The sun., 1903-05-23
The Ways Of Wall street

The idea il cultivated here and there
that customers Of the Wall Street Stock
Exchange are regarded th.r az lambs
to be sheared or even slaughtered. and
that in any controversy with their bro
kers they are practically helpless. 10
those who in any degree entertain false
notions of this character we commend
knowledge Of little transaction down
town lately terminated.
On the eve of May Q, 1901. the day OF
the famous Northern Pacific corner,
gentleman in Chicago named WHITE was
short in the Office of MILMINE, Bod
MAN l. Co., a very large and well-known
Chicago commission house, of 200 shares
of Northern Pacific stock. That is to say,
Mr. WHITE had sold 200 of the Northern
Pacific common shares and had borrowed
the stock for delivery with the idea OF
repurchasing it at a lower level. If he
could not complete the operation in this
way he would lose money, and his loss
would be proporti0ned TO the advance in
price of Northern Pacific common above
the price at which he had originally sold
it. Before the opening of business on the
cvclonic day referred to Mr. WHITE di-
rected MII.MINE. BODMAN 4 Co. to buy
in or cover his POO shares of short
Northern Pacific for cash. or, if not for
cash to buy it in at the market Pur-
chases for cash on the Stock Exchange
mean that the instantaneous delivery of
the thing purchased is required instead
Of Inl, ha la
cording to tho usual custom. Shortly
after the opening OF the Stock Exchange
Northern Pacific sold at ?26, and then in
the course of an hour advanced to LOCO.
1t was admitted that the New York agent
of MILMINE. BoDMAN 4 Co. could have
purchased the POO shares of Northern
Pacific at 22G, but he was loath to do so
when considering the enormous loss
entailed thereby upon his firms GUS
toner. Finally. however as the price
kept jumping, the New York house that
was acting for MILMlNE, BoDMAN 4 Co.
filled the order by the purchase OF 100
shares at 900 and 100 shares at 600
Mr.. WHITE in Chicago declined to ac-
cept the sale. He maintained that Mill
MINE, BoDMAN 4 Co. or their agent
should have purchased the stock at 226.
The commission merchants. on the other
hand, maintained that in delaying the
execution of the order they were only
striving to further their customers best
interests The customer on his part
finally declared that he was willing TO
submit the whole matter to the arbitra
ton of the Board Of Governors Of the
New York stock Exchange, and this
was agreed to.
The Board of Governors has been
spending many days in hearing testi-
mony, and the decision "a finally rem
dered the other day was that MILMINE
BODMAN Il Co. should only require their
customer, Mr. WHITE, to pay for the
Northern Pacific stock at the rate of s226
a share. MILMINR, BODMAN & Co. and
their New York agent were thus called
upon to sustain loss of nearly $500
The things to be emphasized in this
very important and interesting case are
these: First, the absolute good faith Of
all the parties TO the transaction sec
ondv. the confidence displayed by the
customer, whose pecuniary interests were
so largely at stake. in the standards
Of conduct established on the New York
Stock Exchange, as displayed by his will
ngncss to submit tho entire matter for
arbitration to the Governors OF the FIX
change, although those gentlemen We're
friends and associates Of the commission
house with whom the customer differed;
thirdly, the strict impartiality of the Gov
ernors of the Exchange in deciding the
case; and, fourthly, the prompt accept
ance of this disposition Of the matter by
all parties concerned.
MIR. WHITE. Messrs. MILMINE, BoDMAN
L Co., their New York agent, and last but
not least, the Governors and members
of the New York Stock Exchange, are