Evening star. [volume] (Washington, D.C.) 1854-1972, 1907-05-19
Financial News Letter
BY ". G. NICHOLAS.
Special Correspondence of The Star.

with the stock market has plunged into
grain, thinking to get a better run for its
money. The present bull market in wheat
resembles that in 1904 in one particular
That bull market, just like this one started
with wheat at the SO-cent level. The price
had been holding around that level for
months and there was little doing in the
market Then some of the grain houses be-
gan to get line on the crop through their
crop reporters and started quietly accumu-
lating wheat. The price was advanced to
W cents without attracting much public
interest. The same stories went around
then as have gone around this spring. tend
ing to discredt the crop reporters, who
were called crop killers. Then the stories
or damage to the crop began to become pub
Tic property, and were spread out in the
newspapers When wheat reached 95 cents
the public began to come in strong, and t. &c
farmers themselves got bullish. There was
a violent advance in the market as soon as
hhls public buying came in Some of the
wheat operators, who had begun their bull
campaign at 50 cents. tried to put brakes on
before wheat reached 81. They sold an inn
mense line of wheat, but the public alb
sorbed it all and took the market into it's
the wise ones to do but follow the crowd
and wheat went on up 20 cents more.
Big money has been made in grain Spec
ulation by Wall street operators but a true
balance sheet would show more money lost
than made. Wall street usually gets into
the grain market at the eleventh hour.
boosts prices by sheer physical strength,
and then finds itself hung up high and dry
when an attempt is made to convert paper
profits into cash. It's the easiest thing in
the world to put the grain market up by
buying wheat day after day in million
bushel lots. but it's quite another thing to
find market for big line of long wheat
after the fever has left the public. Some
years ago James r. Keene made a big play
In the Chicago market and put prices up in
the Wall street fashion. He accumulated
many millions of bushels of wheat, but
when he tried to sell it prices tumbled away
in startling manner. 1t is related that
Mr.. keene was two years getting rid of
the real grain that he had to take on his
contracts, and that the last lot he sold was
cargo for Cadiz. Mr.. Keene's friends
used to say that the "Old Man" had scouts
out all over the world looking for people
who wanted to buy wheat John W. Gates
has plunged more or less in wheat and has
also taken some big losses. Mr. Gates came
in on the tail end of the 19O4-1OO5 bull mar
ket in wheat, and made up pool to put
the price to $1.JO. The early BIRDS who
began bullng the market around so cents
had taken all the rich pickings, and were
well out of the market when the Gates
pool took hold about 30 cents higher AZ
ter Mr.. Gates and his friends had loaded
up with some 15,000. 900 or 10000 600 bushels
1t Is reported that Mr.. Gates went to Mr..
Keene to ask him to join the pool The vet
eran operator asked Mr.. Gates how much
wheat he was carrying When the figure
was named Mr. Keene only remarked,
We'll. I'm sorry for you. Gates; l don't
think you'll ever be able to sell It," The
Gates pool boosted prices for while but
couldn't find anybody to sell out on and
then wisely decided to dump the whole line
in the market a. any old price. 1t was Cos
siped that the Gates pool took big loss.
but its loss wasn't to be compared with the
combined losses taken by the followers of
the pool.
The effect of short crops on railroad tom
mage Is thus analysed by an expert: wall
street is usually slow to credit early warn
ings of crop disasters. 1t refers to reports
from the green bug area as trash and
laughs them away as long as 1t is possible
to do so. But when at last the truth daWns
upon the stock exchange, it Is made the
foundation of attacks on values out of all
proportion to the damage which is likely to
result. Thus are told in one days Cos
sip from New York that the crop scare is
mostly imaginative and the next we are
assured that the Santa Fe has to reduce
It's common stock dividend in consequence
of losing much freight. Neither story
will stand analysis. The best approximation
our chief crops makes the total about IA
100000 carloads annually. This estimate
takes into account the division of haul
among all the carriers, and as it has the
highest railway authority, we may accept
Ii as near enough correct to serve all pur-
poses. From this traffic the roads derive
revenue of about S525 100000 year. The
freight on wheat amounts to $63, 600 600; in
oats to $40, 600, goo, and on corn to 1927 OOO,-
600. That is to say, the three ma jor crops
contribute to the carriers about two thirds
Of the total revenue from the ten principal
farm products"
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