Evening star. [volume] (Washington, D.C.) 1854-1972, 1905-10-01

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It Is certainly not more than ten years
ago that London owned the controlling in
terest in Pennsylvania. How times have
changed, to be sure. The idea Of anybody
but one Of somewhat contracted ring Of
great railroad financiers holding the control
of anything worth having seems almost in
conceivable nowadays. And yet the pu r.
Ontario and Western were very largely
made on the other side Of the wafer, not
much more than g. year ago. II Is likely
that the Dutch stockholders really do dic,
tate the policy Of Missouri, Kansas and
Texas, and unless some very positive claims
go for nothing they are large holders OF
Denver common and possibly the largest
single interest in Kansas City Southern.
A~k
Every exchange in Europe dealing In
American stocks at all has its own method
of doing so. 1t looked at one time as If a
fair market might be created on the Berlin
bourse. That hope was nipped in the bud
by some very well-meant but ill-reasoned
legislation. The virtuous idea was to check
speculation. Consequently no one was al
lowed to sell anything without giving the
number of the share certificate, or to buy
anything without arranging for a banker to
take it off the market Immediately. The
result was to destroy the market for stocks
altogether. BUSINESS eltneT concentrated III
the hands of limited number of bankers
who were no better off, because their ac-
tive broker-customers were ruined or bust
ness went away from Berlin altogether. 1t
was a horrible example of what happens
when people are governed too mucn
Amsterdam has another way peculiar TO
itself. ALI the American stock there is reg
istered in the names of very small num-
Der of large banks and financial houses,
who issue their own certificates against
their holdings. 1t Is not bad system Tor
the bankers as it makes them power IN
the government of any American property,
but the drawback Is that their certlncates
are not worth anything outside of Holland.
This market nevertheless is growing. 1t Is
credibly reported that only a year ago
Dutch holders for 100000 Steel common,
each of Erie and Southern Railway COM
mon could be traced. This is to say moth
ing of recent issues of American raliroao
bonds which have been SO successfully
placed on the other side of the Atlantic
London is the best European market Of
all and in some ways Is better market
than ours. This sounds like tau order,
but an examination of the methods OF the
London Stock Exchange will show why
there are times when the statement Is
strictly true. If broker wishes to trade
In the New York Stock Exchange he goes
to a recognized place on the moor ana oios
for the stock he wants or offers the stock
he has to sell. The London broker does
not do this. In the market for American
stocks there stand some 200 Joboers,
members of the stock exchange, who deal
with nobody but the brokers and have no
transactions with the public. The broker
does not tell the jobber what he wants 10
do. He states that he wishes to deal IN SO
many hundred shares of stock, and the
iobher makes him a price. The jobber says
1.-THE price is 74A to 14i3- This means mat
he will buy the brokers' stock at the for-
mer figure or sell him an equal amount at
the latter
The broker does not deal so closely as
we do. but even in panics the jobber, be-
cause of the competition In his business,
will always make him some sort OF price.
1t may be very wide price, but 1t orten
hannens In a panic in our market that it
is Impossible to sell stock at any price
whatever.
In the panic of the 9th of May, 1901. a
certain young broker, whose name 1t Will
be kind to suppress. had 200 shares of Jer-
sey Central open for a customer and deter
mined to sell it. There had been no trans
actions In that stock In the morning, and
the quotation therefore had not even
changed The young broker. however, was
badly ratified. He was only five and twenty
and he had never seen panic before he
probably did not realize that he himself
was the essential part OF the panic he
stood at the Jersey Central post all alone
tfor the activity was in other parts Of the
room) and offered the stock down from lob
to 1903 without attracting the slightest no
tice. At his last offer one OF the old MEM
bers of the exchange, accidentally strolling
past him, heard the prepOsterous price, saw
the misguided young man spelling his own
market and took his stock from him at l03.
The next sale was at las.
This is very extreme case, of course.
The young man in question knows better
now, and, after all, he learned his lesson at
somebody else's expense, but brokers in the
exchange do not do things quite SO foolish
as a general rule. In the London market
the young man would have found a Job
ber' who would probably have quoted the
price at $50 to 153 or something like that.
He would have sold his stock at $50, or
three points below the previous sale, but he
would have saved his customer matter of
Al points, which is quite good deal IL the
customer is trading on ten-point margin.
About the first question anybody puts to
anybody else when he comes into wall
street In the morning Is How's London?
London has been trading for something
like four hours before our opening, as bust
ness actually begins there In earnest at IL
am, corresponding to O am. here. 1t will
be seen that London has had the chance
of discounting events which have happened
overnight. Some important dividend may
have been declared, or the German en-
peror may have made a speech, OF some
body may be dead of sufficient consequence
to move the market London therefore es-
Inmates exactly what the market value Of
the news is. Our arbitrage houses start
work very early in the morning, and are
sending messages to the other side long
before the market opens here. They are
therefore closely watched In the first few
minutes of trading, and often give an indi-
cation, as they buy or SELL of currents
which have not yet had time to develop.
And yet It must not be supposed that
Wall street is not still the court Of last
resort where American stocks are con-
cerned That is the striking development
Of the past few years OF which spoke at
the beginning of these remarks. London.
for instance. will often entirely misinter-
pref a piece of news SO far as its market
meaning is concerned. A prominent rail-
road, for instance. announces a new stock
issue. with privileges of subscribing to the
present stockholders, which have distinct
market value London may only consider
the increased capitalization. and has gem.
orally something of a tendency to take that
view. New York. ON the other hand, may!
say that the rights are worth q good deal
of money. and many therefore bid the stock
up.
Our bankers are very well informed, and
with the increasing international impor-