Democratic Northwest. [volume] (Napoleon, Ohio) 1869-1894, 1892-02-25
CHILD'S PLAY.
Grain Market Manipulations by
Multi-MilliOnaireS.
The ArmourS, John D. Rockefeller
and Colonel North
Said to Be Back of the Colossal
Corner in Wheat.


Discovered the Cause of the Irregular
Disturbances in the Wheat Markets
Within the Past Few Years-Secret
Manipulations on n Gigantic Scale.
How Their Knowledge Was Obtained
and How They Propose to Use 1t.
New YORK, Feb. 20.-At irregular in
tervals during the last two or three
years the wheat markets have been dis
turbed by secret manipulation on gi-
gantic scale. In each instance the
manipulation stopped as quietly and
mysteriously as it began, and in each
instance a great sum was taken from
the speculative capital engaged in the
grain trade. At least $l0,000,000 in
money has been taken out of the Chi
cago and New York wheat markets
since 1888 and passed to the credit of
this manipulative combination or person.
Again at Work.
The pool, according to The Times, is
again in the market. The finger of suspi-
cion has been pointedly directed toward
P. D. Armour, of Chicago, and his
brother, H. o. Armour, of New York,
as the principals. 1t was story with
out foundation. But it does not follow
that P. D. ard H. o. Armour would not
run deal for somebody else if there
was an assurance of 81 100000 in COM
missions in it, with unlimited capital
back of the enterprise.
Others in the Deal.
Jim Keene was also mentioned as one
of the men in the deal, and it is not
certain that John Mackay is not one of
the partners in the clique. Through the
friendly Offices of mutual friend, John
d. Rockefeller, the director of the
Standard Oil millions, together with
Colonel James T. North, the $50, 900, 900
nitrate king, and the brightest of the
"big bonanza" millionaires who several
years ago sought to see how their sur
plus and otherwise idle funds might be
employed to advantage, the manipula-
ton of the grain markets Of New York
and Chicago would be to them tie
merest chilc's play.
A great wheat pool was formed, and
has been doing business for the last four
or five months. Up to the turn of the
new year the combine played. for de-
cline, but since then it seems to have
been shaping its course in 'the1other di-
rection.
They sent corps of agents to the
Russian famine districts and another set
of men to take observations in otbar
fields. The reports that were forwarded
represented the facts to be worse than
the most sensational word painter had
depicted. Over 40,000,000 people were
in need of assistance more or'iess urgent
and % per cent. of that number would
certainly starve unless helped.
Commercial Significance.
The commercial significance of the
disclosures became clear. A study of the
needs of the importing countries for the
next six months satisfied the manipulat-
ors that every bushel America could
spare from her phenomenal surplus
would be wanted and that unless an
other monstrous crop should follow that
of 1892 the chances, based ON natural
causes, favored a high range of prices
for the months ahead. 1t was upon such
theories and conclusions that the pro-
gram was changed about the middle of
last December and a bull campaign de-
termined upon.
There are at the present time twenty
or more houses on the Chicago board of
trade that are carrying heavy lines of
wheat which do not usually cut much
of a figure in the grain trade. These
houses for weeks have been absorbing
the offerings of this market. In no case
were the brokers acting for these houses
permitted to bid for property-that is,
bid the market up in order to get at
wheat. The object has been clearly to
accumulate as large line as possible
without attracting notice.
Numberless little concerns are long
from 100000 to 100000 bushels, each
of whose books usually show open
trades in Sc, 900 to 100000 bushels. On
the breaks they have been called vicious
ly for margins, always responding cheer
fully, especially rarely "calling back"
the procedure commonly adopted when
1t is desired to protest against demands
deemed unnecessarily severe.
The larger houses have also been fa-
vored to a moderate extent with the
clique buying orders, but not enough to
attract attention. 1t is given out in ex-
planation that when anyone asks "who
is buying this wheatT that the foreign
ers represented the long interest and
that they were certain to be shaken
out"
This general belief has helped to keep
the market weak and made it easier to
accumulate contracts on the buying side.
Sentiment was all one way, and it was
common expectation to see wheat go
down to seventy-five or eighty cents.
Why it did not so break was mystery.
The wheat that stands sold upon the
books of the commission houses on the
Chicago board of trade at present aggre-
gate 70,000,000 or 80,000,000 bushels.
Now, what does an open interest OF TO-
600 900, or so, 900, 600 bushels represent?
Suppose that 30,000,000 bushels repre-
sent wheat in western warehouses ''sold
against" in Chicago as hedge to protect
holders of cash property against declines
in the market? 1t is claimed on pretty
good authority that there are less than
40, ZOO, 900 bushels in public and private
warehouses in the west.
The actual open speculative short in
terest in the Chicago market is approx
mately 50,000,0 900 bushels, which amount
must be bought in upon the open
market because it can not be delivered
in substance. In addition to the 0,000,-
900 bushels purely speculative short in
terest in Chicago, there are similar open
interests for possibly an equal amount
in the combined markets Of st. Louis,
Toledo, New York and Liverpool.
The big pool has the wheat contracts.
Its agents have been buying all the
wheat that the bears have dared to sell,
for future delivery in all the great pub
lie markets of the world. It has more
millions in money back of it than any
sna1llative combination of modern