The Billings gazette. [volume] (Billings, Mont.) 1896-1919, 1903-03-24

nuSu q IIdf,l JIGt'AI ClOluUOuuu ClTCuldT
telling of the greatness of the South
ern Pacific railroad, it's marvellous re-
sources, it's wonderful territory, its
growing industries, it's thriving towns,
its rich mineral prospects,, it's splendid
record of earnings. They stated in
this circular that before the end Of
1902 Mr.. Hartman and Union Pacific
would decide to pay a dividend Of 4
per cent on Southern Pacific stock.
They gave to the world the impress
sion that Mr.. Hartman and Union
Pacific had pledged themselves to the
declaration Of this dividend. They
left to the world not a single doubt
as to the fact that Southern Pacific
by the end of 1902 would be a dividend
stock, paying its shareholders a rich
return on their investment.
Southern Pacific went up. It went
from 60 to 70 in a week. 1t went from
20 to 80 in three weeks. There it
checked. Somebody was selling. Mar
ket sharps in the offices nudged one
another as they watched the ticker
and confided to one another the Sc
cret: "Keene is selling the pool stock"
That was the crucial moment in
the history of this great pool. If it
had been true that Keene was doing
what his admirers thought he was
doing all would have been we'll. It
is true that Mr.. Keene denied fatty
at that time that he was selling South
ern Pacific, but of course no one be-
lieved him. No one ever believes
the leader of a pool in Wall street,
so the public winked and made re.
marks complimentary to the genius
but not to the veracity Of James r.
Keene Meantime the selling contin-
ued. Southern Pacific was traded in
tt a tremendous extent. Some days
as much as 100, 900 shares crossed the
board. People began to wonder who
was doing the buying. The stock
seemed to be pegged around 80.
Then, as suddenly as it had become
active, the stock became dull. People
said that Keene had got out of South
ern Pacific.
Meanwhile Mr.. Keene was having
troubles of his own. 1t can be stated
now in the light of subsequent events
that Mr.. Keene had sold no stock of
Southern Pacific. Or. the contrary to
keep the stock from dropping back to
where it was when the pool began he
had been obliged to buy an immense
amount of additional stock. For once
the great leader was beaten. He did
not know where the stock was COM
ing from. He thought that some per-
son was selling short, and he thought
that it would be interesting to squeeze
that person. 1t was the mistake Of
MI. Keene's lifetime. The person in
the question was e. H. Hartman, a
man who had in his treasury more
Southern Pacific stock than even Mr..
Keene and his powerful pool would
care to buy, and a person moreover
who if control of the Southern Pacific
nee passed out of his hands could
turn around and make Southern Pa
cific worth less than $25 per share.
1t was never a part of Mr.. Harri-
mans plan to let the Southern Pacific
pass out of his hands. He knew, what
MI. Keene did not know, namely that
there was coming ON the street a
period of money stringency. He knew
that during such a period thousands
CT shares of Southern Pacific would
be thrown into the street and the
buyers for this stock would be few
and far between. He knew that he
could stay short of the market until
this time came and buy at bargain
prices the stock that he had already
sold to Mr.. Keene and his friends.
Therefore he sold and sold heavily.
Mr.. Keene did not take the members
OF the pool fully into his confidence.
They had surrendered all discretion
in the matter OF the pool stock into
Mr.. Keene's hands. They were abso-
lutely guided by his word. He told
them to wait, and they waited-and
are waiting still.
Tight money came. Il swept upon
the street suddenly. Prices crumbled.
Stock values dwindled rapidly. All
the work of Mr.. Gates six months
campaign was undone in three short
all over England, Germany, United
States and Canada lost in those three
weeks every cent that they had been
induced to put into the Wall street
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