The Houston daily post. [volume] (Houston, Tex.) 1886-1903, 1898-06-14
The BIG SLUMP in WHEAT
Was Caused BY Heavy Llquidstioas
BY Letter.
WAS TRYING 10 CARRY TOO Much
Young Man Admits Tint He SOLD out
His Entire Holdings, six or
Fight Million Bushels.

/
Chicago wheat pit. reverse that looks
like Waterloo has come to the young
Napoleon OF finance" Joseph Letter At
first there was wild tumble OF prices on
the board, July wheat selling II cents from
saturdays close, while September lost
4 b-Sc and December use. but all made
a little recovery before tho close. Ii waa
given out that Letter had ordered his deals
all closed and that the selling rush was
the result OF the execution of this order,
accompanied as 1t was by A food OF rumors
concerning the stability OF the big bull
movement which for months has been the
| important factor OH the board OF trade
dealings.
One Of these rumors was that Letter HAD
been deserted by some OF his associates
In the campaign In the meantime Letters
wheat was being tumbled overheard ami
prices had become demoraiized. Later in
the day Letter made no attempt 10 conceal
the tact that he sold out all has holuings IA
lfutuies--probably 8,0U0,U0O or sou, 100
bushels. IL came out that he hal trans
iefred most of his trades in futures to
other well known houses and that they
were pretty well protected by margins SO
upon Letter.
His cash wheat one report said was
transferred to Armour, but q later story
was that II would be trusted" and
handled in such way as to prevent the
slump which would be inevitable II 1t were
all thrown on the market at once. Before
the final close, the panic partially sub
sided and July reacted cents. September
selling up y cents aud December making
a 2-cent rally, selling shade above Sop
TENDER. where II was l cent under Satur-
day.
None OF the principals IN the Letter
crisis is willing to discuss the causes which
led 10 his abdieaton and tho most plaus-
| ible explanation that can be offered at this
time Is therefore circumstantial and spec
| ulative.
| The first indication Of approaching dis
| solution In tho Letter regime came this
| morning when the announcement was
made that all his cash and June wheat
| had been transferred by Allen Grier and
Cellar, Letters brokers. to Philip d. Ar
mour aud that the September option OF
| which Letter was heavy holder. had been
| transferred to Lamson Bros. These re-
ported transactions gave rise to coniec-
lures that soon developed into panic.
| At the outset 1t was rumored that Letter
| was trying to get out OF the market but
the fact that Allen Grier and Cellar had
| transferred their trades to Lamson Bros
instead of selling out directly aroused NE
suspicion that Letter was hard pressed and
| was endeavoring to dispose OF his immense
holdings without disclosing the causes Of
| his selling.
After closing OF business Saturday mil
lions Of bushels OF September wheat puts
were sold in the vicinity OF 13tac. I.anson
Bros. apparently having large orders for
this line. Shortly before the opening OF
the board OF trade this morning brokers
| supposed to be acting for Letter were
ready sellers. The put price was speedily
| reached and Leiter-if the Eamsons were
acting for hin,--was unable ID, dispose OF
millions Of wheat on the sale of puts
| whereas If the actual wheat had been sold
in the market there would have been even
| more severe break Had Allen Grier
| and Cellar made the selling the street
would have suspected a ruse, but coming
| from Lanson Bros. there was no special
| indication as TO the identity OF the sell
| ers.
II is estimated that during the day from
| eight to ten millions OF Letter wheat op-
| tional and visible. were sold to the account
| OF the Young Napoleon" This Is sup
| posed to have consisted chiefly OF options
IN September. July and June wheat. stored
in Minneapolis, st, Paul Duluth and Chi
| cago 1t was said on the floor that the
| bankers o. the Northwest who have been
| carrying the Northwest bull clique re-
| fused to carry their burden for longer
| time and the calls had been made by
| Northwestern dealers. particularly tho
| Minneapolis interests, for margins down
! to 90 cents. These, 1t Is said were fol-
/ lowed by calls upon Letter here to margin
| his wheat holdings down TO 80 cents. Mr..
| Letter had about 900 900 bushels OF cash
wheat on hand. much Of which he IL said
to have disposed OF at loss.
Later 1t was reported that l.. Y. Letter.
when asked by his son for more money
had refused to be drawn further into the
wheat deal and thus compelled the latter
to let 20 a large line OF his holdings In
order TO satisfy his warehouse creditors
and marginal demands. Representatives
Of the Northwestern interests appear 10
have precipitatcd the crisis by coming to
Chicago Saturday and learning that l.. u
Letter would not advance any more money
on his sons account.
Mr.. Letters friends insist that he has
not made an assignment, hut 1t was ad
United tonight that the Letter interests
had been "trustced." Joseph Letter could
not be located tonight L. Y. Letter was
seen but positively declined to say a word.
Joseph Letter entered the market April
2. 1897. ard Immediately afterwards the
pressure OF tremendous power was felt.
but no man knew whose WAC the hand.
Letters first order was negotiated by Brok-
err George p. French. II was for 100000
bushels of May wheat at 20 7-s cents per
bushel Then his orders came thick and
fast. The cheapest wheat bought by Letter
was $780, coo bushels bought for September
delivery al 6iN cents.
The deal ran fourteen months. during
which time the price OF wheat was down
| 20 ei% cents In June. 1897 and IN TO
st.s5 In May 1895 It involved at one
time an interest OF more than 35.o0o0oo
| bushels OF wheat
Minneapolis. MINI. June 1s.-The big
break In whra. today caused much excite
mtnt on change and among the grain men.
| Letters failure to carry the lead which he
attempted 70 handle came as a surprise
G. A. Plllsbury. the flour king, asked In
regard to his opinion as to the break, It's
causfs and results. said:
''Ihe cause OF the break In wheat today
| was that Mr.. Letter attempted to carry
too heavy load and put the price of
wheat too high. II he had never attempted
| to put the price above 40 he would have