The morning call. [volume] (San Francisco [Calif.]) 1878-1895, 1894-03-06
After Overselling Brokers Cam
not Fill.
MANIPULAToRs HAVE A CORNER
An Alarming Turn in the Big Wheat
Deal Demoralizes the Market
and Many Dealers.

pected nature that the Produce Exchange
is still in ferment Of anxiety. Cardboard
operators are alarmed at this latest de-
velopment of the manipulation; some are
jubilant and some are in distress. The
manipulators, who are evidently backed
by many millions of capitol, have taken a
bold position by forcing the shorts" into
buying back May wheat at their own fig
ures. This is serious enough for all con-
cerned, but where it will end is still
graver Ques ton.
The situation is complicated, so much so,
indeed, that bulls and bears have the arena
to themselves exclusively. Some time in
last September L. w. McGIauflin & Co..
began buying heavily. Their operations
were confined to futures-May, 1894. and
December, 1885, wheat. and were Kept up
in desult0ry way for months. In Janu-
airy and February they settled down to
business In a most unprecedented and eX-
traordinary manner, buying all future OPP
tons directly or through friendly brokers.
AS result the market became demoraliZed.
Brokers sold May wheat regardless OF
whether they bad it or not until by close
calculations the operators found that
nearly $4,000 tons were short" In other
words they had sold that quantity over
and above the actual stock in warehouses.
w UPu Sell6E Is III lUl5 pOoltlUu lie 10
known as a "short." There are many of
them in the Produce Exchange at present.
As soon as they realized their position sell
ing dropped off considerably and so the
deal renamed lifeless for awhile.
Within the past week, however, accounts
from England were encouraging. and the
prospects for favorable market for May
wheat were good. The shorts got panic
stricken and prepared to buy In wheat to
fill their contracts for May. About the
first &C ton taken was to call meeting of
the Call Board Association yesterday and
adopt resolutions, and the following nOtice
was posted in the exchange afterwaTd:
AT "a meeting of the Board of Directors of the
San Francisco Produce Exchange Gail Board
Association held March 5, 1894, it was ordered
that all additional margins on seller, May
wheat. over 81 10 per GENITAL. be deposited with
the san Francisco Produce EXchang.
T. c. FRIFDLANDER. Secretary.
San Francisco, March 8, 1894.
Naturally enough, this measure incensed
the sellers who had bought immense guam
titles, because. instead of taking margins,
they will have TO pay the money or profits
on deals into the Produce Exchange Bank
TO be left there until released by the eX-
change. 1t was conteDded that heretofore
margins were used against the shorts" TO
continue further operations. and this will
put stop to employing another's money
in buying future options.
Last Saturday the market closed at
81 08h for May wheat. The deal manipu-
lators had bought in for months at prices
ranging from 81 OF to 81 1914 per centai
Yesterday the opening quotation at 10
A. NJ. was 81 90, closing 81 10M. At IL
A. NJ opening 81 10A; closing 81 1874
At 2 P. n. opening 81 10; closing 81 1874
At the afternoon session May wheat was
as high as 81 1914. McGlaufiin bought 1900
tons of spot wheat at P. NJ. at 81 O6 TO
81 06H. This was a cash transaction, so
he had to pay out about $4,000
The actual value of wheat on the
Produce Exchange tables was 90 cents. In
Chicago May wheat is 1914 eents-not a
cent a pound. The high price here is
purely local and due to the panic.
1t was understood on Change that
George W. McNear was the principal
short, which he denies emphatcally.
a call-board member who is not inter
esled in the present deal said:
"Oh, yes, there is g0ou deal to be said
on this 'einch' in May wheat. You will
understand that about year ago the call
board. having. gotten over the scare they
received in the Dresbach affair. deliber-
ately abolished the settling committee.
which was a safe guarantee against such
unduly inflated prices as May wheat is
being manipulated to-day. So there is
that difference between the Dresbach deal
and this. Then those who were being
squeezed could plead the baby act as
they did. To-day having deliberately put
their only safeguard aside they must lake
their medicine or die"
but those who have the spot wheat up
against their May short cannot be
'cinehedw was suggested to the mer-
chant.
They can't, Ell? What's to prevent the
bulls from putting May wheat up to 9
cents per pound, or even cents for th at
matter To be moderate. however, let US
say that they put 1t up to ~ cents per
pound. That will call for $1,000 more
margin on each contract for The man VINO
has sold his May wheat short and is hold
ing the spot wheat against it,
But" said the reporter, that money
goes into the Produce Exchange Bank
after the price gets TO 81 TO, according to a
resolution passed by the board of d.
rectOrs to-day"
Eyes. but suppose the poor broker hasn'i
got the $780, that is very little satisfaction
to him. Many operators have ten con-
tracts short aud some great many more.
10 that way even the well-of operators
may be made to succumb.''
''Where will the profit of the buyer ap.
pearl"
Don't you see9 those who are putting
up the job have been buying Dec ber
'93, wheat and May wheat since about las
September. They had a whole lot oil
December, '93, wheat dumped at then
when December came, so that they mus
have great zeal Oh SpOl WHEAT on Da00
besides carrying the May contracts. Al
this stuff costs them much more money
than present prices, and so as to get even
they are trying to make the May short,
settle by soaring them into paying them
the advanced price"
SLOW can the shorts be scared?"
''By their thinking the bulls may put ur
the price until they (the shortsl could no
meet the margins they would have to pu
up"
"Who are the principal bulls?" wa
asked.
"McGlaufiin is the broker, but the powe
behind the throne is reported TO be Bal
four, Guthrie 81 Co.. and they have takel
all the Cruel that the boys have piled OF
them, never asking any favors, but show
ing many"
"They are not buying the spot wheat
are they?''
Aren't, Ell? Well, they bought 100
tons on this afternoons session and BIZ
81 06 for 5000 tons more. L tell you the,
are bloodsd."
''Dc you, as business man, think |
right that they should place whole Grove
of business houses in JEOPARDY"
did the houses now in jeopardy hav,
any pity on the bulls when they Jumped
nm Nav wheat until il was down IN beI n q