The age-herald. [volume] (Birmingham, Ala.) 1897-1902, 1898-06-03
THE CLOSING OF
LETTERS WHEAT DEAL

NNoi --AAe'o SUI pdooCo any thlH6 t1S HOla0
has ever witnessed. 1t has been far-reach-
ing, almost beyond conception in its magni-
tude, financial resources, and profit. when
all the May is closed up" said Joseph
Letter the other day. 81 shall have handled
approximately 100000 bushels. I have
merchandised 25. 900 bushels since Sep
TENDER 1'''
The profits to date are estimated at from
100000 to s7,OOO,OOO His banker,
who has intimate knowledge of his opera
tions. makes the outside figure. There are
still in the vicinity of 10000 900 bushels of
wheat to be disposed of. But even at a
loss of so cents bushel on this, which is
not at all probable. the result would leave
him over 81. 000, 900 ahead.
Letters entrance into wheat speculation
commenced April q 1897. when he gave an
order through George B. French to buy
100000 bushels for May delivery at 755s
cents The lowest purchase was at 64A
on June Is. 1897 His first deal was with a
view of helping French out. From small
beginning. line of 100000 bushels was
accumulated for May and sold out at a
profit. July was bought at a discount of
z to Is cents. The market was going very
slowly those days, and when prices adj
vanced. the whole line of about 100000
bushels was sold out at profit of over
100000. For a day or two in July last
year they considered the price high enough.
1t was then up to Is cents. The sudden de-
velopment of a foreign demand. however,
induced French, who was managing the
deal, to take the buying side again. Wheat
for September delivery was purchased, and
on August II the price advanced amid the
widest excitement to 81. This marked an
era of bull speculation that has been preva-
lent ever since. As fast as one line was
sold out. it was replaced with contracts
for other months at lower figures. The
speculative world had been accustomed for
years to ordinary advances, bear markets,
and heavy carrying charges. 1t took many
months to re-educate the trade, and many
operators have not yet been able to get
well around to the idea of trading in
market where the bulls get the carrying
charges. Ever since Letter has been in the
market he has collected instead of paying
charges, the cash wheat being at a pre-
MUM, which gave him the advantage.
I At first Letter was looked upon as no.
vice with a long bank account, and was
not expected to last a great while. 1t
was the popular idea, in the trade, that
when he ran against the cash wheat his
troubles had only commenced In Sep
TENDER he took in 100000 bushels of cash
wheat, shipped it to Liverpool, and sold it
out at a handsome profit, and then changed
766O000 bushels to December contracts,
getting the latter at large discount. In
December, Letter expected to get only
5000, 900 bushels on his contracts, but as the
price advanced to $1.09 in the early part of
the month 1t gave Armour. Weare. and
Peavey, and other heavy elevator operators
in the northwest an opportunity which
they had not had in seven years, to sell
wheat above 81. The result was that Letter
had to take 100000 bushels. The average
price for December was 81 cents.
Then he turned his attention to con-
tracts for May delivery, and, according to
his own statement, swelled his operations
to 40,000000 bushels In March and April
his cash holdings in Chicago, Duluth, Min
neapolis, New York, and at Liverpool ag-
gregated Is, 000,600 bushels. There were
times in March when attempts were made
to break the price for May delivery, and
he was compelled to buy 100000 bushels
in three days at $1.0115 to $107 That was
the only time during his entire operation
that his interests were at all imperilled
In one single half hour he put up 100000
in margins, and within a week deposited
50, 5000, 0OO mostly in City Railway and Bur-
lington stock with two banks to secure
loans mo man in the west has the liquid
assets that the Letters possess" said a
banker at that time; "they have over $685.
600, 000." Letters idea in arranging for
for financial assistance was on the same
1,1op Of no Indiana WI in ha
early days went to buy land His wife told
him to "get plenty while he was getting
it." He secured double the amount he
expected to use. so that should occasion
require he would not have to get out and
hustle in the last hour. The failure to
follow out this policy has been one of the
real causes of many failures in the past.
The showing of financial strength, backed
by nerve and disregard for quantities,
which is one of Letters peculiarities, has
been one secret of his success. He has
not made conditions, but has taken advan-
tage of Them assuming risks that an ex-
perienced trader would not and which
many considered at times would result
in serious losses. He has bought wheat
when others thought that he should be
selling, supporting the market at critical
periods and selling when buyers clamored
for it.
In ALL Letter has shipped 20 OOO 900 bush
els of wheat from Chicago since last Sep
TENDER, 100000 bushels being shipped
since January /. In January he let con-
tract to the Lehigh Valley for 100000
bushels, and inside of a month his con-
tracts with other lines were for equal
quantity He has handled the greater part
of his vast business himself, having an
| unusual appetite for details. year ago
he knew nothing about the business. Now
he could give many of the oldest hands a
few pointers. His largest single trans
action was the sale of 100000 bushels to a
French house. and at another time he sold
10000 bushels. He has been the only
man in the wheat trade who has ever Sc
cured 81 bushel profit. A commission
man in telling his experience recently said:
| 81 bought 100000 bushels of wheat for
| Letter and rendered him an account of
| s250,000 profit" Letter, himself, in speak
| ing of his profits recently, said that he
| had made So cents in one instance, and that
| all of his profits had been on the cash
property. His speculative deals would
have brought in comparatively small returns
| compared with the risk.
1t was the shortage in the foreign crops,
| and the pond cropc hare ur1,iob va