New-York tribune., 1906-07-15

in order TO pet means 70 make good his losses
in Erie. He knew very well that the bankers
were long of Union Pacific; and when they
realized that If they pushed Gould 20 the wall
in Erie they would suffer losses IN Union
Pacific they quickly found IL possible to supply
the loan Of Erie which Gould had requested.
Leonard w. Jerome, who was in his day
one of the leading operators IN Wall Street,
was accosted in the street by an acquaintance,
who told him that he had become member
of a stock-exchange house and solicited the
favor of some Of JerOmes business. JerOme
told him that il was impossible, lnasmuch as
the new broker would not have the courage
TO keep his business to himself, and would
soon be telling around the street what he,
Jerome was doing; and moreover would be
likely 70 duplicate his orders by purchases on
his own account, and thus inevitably involve
himself in losses The broker made loud pro-
testations of his ability to mind his own busi-
ness and that of his client, and also of his in
tentiOn not TO speculate on his own account
Jerome then said that he would give him
a trial and told him 20 buy two thousand
shares of a certain stock. Now, Jerome was
heavily long of this particular stock, and was
anxious 20 create market IN which he might
sell The broker Immediately began whisper
ing around among his friends that jerome
was buying this stock, which was bound TO
have a rise, and soon demand was created
for the securities, the broker himself buying
block on his own account. All the stock
thus bought came OF course from Jerome
through his other agents. The broker dis
covered too late that Jerome had judged him
better than he had himself, for his losses
forced him into insolvency.
Much the same thing happened number
of wears later TO a well-knOWn and popular
broker named Marvin, who was esteemed as
one of the ClevereSt men on the floor of the
exchange when executing orders for a client.
Marvin received orders to buy an enormous
block of certain stock, these orders coming
from one of the most powerful capitalists in
the street Marvin believed that the orders
represented what the street called good buy
ing, and, thinking 20 add to his fortune, he
made large purchases on his own account of
the same stock What he was really doing,
however was simply to execute orders that
represented one side of huge transaction.
Marvin's client, while giving him orders to
buy, had given larger orders to other brokers
TO ell. He was not acquiring stocks but dis
tributing them, and Marvin therefore in
vOlved in heavy losses.
One of the old stories of the street is that
Commodore Vanderbilt once befriended a
former Staten Island friend by giving him a
tip on the market. The tip proved true, and
the friend made a pile of money. The result
was that a good many people IN the street
began TO watch this friend of Vanderbilt's,
believing that they could safely follow any
thing that he did IN the market as representing
the Commodore. This IS exactly what Wander
bit was working for, and he soon had induced
the Staten Islander to lead his following into
the purchase OF a certain stock which Wander
bilt was trying TO get rid of.
These anecdotes merely illustrate various
phases of manipulation and speculation. But
they give no adequate idea of the scope and
variety of play permitted in the Wall Street
game. Nor do they give any large impression
of the immense power of modern operations
in high finance. They afford little conception
of the thousand and one expedients and ruses
of speculation; the washing of sales in order
to create fictitious quotations; the sudden
buying of this stock so that under cover of
its rise the selling of another stock can be
effected; the pegging of prices; the employ
ment of tOuts and tipping bureaus; and the
scientific distribution of calls to people able
to influence public sentiment. Nor do they
give any large idea of the strategy displayed |
by the big leaders of finance the arts by which |
the control of corporations may be captured |
and great combinations effected. They do |
not reveal the dramatic consequences of a |
pitched battle between two powerful financial |
such battle, for instance, as that |
which took place IN 1901 for the control of |
the Northern Pacific.
An authentic account Of the wav Tohn W |
Gates got possession of the Louisville & Nash |
vile, right from under the very nose of August
would make an instructive study of /
one branch of manipulation. The power of a |
big Stock-market manipulation who should /
have the placing of the fifty or the hundred Il