The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1902-10-17
THE TRUTH ABOUT MONEY.


Notwithstanding the Market.
New York Press.
Has no one the courage to tell the truth
about the alleged scarcity of money? One
or the vile conspiracies of the age is active
ly on foot few weeks ago the bankers
were telling ii broadcast to all the world
that the money situation was satisfactory,
there would be no squeeze, all demands
would be met at normal rates, and so forth.
How would you like to be the iceman?"
is played out The question is, How
would you like TO be Howard Frothing-
ham?" One day last week he lent on the
floor of the Exchange s13.O0o,O00 at an aver
age of 121s per cent. This money belongs
to the associated banks. 1t is an illustra-
ton.
One with investment securities to sell
visited a millionaire in Philadelphia last
Wednesday. Your bonds are all that l
could wish them to be- said the man of
wealth, but l really do not want them
now. They pay Is per cent, at the price
you offered them, and that is very tempt
ing, but let me tell you what l am now do
Ing with my spare cash. 1 am lending 1t
on call in Wall street and making at least
10 per cent. year. or at that rate. Come
round when money is earning per cent.
and Ill buy your bonds
Inc chief cause of distress in the street
Just now Is the speculative craze among
legitimate commission houses. Instead Of
buying and selling for customers on a mar
gin they have made large commitments
on their own behalf. Successful houses
never do this Old-timers point to quar-
ter of century in which there was not a
single house joining speculation with a
commission business that did not go under.
FIRMS FIRMS to-day that look for nothing but
their legitimate Fights and quarters are
not calling on customers for additional
margins, and they are able to borrow all
the money their business demands.
A combination of men controlling $780,
OO,OOO or 500, COO, O00-and such combina-
ton exists-can lock UP nearly all the
money in the street and put rates where
they please. A well-known financier goes
to a bank and inquiries: How much money
have you got?" 1.-Two millions" is the
reply. Il want to borrow S. .OO0." Eight
millions is borrowed of a bank that has but
$2,0OO0OO to lend. The interest is paid on
this sum for one, ten or thirty days A
certified check is taken by the borrower
and and locked ed up IN his safe deposit vault.
The bank can make no other loans, as the
certified check may turn up at any mo-
ment. y dozen other men are doing the
same thing with dozen other banks, and
The money is not taken from the banks
1t is understood that ii shall not be. The
bank with 100000 receives the interest on
$S,OOO.OOO and keeps the money in its own
vaults. for 1T has parted with nothing but
certified check. Spectators, unable to
borrow except at ruinous rates, have to
throw their stocks on the market, prices
tumble, and the pool buys at its own
prices.
1t would not be difficult to put your finger
on the old-fashioned Stock Exchange firm
that started business forty-odd years age
with these rules: Never to carry stock
without margin. never to speculate ir
stocks, and to do honestly legitimate
gave an order for the purchase of a large
block of railroad stock do you want us
to carry it?' asked the head of the house
If SO we shall have to ask you to put W
said the millionaire, in great surprise
why, l am worth a hundred times tina
amount" 1--WE do not doubt that" re-
same for rich and poor We would no
carry stock for Commodore Vanderbilt
without margin" The capitalist wen
away angry, but came back next day, de
posted $4,000 with the firm, and said
Thinking matters over. 1 am going to Dc
business with you and give you my inf1u
bound to succeed. My money is safe witt
you. Stick to your rule and count on mt
| as a friend
Those who make money in Wall stree
are: First-The men who control the mar
ket, such as Morgan, Rockefeller, Stillman
| Keene, Havemeyer and Rogers. Second
| Those who leg1t1mately buy and sell OIL
commission. Third-Those who buy in
panic. Fourth-Those who buy outright
take the stock home and lock it up. Fiftl
Those who average their stocks. Sixth
| Those who are content with small profits
| Those who lose in the street First
! All who are caught by panic Sec
ond-Green operators who take flyers in tn
hope of getting rich quickly. Third-Piker
who have friends in the street to inves
their money on a / or per cent. margin
| and infatuated women who annoy ant
worry brokers by frequent visitations
Fourth-Industrious, emotional Spectator
| who run 100 miles a day in search of in
formation and buy or sell on every lin
side" tip coming their way from friend o
stranger. Fifth-All who buy or sell o.
| rumors to make a point either way. Sfxt
The joint-account geniuses who, havin
accepted a canard as fact, whisper 1t t
a broker and induce him to go in wit
them and divide the profits.
Whenever an industrious Spectator tell
! you he has tip from successful operate
| give him to understand that you know h
lies Men who have genius enough to af
feet the market have shrewdness enoug
| to keep the rise or fall to themselves. TIL
Wall-street tip leaks out after the fac
not before 1t.