Year: 1879

New YORK, Nov. %, 1879.


Such furry as there has been among the
stock speculators this week! The buyers for
rise have been having everything their own
way for so long time that the idea seems to
have become general that there never would
be any reaction. Every stock in the list has
been quoted for weeks past at extravagantly
high figures. Those that are known to possess
actual value have risen much less in proper
ton than the meaner grades about the worth
of which no human being appears to have any
idea whatever. Railway securities are of va
rious kinds and of variable quality. There are
often First Mortgage Bonds, Second ditto,
Third ditto, Income Bonds, Equipment Bonds,
Preferred Stock and Common Stock. There
are great quantities of each description afioat,
and as they were generally put out when
everything was at the dearest, they do not
represent quite so much property as they
might. Still, as rule, the First Mortgage
Bonds are good for their face. The interest
on them may be defaulted on in hard times,
but sooner or later the holders of them if they
are patient will get their money. 1t is much
more questionable whether any revenue can
be got out of the Seconds, but there are roads
whose earnings suffice in extraordinarily flush
seasons to meet this demand also. Over all
the rest such cloud of uncertainty hangs,
that man who wants to keep on the safe
side in estimating his estate will leave them
out of his inventory. When you get down to
the Common Stock, buried as it is beneath six
huge columns of prior liens, every one Of them
enough to take the life out of the concern, it
must require remarkably sanguine tempera-
meat to anticipate that it will ever be worth
anything And yet this is the kind OF parch-
ment that they have been buying and selling
in the market here by the millions of billions
of trillions, at from twentieth part of what
the par rate of it is, up to three-ffths. Many
a man has sold for thousand dollars what he
paid hundred for within six or eight months
and some have multiplied their gains in that
ratio in transactions of considerable magni-
tude. But as nothing remains at the end eX-
cept the original certificate, it is plain enough
that unless by some miraculous interposition
these shares can be made to earn something,
the ultimate holder of them will lose all that
his predecessors gained. The public at large
have no particular interest in the matter.
Nothing goes out and nothing comes in, as far
as they are concerned. There is, to be sure,
withdrawal of large number of able bodied
men from pursuits in which they might be
adding something to the aggregate wealth, but
they are not persons who would be apt to per-
form much physical labor even if they had no
other use for their time. Beyond that their
operations subtract nothing from and add moth
49, - ,,,1;f Tho
millers who grind the grists of these adventur-
Gus spirits are the brokers, and the tolls they
take amount in the course of year to stu
pendous sum. The brokerage is an eighth of
one per cent. on the par of $780, so if 100
shares OF stock are sold at S5 per share, or for
$3.50 per share, the expense of selling or buy
ing is in either case $3.50. In the former
instance it amounts to a very large commits
sion, in the latter to an extremely small one.
No doubt good many of these low priced
fancies-it would sound like a joke to call
them securities-have been swallowed up
twice over by the brokerages that have been
clipped off of them


The purchases are mostly made on the de-
post of a margin. That is TO say, an operator
buys what will come to hundred thousand
dollars. We will take that figure for an illus
tration. He "puts up" ten or maybe twenty
thousand dollars. The amount of the margin
required depends somewhat on the RESPONSE
bility Of the party, and somewhat on the char
acter of the stock he is trading in. If prices
fall, there is more margin called for, and if
the demands of the brokers are not responded
to Immediately, their shares are sold at what
ever they will bring, and thus their original
capital is all swept away. 1t is perfect net
work of borrowing any way, for the broker as
fast as he buys stocks on a margin hypothe-
Gates them with his bankers as collateral Sc
curity for loans The commission on thous-
and shares of stock is only S125, and if it rules
at par the negotiator must pay out 100000.
OF this he generally borrows as much as $780,
90, for which he gives his note payable on de-
mand, pledging the thousand shares of stocks
to make the loan secure. He is exposed all
the time to the hazard of being called upon at
any moment to pay up, and If he does large
business, he is very probably in debt millions,
every dollar of which he is liable to be asked
for without the slightest note of warning, ex-
cept as he OWNED it by noticing that money
is getting in sharp demand. 1t is one of the
sights of New York just now to see the deni-
zens of the stock mart rushing to and fro be-
tween and o'clock every afternoon, making
arrangements to keep their bank accounts
good, Anything oyer?" is the stereotyped
query that is on many tongue When the