The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1902-07-16
Corn Shorts Secured Private
Settlement and Prices Fell
FARMERS ARE RESPONSIBLE
Held Their Product Back Until Prices
Went Up and Then Flooded the
Market With the Real Article.
Gates Clears About $1,5oo,ooo.

Chicago, July 15-The famous John W
Gates corner in July corn came to an
abrupt termination today when 1t became
known that shorts to the extent of a good
many million bushels had effected private
settlements with Harris, Gates & Co.,
and that the deal was at an end SO far
as the steel magnate was concerned. The
July price responded to the settlement
by a quick drop of 15% cents to 65A.
Later 1t recovered a fraction and closed
at 65h, substantially the price of the
cash article.
Just how many bushels were subject TO
private settlement probably will never be
known nor is there much chance that
the identity of the 'tbig fellows" in the
trade who doubtless contributed literally
to the fortunes of Mr.. Gates and the
friends associated with him in the deal
will ever be positively known. Mr.. Gates
is at present in New York and Mr.. Scot
ten. manager for the Harris-Gates Com
pany, would admit only the fact of
settlement by the outstanding shorts.
Even the fact of a termination of the
July deal was left largely to Inference.
But the trade readily figured that with
the shorts practically all In, nothing in
the shape of corner could exist.
No SPECIAL Excitement.
No special excitement attended the
premature puncturing of the bubble by
the man whose property it was. The
trade has all along admitted Mr.. Gates
was right and also his ability to do what
he pleased with corn and If he chose to
close the deal a couple of weeks prior
to the time at which 1t would be ended
by limitation, there was no one to say
him nay. The only unusual thing in the
pit at the time it became known that
the corner was ended was the purchase
of July corn in small quantities by the
commission houses.
Manager Scotch would not discuss the
settlement prices. This price, however,
was not matter of decided interest to
the trade generally. With the knowledge
that Monday nights closing price was
81 cents and the opening today from ~ TO
so, the consensus of opinion among the
outsiders was that Mr.. Gates had de-
manded either SO or 81 cents from the
people who were foolish enough to sell
him corn all the way from 60 cents up.
The length of the line of July settled
for by shorts is also a matter of more or
less conjecture. Mr.. Scotten said it was
several million bushels and that the
length of the line had never been over
estimated. 1t has been called as high as
25 900 900 bushels but more generally TO-
100000. It is a matter of common knowi-
edge that since 1t became possible to
make deliveries on July contracts the
Harris-Gates people have taken and paid
for about 100000 bushels. This would
fd Of
1000 bushels.
Gates Clears About $1,5o0,0o0.
To form an estimate of the apparent
profit by the deal would necessitate
knowledge of the average price at which
The property was bought This can never
be known unless some time later Mr..
Gates chooses to diyulge 1t. 1t is esu-
mated, however, by close observers OF the
transactions that Mr.. Gates profit Will
not exceed S1,500,000 This amount will be
divided up among ten or a dozen million
aires who were interested in the deal.
Mr.. Gates and his friends have between
40O0O00 and 5000,000 bushels of cash corn
which they must dispose OF before the
corner can be called absolutely settled.
This corn represents the "corpe" which
in every corner ever run has been the
stumbling block to success. If the aver
age price of the Harris-Gates holdings
should prove well up to the seventy cents
point the clique has on hand several mil
lion bushels of corn which cost its hold
ers in excess of the present market price.
Right here is the salient point. VIII 1T
be necessary to market this large holding
of corn at less than 1t cost?
Farmers Held Responsible.
The corner at one time promised many
millions of profit and the farmer whose
well filed cribs line the tracks of nearly
every railroad entering Chicago is held
responsible for the disappointing ending
of the corner. There were substantial re-
serves from the bumper crop of 1900 and
the large yield of 1901. This corn has been
held for a satisfactory market. The
farmer did not begin to take advantage
of the situation until the price of July
got up to the seventies and when it final
ly reached 80 cents the Chicago market
was deluged with cash corn. For a while
the Harris-Gates people kept the market
cleaned up, but steadily increasing guam
titles began coming and the prospect of
loading up with a lot of so cent corn
which they might not be able later to
dispose of at over so cents became some
what appalling. Without warning they
withdrew all support, settled with the
shorts and closed the deal.