Evening star. [volume] (Washington, D.C.) 1854-1972, 1906-07-15

to Gould and demanded an explanation
Gould said that being unable to cover his
Erie he would have to sell his Union Pacific
in order to get means to make good his losses
in Erie. He knew very well that the bankers
were long of Union Pacific; and when they
realized that if trey pushed Gould to the wall
in Erie they v I'D suffer losses in Union
Pacific they gu; -iy found it possible to supply
the loan of 7 le which Gould had requested.
Leonard ". Jerome, who was in his day
one of the leading operators in Wall Street,
was accosted in It's street by an acquaintance,
who told him that he had become member
of a stool exchange house and solicited the
favor of some of Jeromes business. Jerome
told him that 1t 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 to 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 bust
ness and that of his client, and also of his in
tention not to speculate his own account.
Jerome then said that he would give him
trial and told him to buy two thousand
shares of a certain stock. Now, Jerome was
heavily long of this particular stock, and was
anxious to 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 rise and soon a demand was created
for the securities, the broker himself buying
block 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 a 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 a 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 to 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 a huge transaction.
Marvin's client, while giving him orders to
buy, had given larger orders to other brokers
to ell. He not acquiring stocks but dis
tributing them, and Marvin was therefore in
volved in heavy losses
One of the old stories of the street is that
Commodore Vanderbilt once befriended
former Staten Island friend by giving him a
tip on the market. The tip proved true, and
the friend made 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
bilt was working for, and he soon had induced
the Staten Islander to lead his following into
the purchase of 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
interests such a battle, for instance, as that
rut,; Cb o1a he Of