The Savannah morning news., 1903-12-13
WALL STREET TRADITIONS
Very Cold For Boom in the Stock Market
About This Time.
BY w. J. NICHOLAS.


dtions call for a December "boom" in
the stock market. Another name for
such a December boom" is a Christ
mas movement" In London they call
it window dressing" The facts are
that financial and business interests
generally are benefited by an up
ward movement in security values to-
ward the end of the year, and that i'm
portant financial institutions either CO.
operate with professional operators to
bring about such movement, or at
least encourage the latter to bull the
market by giving them money on easy
terms. Professional traders knowing
this to be true, regularly array their
epeculations on the long side of the
mal1et at about this season of the year.
After a depression such as has been
experienced in Wall street and with the
effects of that depression now mani
testing themselves in industry and
trade throughout the country, nothing
can be better calculated to cheer men
up than a sharp upturR in security
values. The psychological effect of a
rise in prices under just such condi-
tons as those now prevailing is very
striking. A much more potent rea-
son why financial interests encourage
q rise in stocks at the end of the year
is that security holding corporations,
notably insurance companies, who is
sue annual reports of their invest
ments and the state thereof are load
ed with stocks and bonds that cost
them considerable more than current
quotations. 1t is therefore, only rea-
sonable that they should be interested
in seeing prices advance so that the
differences between the quotations at
which the securities are figured in their
statement and the prices paid for such
securities will be reduced. Such diff
ferences are not nearly as great now
as they were a month ago. In Lon
don, as previously remarked, this
procedure is called window dressing"
The sharp upward movement in
stocks began two weeks ago. Opera
tons for the advance were favored
immensely by the existence of a great
ly over-eXtended, short interest, the
proportions of which had been under
estimated in Wall street. Successful
operators in the stock market are as
keen students of human nature as they
are of the condition on which values
IN the long run are based. An opera
tor such, for example, as James r.
keene, knows speculative human ma
ture in all of it's contradictions. Mr..
keene, by the way, has figured very
prominently in the operations for the
advance referred to. After the rise
had gone about 8 per cent. throughout
the active list financial critics began
to warn their followers against buy
ing stocks on the bulges, and to wait
until a reaction was effected. After
the rise had gone 2 per cent. further,
nine-tenths of the traders and a large
majority of brokers, knowing how
highly n1anipulative the market was,
declared very positively that prices
could not go on advancing without
reaction and traders began to fight
the movement. Now if everybody ex-
poets a reaction in the stock market,
1t will not occur, because for one rea-
son, the professional trading element
will sell short and thereby play into
the hands of the bull crowd. The lat
ter has only to carry the advance 1
per cent. or SO further by sheer force
OF manipulation and the shorts will
buy back their stocks at loss. This
transaction will be repeated two or
three times, until finally Wall street
is convinced that the movement is
genuine 1t is at this point that COM
mission houses begin to take stocks
freely, the market has great volume
on the advanced level, and the bull
crowd distributes its speculative hold
1ngs at profit and stands from under.
In other words a manipulative move
ment needs only to be carried far
enough for everybody to be convinced
that 1t is more than manipulative and
has the backing of important inter-
ests. In order to create this impression
manipulative orders are placed in the
hands of brokers who represent big
banking interests, and then it is said
in Wall street literature that stocks
are being bought by insiders. Deem
Der booms, as a rule, are more or less
artificial, and are apt to collapse very
suddenly, unless the public comes to
Its support and takes stock on the
advances. AS yet there has been no