Kingsbury County independent. (DeSmet, Kingsbury County, S.D.) 1894-1929, 1904-12-23
HIGH PRIcE-HieH QUALITY.
How Wall Street M~anipulators Mark
Tin Stocks.

Wall Street Journal: A butter mer-
chant bought two firkins of butter from
a farmer. The butter was all of the
same quality. made by the same hands,
from the same milk. But the merchant
displayed the two firkins for sale, put
ting over n the sign 80 cents a
pound" and owe the other 80 cents n
pound" Soon after a woman entered
and asked the price of butter. II have
some here" said the merchant, 'of ex-
cellent quality for 80 cents a pound"
But" replied the woman, Il see you
have some for SO cents a pound. I
always buy the best. Giv me a pound
Of that"
And the merchant, who had paid only
30 cents a pound for the butter. peck
eted with q chuckle OF delight the so
cents profit which he had obtained for
butter that he had been willing to sell
for 10 cents profit.
This is no fable. 1t is a true story,
and II illustrates n great truth. The
price has become a certificate OF quail
ity. If q high price is attached TO an
article, IL is regarded as evidence OF It's
superiority. The butter merchant in
putting a 50-cent price On 30-cent but
ter robbed his Customers. He lied just
as much as IL he had actually said to
them that this butter is much better
than the other, when, in fact, both are
OF h same quality.
In Wall street there is constant effort
made by market manipulation to put a
50-cent price on the 30-cent article,
md there can be no doubt that 1t is
dishonest. An ancient philosopher once
said that the value of a thing depended
OH what another man is willing to pay
for 1T, and in a ems this is economical
ly true. But practically the selling OF
an article for a nigh price may be dis
honest eve IL there are not merely one
but hundreds OF persons eager 10 pay
that price for 1t.
A new igsue of securities Is to be mar
keted. or some one has a big block of
an old issue that he wishes to get rid
OF. A Gkillful manipulation Is employed,
who proceeds to make a market for II.
He uses this method and that, and by
wash sales" or clever advertising and
adrcit exploitation he succeeds in es-
tablishing a quotation for the security
that invites attention. The investor
says TO himself: THAT stock is adj
v~ancing; ii is selling above par. IL
must be a good thing. / Will buy
some"
The quotation has thus been a recon-
mendation of quality. The investor has
beer victimized as much as the woman
was in paying SO cents for 30-cent ut
ter. 1t is true that the seller did not
drag the buyer into the market and
force him to purchase. 1t Is true that
the investor ought to have tested the
value OF the security. just as the wom-
an ought TO have tested the quality OF
the butter. Blu testing requires expert
knowledge. and the majority OF people
are guided in their judgments by the
price.
II cannot be doubted that the repu-
tation of Wall street has from time to
time suffered severely by reason OF its
manipulation of prices. OF course, In
the long run, the stock market accu-
rately measures true value. Manipu-
lation. after all, is temporary. 1t liz
poweriess to establish an enduring
price. But during the time that its
power Is effective II infiicts many losses
on innocent investors.
The or.ly remedy for this Is publicity.
There is nothing which the manipulation
breads more than the fearless, inde-
pendent ryan OF publicity. He strives
hard to control it, and, failing In that,
he tries to deceive ii, and thus the pub
lie which it serves.
Wall street should deal sternly with
all who display the 50-cent sign above
the 30-cent article. There Is no place
In the world where the adage, Honesty
Is the best policy" would pay better.
and where publicity would achieve
more, than in Wall street. A big vest
ern merchant has this for his motto:
Under no possible circumstances
will this house sanction sny I'd or
deed OF any employe designed to mis-
lead a purchaser
That would be a good sign TO hang
out in Wall street-and 1--we up 10.