Omaha daily bee., 1910-02-13

|Supstaullal snort interest Is an element or
strength. People who sell stock short must
buy It back sooner or later. and this buy
ing or covering is often as effective In
maintaining prices as is investment buy
ing.
Presently experienced spectators. noting
that profits were attainable only on the
long side, began buying the stock in large
quantities. Mr.. Keene let them take down
their profits. knowing undoubtedly that
they would then buy more. Their profits
attracted the attention of others. and soon
every brokerage office was unreservedly
advising its customers to buy steel. until
finally a veritable craze for the stock
spread over the country and Mr.. Keene's
work was done.
Manipulation Of this character, service
able alike to buyers and sellers. is con-
Ptantly practiced. 1t is employed when
ever a new corporation launches It's Sc
I%curities on the market. whenever new Sc
%curities of an old corporation are offered
for sale and very often when the general
market is declining rapidly and men
heavily Interested in a particular stock
wish to prevent its market price from
going down with the general market. It
is called inside support by Wall streets
trading fraternity. which ordinarily dis
trusts a stock which lacks support in
troublous times.
skill of Edwin HawIey.
Manipulation of another sort was prac-
tised last summer by Edwin Hawley, an
other master manipulation now regarded in
Wall street as Mr.. Keene's superior. Mr..
Hawley had already acquired a string Of
railroads and wanted the Missouri, Kansas
& Texas to round out his system. Control
Of 1t was In the open market. and naturally
Mr.. Hawley did not want to pay any
more for it than he had to.
II knowledge OF his intention had leaked
out every trader and Spectator in the
country down to the ten share piker would
have "goine to- the stock, 1t was thus
Mr.. Hawley's business to conceal his pur-
chases. lie went a step further and made
the stock look not only as IL he didn't
want II but as II no one else wanted 1t.
A bull market was in progress. Every
other stock on the list was advancing
steadily day after day. Katy alone held
back. Its earnings were far better and it's
financial condition far sounder than the
finances Of many roads with stocks selling
far above il.
Groups OF spectators time after time
formed pools in the stock in the effort to
make a profitable turn. Always they en-
%countered a flood of selling orders that
sent the price down and sent them running
into some other speculation.
Effect of the Campaign.
After a while It began to be whispered
around Wal street that something must
be wrong with Katy" Insiders fed out
stock to any one who tried to bull it
Market critics said time after time that
katy" looked sick. The opinion became
general that the stock didn't have a
friend.
All this time, as II turned out later,
Mr.. Hawley was executing one of his most
famous coups. How for months he kept
steadily accommodating the stock without
advancing the price and without the slight
est intimation of his operations leaking
out is a thing a great many people would
like to know. All that these Interested
people do know is that in some account
able way they grew tired of holding a
stock that wouldn't go up and sold 1t into
Mr.. Hawley's capacious hands. They also
know that not until after Mr.. Hawley So
cured control did the stock display the
slightest resiliency. Its buoyancy then
was gratifying-to Mr.. Hawley.
Mr.. Hawley executed an equally cele-
brated campaign several, years ago, when
in association with the old Rock Island
party. the late w. B. Leeds, d. G.. Reid,
Judge Moore and j. Hobart Moore, he
took the Chicago & Alton away from e.
II. Hartman and Kuhn, Loeb G. Co. That
was an accomplishment worth while, for
the opponents were persons not at all easily
beguiled.
Mr.. Hawley's associates in the campaign
had a knowledge Of market operations Sec
ond only to his own and undoubtedly it
required the combined resources and ablli-
ties of all so to conduct the campaign as
to escape detection. Mr.. Hartman never.
liked to talk about the transaction and
left no doubt in the minds of his associates
that he considered It a case in which he
was caught unawares.
Secrecy and Knowledge Needed.
These are examples OF the fine art of
manipulation, Obviously the man who has
mastered them must have in the first
place an intimate knowledge of men. He
must know the men who can be trusted to
do business as they are told and to keep as
quiet as the Sphinx.
He must also have the most accurate
and speedlest information Of the other
men trading in the stock. must know
whether large selling orders represent real
stock or short selling, must ascertain
whether buying orders come from specu-
lators, investors or some competitor bid
ding for control. 1t is apparent that the
working Of all this machinery without a
leak or a slip requires an organization as
perfect as the secret service.
The criticism which the Hughes COM
mittee directed against this manipulation
designed to secure. large blocks at a cheap
price was that 1t induced other holders to
part with the stock at a loss. The COM
mission, however. admitted an inability to
discover a complete remedy short of abol-
ishing the Stock exchange itself.
Executing n Large Order.
Other varieties OF manipulation OF which
the Hughes commission did not complain
are known and practiced by every ex-
perienced broker. One of the commonest
forms is in the execution of large buying
orders In such a way as to produce no
violent advance. A broker accounted skill
full In getting what Wall streets calls good
execution thus describes a typical case:
zone OF our customers Is a man who
occasionally plunges heavily. Often he
gives us orders in 10000. 10000 or once, in
a long time, $1,000 shares. In the execution
of the last $4,000 share order my partner
went on the floor, while l made arrange
ments with other brokers to so into the
1 proNld and sell tho afOsl a., caea fha otban