The San Francisco call., 1904-02-14

Coal at one time threatened seriously
to embarrass the firm.
Colonel Thornton came to the rescue
Sally promised with q solemnity born
of sincere fear never to do 1t again =
But fright lasts only little space
and memory Is equally snort lived
/. Wall street has no room for men with
an excess of tin1idity or OF recollection
He had Rambled before he Joined the
New York. Stock Exchange
And then. too, Willis N. Hayward,
the board member of Thornton & Hay
ward, was a very different person from
Sally, the nice little telephone boy or
Tracy q Middleton's. His cheeks were
not pink; they were mottied. His eyes
were not clear and ingenious; they
were shifty and bit watery. de had
, been In Wall street eight or ten years,
and he overworked his nerves every day
from 10 a. m. to 8 p. m on the. Stock
Exchange: also from .. m. TO mid
night at the cafe Of a big uptown hotel,
where Wall street men gathered to talk
shop. His system craved stimulants;
gambling and liquor were the strongest
he knew.
When. after two years, the firm ex-
pired by limitation Colonel Thornton
withdrew He had had enough of Hay
wards plunging. To be sure Sally had
become a shrewd trader" and he had
made $4,000 during the big bull boom;
but he was at heart trader, which
is to say a mere gambler in stocks, and
not desirable commission man.
But Sally, flushed with success on
the bull side. did not worry when
Thornton refused to continue the part
nership. The slogan was: Buy A. o..
T. It's sure to go up" the initials
standing for ANY Old Thing! The
most prosperous period In the indus
trial and commercial history or the
United States begot an epidemic of
speculative madness such as was never
before known and probably never
again will be- Everybody had money
In abundance and the desire for specu-
lation in superabundance- sally
formed new firm immediately
HAYWARD & Co.-with his cashier as
partner.
All mundane things have an end,
even bull markets and bear markets.
The bull markets saw Hayward & Co.
doing good business, as did every
body else in Wall street. 1t ended and
the firms customers. after few bad
"slumps" in prices, were admonished
to turn bears in order to recou2 their
losses. Bears believe prices are too
high and should go lower; bulls, OPP
.tirnists, believe the Opposite. The
public can't sell stocks short any
more than the average man Is left
handed. These customers were no ex-
ception, so they did nothing,
Hayward had ''overstayed' the bull
market, though not disastrouslys that
Is, me was in error regarding the ex-
tent and duration of the upward move
mefrt OF prices. He proceeded to fall
into similar error on the bear or
downward side$The market had been
extremely dull following what the
financial writer's called a severe de-
cline" but which meant the loss of
I'LL hsr
Hayward's customers. like everybody
else's customers. were not speculating.
So he used their money to protect his
own speculations- Office expenses
were numerous and heavy and COM
missions few and light.
Hayward was very bearish. He had
sold stocks, sharing the bel1ef OF the
majority of his fellows that the lowest
prices had not been reached. AS
result he was heavily short and he
could not cover" at profit, because
prices had advanced very slowly but
very steadily.
one day a big gambler in Chicago.
bolder or keener than his Eastern
brethren, thought the time was ripe
for a "bulT' or upward movement in
/ general. and particularly in Consol1-
dated Steel Rod Company's stock. He
vassthc chairman Of the board Of d.
f.. rectors. William G. Dorr decided upon
q plan whereby the stock could be
made attractive to that class OF spec
ulatfve investors, so to speak, VINO
liked to buy stocks making strenuous
disbursements of profits to their hold
ers. Mr.. DORIS plan was kept Sc
cret. The first step consisted OF send
ing in large buying orders, handled
bv bv~prominent brokers, and synchron-
2 ously the publication in the daily
press of various items, all recitlng the
wonderful prosperity of the Consoh-
dated Steel Rod Company and Its phe-
nomenal earnings; also the unutter-
able cheapness of the stock at the pre-
vailing price Mr.. Dorr and asso-
ciates. of course, had previously TAX
en- advantages Of the big slump or
fall in values to buy back at 30 the
same stock they had sold to the pub
lie some weeks before at TO- Having
acquired this cheap stock, they man.
inulated''-by means of further pur-
chase-the price so that they could
sell out at a profit
TT so haDpened, however, that once
before dividend rumors about Con.
I. Steel Rod had been disseminated,
( with the connivance of Dorr, and they
had not come true, to the great .detri-
I rnent of credulous buyers and greater
profit of the insiders, who were
..short' of the stock up to their
necks''-a typical bit of stock jobbing
( whereat other and more artistic stock
iobbers had expressed the. greatest
indigna ton. Instead of putting the
stock on a dividend paying basis the
directors decided-at the last hour
that ii would not be conservative to
do so, whereupon the stock had bro
ken" seventeen points The lambs lost
hundreds of thousands of dollars; the
insiders gained as much 1t was a
mice turn"
Hayward remembered this. and when
the stock after several days of conspic-
uous activity and steady advances rose
to 81, he promptly sold short 5000
shares-believing that the barefaced
manipulation would not raise the stock
much above thatsfigure and that before
long it must decline Only a month
previously il had sold at 50 and nobody
wanted any of it. He was all the more
decided in his opinion that the top
had been reached by prices because Mr..
Dorr in a Chicago paper had stated
that the stockholders would probably
receive an entire years dividends at
one fell swooD by reason of the unex-
ampled prosperity in : the steel rod
- l.