular bus
mess when a man sells anything that is an end
OF the transaction, butevery speculative sale in
wolves another buying transaction Of equal size
and amount, and this is called
..selling Short because in such
deals q man agrees to deliver what be does not
yet own, and hence he is short or minus that
amoaui of actual stuff, and he is compelled to
buy it at any price. tie can buy it next DAY or he
can defer il a month or longer If he chooses.
The man who sold September corn short in
August must buy back all that he sold before the
close Of September. or pay the price difference in
money During last August or before en- i'm
lneuse amount Of corn sold short il this market
for September delivery. The price OF corn at
thai time was thought 10 be higher than 1t would
be when September came round. Wheat was
low and the promise Of the new corn crop was so
good that traders concluded there would be a
drop OF at least lOc 3 bushel and 50
they all rushed in TO secure a
part OF the prospective profits, and il the mar
ket had been let alone they would haye come out
All rfxnt, but after millions OF bushels had been
I thus sold for future delivery some parties put
/ their heads together and bought up all the cash
I corn in the elevators and went into tue market
Z sad bid up the price, taxing all that offered
T and still bidding higher for more.
VERY soon the shorts saw the markets going
/ against them and began TO buy back az q loss
! what they had previously sold This OF course
greatly increased The number OF buyers and sent
K the market up faster. After the Doom was
I fairly underws 40 one dared 70 sell short ans
I more. and the only corn obtainable after
I that point was reached IN the
hands OF the parties VINO were running the deal
Z Hence they were at liberty 10 put what price
/ upon it they pleased PROVIDED they bought from
Z Csy 10 day ali the actual corn that cane in over
the railroads and AL the speculative offered
I The entire corn supply, therefore, was actually
locked up By the parties running the corner
+ Those sellers who filed in or bought back what
they sold before the price got too high, escaped
I from the trap set for them with but little loss,
but many others got mad and vowed they would
not buy anfIl they got ready. The parties running
the deal could lot force the delinquent fellows
. 20 ouy Until the last day Of SEPTEMBER, bur theJ
oouId force them to PIT up margin none,
enough 70 make them cover al the difference IA
price Between the Iow point and the high. Hence
4 a corner always settles itself after while into
tussIe between the victorious longs and the MAJ
shorts. and in this contest the price can be pG
I'D 70 any figure the FIRST party decides upon. The
situation and deal entirely 81 their mercy anC
the shorts eventually settle 81 the price fxec
fo- them By their antagonists, or appeal To ths
board OF directors TO come 20 their rescue and a
marginal price. which appeal In this case va.
successful. though il i lot always -. Such il