Morning journal and courier., 1884-01-30


 900 to $35. GOO. The will bequeaths to the American Missionary association S1O, 900; to
 Oberlin college, railroad and bank stocks of
 the par value of $5.7OO; to Berea college,
 Kentucky, $2.OOo; to the Hampton Normal
 and Agricultural school Virginia. $2. 600; to
 Fisk university, Nashville, Tenn, $2,O00;
 and to the American Congregational union, | $1, ,OOO and stocks of the par value of $1 ,500.
 The American Missionary association is also
 made residuary legatee. MT. John Hooker,
 of Hartford, is executor. Futures and Corners.
 | An Interesting Lecture by MT. Has1ley-
 Stock And Crop SpecuIatfon-Bulls knd l BearS-Marginal BuyfRg-GambIinG vs.
 Beneficial Speculation.
 The presidents lecture room at the college
 was completely packed Monday evening by
 those who came to hear Mir. Hadley speak on
 ''Futures and Corners" Some larger room
 should be procured for these lectures as
 more than half the audience were obliged
 to stand. When the lecturer appeared he
 was greeted with loud applause which lasted
 several minutes. He began by describing
 some of the more prominent speculative
 transactions, stating that in certain cases
 two hundred times as much grain has been
 sold as delivered. Nine tenths of the sales
 in New York are purely speculative Men
 have stock Con paper) that they do not want 1 and sell that which they do not own, in
 order to make money without work. The proper name for these transactions is gam
 bling, and they differ from playing poker and betting horse races only because | they are considered respectable. The gen.
 
 waiting for rise. In good years
 there is always 8 tendency for stocks to
 go up and the holders of them thus profit.
 But there certain things which will not rise, and 1t is in these that the spectators do
 most of their business. They make study of crops and the market and they know bet
 ter than the public the chances of 8 rise or fall. If they anticipate the latter they deal ia ''futures.' For instance man knowing that wheat is now at $1.25 agrees to deliver 3 months hence 10000 bushels at $1.25; should it fall to $1 20 he will buy at that fig ure at the expiration of the appointed time and pocket the difference. On the other
 hand, should wheat rise to $1 30 he will lose. Sellers in ''futures'' are usually called ''bears,'' those who gain .by a rise in price t'bulIs." Another form of speculation is gambling on 'tmargins" Suppose 8 man ex- poets rise in New York Central stock. To buy up enough stock to make large profit would require large capital; 100 shares at 100 would require $1O,000. But this amount | of money he cannot show. So he goes to 8 | broker and orders him to buy up New | York Central. In order to insure the | broker against loss he deposits with him 1 | margin" usually ten per cent of the amount l of the transaction. The broker buys the | stock Should there then be rise the pur- | chaser would make 8 clear profit without | having risked his capital. But should 1t fall 1 ! ten per cent. he loses his margin Now | some lines of dealing in futures are necessary | l and beneficial. If you go to 8 joiner with | specifications for house and ask him to | contract for it six months hence he will give | you an estimate for it. Suppose he has no | lumber on hand, but must buy it at the time | of building. By agreeing upon 8 | price now he is really dealing in
 futures. But by his knowledge of the fluctuations of the lumber market he is in much better position to judge of the probable rise or fall in price than the general public. He can thus by gauging the prices to the probable cost moderate the fuctua- tions. The speculators make it their busi. ness to study the market and SC prevent vio- lent changes. h old times often mills were running full time and men risking in them great capital, when the market failing from ruined crops, the trade was brought to 8 standstill owing to lack of material Great distress always ensued. This is now impossible. The brokers watch the crops and if they prove small, supply themselves with the product from other lands, thus having enough to supply the market. They are in such cases of real service to the public The latter, however, usually mis takenly revile them, not perceiving that with out this speculation manufacturing would be ,E, ! tion was furnished during the war. In 1864 gold was quoted at 190, and the people cried out that it was owing to the wicked specuIa tors. Forced by public opinion Congress passed bill forbidding speculation in gold. A great demand for it followed. Men found that they must each secure and keep their own supply, and the price in two weeks rose to 290, Congress hastily repealed the act and the quotation fell to 24O immediately. In gen. eral it may be said that those spectators who try to forestall the market benefit the public and that those who try to manipulate 1t 1n- jure them. Very few, however, are willing l to confne themselves to the former line of l operation. If man wishes to buy the stock of a certain railroad and hears of an accident on it it is human nature for him to exagger- ate the report and force down the stock as much as possible. Most prscticed operators speculate for fall, but not ali Others spec uIate in corners. A good instance of this was Commodore Vanderbilt's corner in Harlem A large number of speculators, anticipating fall in the stock of that road owing to legis- lation, offered the stock in ''futures" l. @. agreed to deliver in six months. The price was then about 20, and they offered it freely ex- pecting to buy at that time all they wanted for song Vanderbilt quietly bought 1t all at the price required, until he had their promises for several times as much stock as was in ex- istence beside all the real shares. When they endeRvored to find the stock with which to meet their engagements they were obliged to pay 200 for it and sell it for 20. A great diff fculty in the way of successful corner is the immense amount of capital needed. One man can seldom command it, and if he goes into 8 {" blind pool" with other men they may desert him at the critical moment. Let us suppose 8 man wishes to make corner in Erie. He owns only $5 0O0, ,000 of Erie stock and must bor- row. He takes this stock to bank and on 1t as collateral security raises say $4 ,0OO, GOO with which he buys more stock and soon un- til he has gained control of all the stock of the road He now buys Erie stock on futures, 1 and when the sellers try to meet their engage ments, he places the price where he pleases , and forces them to buy at his figures. A great difficulty here presents itself. Should the bears succeed in forcing down the stock below it's original price, the banks of which the spectulator has borrowed will be forced to protect themselves by selling and the corner will be broken. Again the manipulator may not be able to hold the stock long enough to force the ''short" men up to his prices. In that case the corner will be broken and the speculator will suffer heavy loss, as the price will immediately sink Should he, however, be able to hold it long enough until obligations fell due he could command his own price. The lecturer de- scribed several recent corners in the produce market which he said were becoming more l frequent and successful They may affect the public by making scarcity of necessaries such as wheat in the market, | but stock corners harm no one but the de- feated speculators Attempt have been made . to deal with this form of gambling by legis- latlon, but without success. It is 8 difficult | thing to distinguish between legitimate speculation and gambling and the courts have been thus far unwilling to deal with the question. Again a sDeculator is liable to be IF expelled from the produce exchange for breach of faith, thus losing his business and running himself. The only remedy in the { opinion of the lecturer is for a strong pub 1 lie sentiment to be aroused in the matter Legitimate speculation should be upheld, but ! illegitimate dealings in futures should be atiOnafiza6 . I \