Stock jobbing

“ That stock-jobbing, as it is now practised, and as is generally understood by the word stock-jobbing, is neither less or more than high-treason in its very nature, and in its consequences.
2. That the stock-jobbers, who are guilty of the practices I am going to detect, are eventually traitors to King George, and to his government, family, and interest, and to their country, and deserve to be used at least as confederates with traitors, whenever there are any alarms of invasions, rebellions, or any secret practices against the government, of what kind soever. ”

“ Who can answer that a scheme which oppresses the farmer, ruins the manufacturer, breaks the merchant, discourages industry, and reduces fraud to a system, which drains continually a portion of our national wealth away to foreigners, and draws most perniciously the rest of that immense property which was diffused among thousands into the pockets of the few,—who can answer that such a scheme will always endure? The whole art of stock-jobbing, the whole mystery of iniquity mentioned above, rises from this establishment, and is employed about the funds ”

“ In every stock-jobbing swindle every one knows that some time or other the crash must come, but every one hopes that it may fall on the head of his neighbour, after he himself has caught the shower of gold and placed it in safety. ”

“ Prices are not stimulated or advanced by stock jobbing operations and false rumors which so seriously affect values in speculative centres, but rest solely on the merits of the property which the security represents. ”

“ Thus the jobbers bite their friends, and these men bite the jobbers, qui sarpat sharpabitur,—Exchange Alley Latin: they that are let into the secret will understand it.
The truth is, it has been foretold by cunning men, who often see what can’t be hid, that these men, by a mass of money which they command of other people’s, as well as their own, will, in time, ruin the jobbing trade. But ’t will be only like a general visitation, where all distempers are swallowed up in the plague, like a common calamity, that makes enemies turn friends, and drowns lesser grievance in the general deluge. ”

“ Brokers rid night and day from one end of the kingdom to the other, to engage gentlemen to bribe corporations, to buy off competitors, and to manage the elections. You will see the state of things at that time, and the danger this stock-jobbing wickedness had brought the public to, if you please to read the following exclamation of the honest freeholders at that time, which was presented to the public by way of complaint. ”

“ The capitalists, in alarm, threw open the whole of their accumulated stock at greatly depreciated prices. There was no further demand for manufacturing labour, because the world was glutted with the supply, and hence arose strikes, panic, bankruptcy, and a period of almost unexampled hardship to the workman, and of serious and permanent loss to the master manufacturer. Speculation, therefore, in an old branch of industry, is perilous not only to the invester but to the prosperity of the branch itself. ”

“ But by what stretch of the imagination can the Stock Exchange be credited with playing any part in this third cause of the panic? If temporary depression results from exposure of wrongdoing among railroad, industrial, or financial institutions, nowhere in the land is execration poured forth upon the evil-doers more vigorously than within its four walls. Far from complaining, the Stock Exchange and the whole investment community welcome such exposures, despite their effect on the market, for the precise reason that their own protection and benefit, if nothing else, is promoted by it. ”

“ Little is heard in Wall Street these days about 'putting stocks up.'" But it was not long before irate customers began blaming their stupendous losses on advice they received from their brokers. Alec Wilder, a songwriter in New York in 1929, interviewed by Stud Terkel in "Hard Times" four decades later, described this typical exchange with his money manager: "I knew something was terribly wrong because I heard bellboys, everybody, talking about the stock market. About six weeks before the Wall Street Crash, I persuaded my mother in Rochester to let me talk to our family adviser. ”

“ But the methods of the capitalist class in deliberately pyramiding its profits upon the sufferings of the working class were evidenced in this case (as they had been, and since have been, in countless other instances) by the announcement in the Wall Street reports that this reduction in wages was followed by an instant rise in the price of the stock of the Fourth avenue surface line. The lower the wages, the greater the dividends. ”

“ But will it not be a Second Injustice to the Annuitants, after so great a Diminution of their Estates, to have Two Thirds of it ingrafted on a precarious Bottom? All Stocks having been suffer'd to divide above the Value of the Nett Produce of their Capital; a sure Way to distress Trade: Especially when Corporations are suffer'd to issue out Bonds, without Trading with the Money, but purely to advance their Stock. ”

“ Then he noticed above all the great white columns of the Atlantic Trust and he realized that these were the first frightened outposts of the army of despair and panic which would come storming at the doors on the morrow. By the morning a dozen banks scattered over the city were besieged by frantic hordes of depositors, a dozen others hastily preparing against the impending tide of evil rumor and disaster.
With the opening of the Stock Exchange the havoc began, for with the threatened collapse of gigantic banking systems orders came pouring in from all over the country to sell at any price. ”

“ One sees it in the speculations of laboring men, in the ventures of merchants outside of their regular business, in the gift enterprise shops, in the church-fair raffle and grab-bag. As I have before stated, buying shares in the stock market in the hope of a rise not based on development is as pure gambling as putting money on a monte card, and its evil effects are seen by the hundreds of working men practically ruined thereby. ”

“ I suppose you supermen enjoy seeing us naked savages squirm. Why talk sanctimoniously about the damage you might do, when you know damn well the damage has already been done? Just the news that something as advanced as the Matter Repositor exists has sent unemployment to a new high, and the stock market to a new low. ”

“ Is it possible these masters at last conceive again what they did in 1907 and 1914, and what we know they did in 1929—that by doing this they can have those who are possessed of anything dispose of it at any figure, and they can then issue new stock in the form of certificates with nothing to sustain it but water and audacity, and then sell those stocks to America under whatever guise they please, while their rottenness will rob the widows, cheat the poor, and leave the country bereft of its financial honor? ”

“ It is bad enough for stockholders to be annoyed and impoverished by stock-juggling operations, but when the employees also suffer the whole country suffers with them. It is an unpardonable crime for any company, managing a road which deserves to exist, to take such good care of its managers that its employees must strike and even fight to be sure of living wages. Railway strikes hurt every traveller, every shipper, every receiver in the country. ”

“ Whatever it is they seek, whether security, greater ease, more money or more power, it has to come out of the common stock, and so it diminishes the shares of all other men. Putting a new job-holder to work decreases the wages of every wage-earner in the land—not enough to be noticed, perhaps, but enough to leave its mark. ”

“ The long upward trend of fundamental progress, however, gave rise to over-optimism as to profits, which translated itself into a wave of uncontrolled speculation in securities, resulting in the diversion of capital from business to the stock market and the inevitable crash. The natural consequences have been a reduction in the consumption of luxuries and semi-necessities by those who have met with losses, and a number of persons thrown temporarily out of employment. Prices of agricultural products dealt in upon the great markets have been affected in sympathy with the stock crash. ”

“ As soon as the combination is effected the less efficient factories are generally put out of operation. But the stock issued in payment for them has to pay dividends. And the United States government guarantees profit on investment in factories that have gone out of business. As soon as these combinations see prices falling they reduce the hours of labor, they reduce production, they reduce wages, they throw men out of employment,—in order to do what? In order to keep the prices up in spite of their lack of efficiency. ”

“ Germain be preferable to an aristocracy of stock-brokers?
At all events, the law of supply and demand is beginning to redeem the situation, and, if not to restore our moral credit, at least to save the rising generation from falling into the same slough. The stock-broker industry has been overstocked, and the late young capitalists in fur overcoats, with benedictory manners, wear anxious countenances under the stress of that Old World demon, excessive competition. ”

“ The collapse of the rubber boom is one cause for the lack of business in the Stock Exchange. Hundreds of thousands of pounds poured into the plantation rubber industry by the British public are represented by huge stocks of certificates, the depreciation on which, reckoned from the price at which the public got them, will serve as a painful lesson till the next boom, from whatever quarter it may spring up, comes along. ”

“ Such a quotation provides an ample margin for what is called the jobber's turn, that is, the profit he expects to make by buying and selling the same stock, as a merchant. Wide quotations, which prevail in stocks that are not often dealt in, and even in stocks that are in times of panic, merely mean that the price the client has to pay is high, whilst the price he will receive for the same stock is low. The more enterprising the jobber, the narrower the prices he will make. Of course, in making a price the jobber does not undertake to deal in any abnormal amount of stock. ”

“ It is controlled by a little group of insiders, who followed the custom of rail-road-wrecking familiar to students of American industrial life: buying up new lines, capitalizing them at fabulous sums, and unloading them on the investing public; paying dividends out of capital, "passing" dividends as a means of stock manipulation, accumulating surpluses and cutting "melons" for the insiders, while at the same time crushing labor unions, squeezing wages, and permitting rolling-stock and equipment to go to wreck. ”

“ Back at the plant rumor had it that the machines were permanently gutted, and that the plant could never go back into production. Conflicting scuttlebutt suggested that persons high in uniondom had perpetrated the crisis deliberately, bullying Management into the strike for the sole purpose of cutting current dividends and selling stock to themselves cheaply. The rumors grew easier and easier to believe. The workers came to the plants in business suits, it was true, and lounged in the finest of lounges, and read the Wall Street Journal, and felt like stockholders. ”

“ The diminution of the capital stock of the society, or of the funds destined for the maintenance of industry, however, as it lowers the wages of labour, so it raises the profits of stock, and consequently the interest of money. By the wages of labour being lowered, the owners of what stock remains in the society can bring their goods at less expense to market than before; and less stock being employed in supplying the market than before, they can sell them dearer. ”

“ Bogus stock companies appear from time to time in Wall street. An office is rented and fitted up in magnificent style, a flaring programme is issued, and seemingly substantial evidences of the stability and prosperity of the company are exhibited to inquirers. The stock offered is readily taken up by the eager to be rich crowd. A dividend, most hopefully large, is declared and paid, to stimulate investments, and then, when the market has been drained dry, the bubble bursts, the directors disappear, the office is closed, and the shareholders lose their money. ”

“ They had come to regard money as an institution fixed and immovable in value, and when the price of property and wages fell they charged the fault not to the money, but to the property and the employer. Their prejudices 375were aroused against labor-saving machinery; they were angered against capital.” Page 53 (effects of a decreasing volume of money) : “It circulates freely in the stock exchange, but avoids the labor exchange. It has in all cases been the worst enemy with which society has had to contend.” ”

“ In a crisis wages and salaries are less affected than are profits, but wageworkers suffer in the loss of employment. Those money lenders who have eliminated chance as far as possible and have taken a low rate of interest lose little; the risk-takers who draw their incomes from dividends on stock or from bonds of a less stable kind, often lose much. ”

“ The stock-market is crashing, dropping tens of millions a minute, and business men are saying: "Oh, if we only had cash to buy, but we can not get it! The banks will not loan at any price. Rates have gone up to 100 to 150 per [459] cent. and no cash is in sight." No one has money but the big insurance companies and the "System's" votaries.
Suddenly mysterious buying appears—hundreds of thousands of shares of stock, and bonds in million blocks. The crash has been stayed; the panic is over; stocks are bounding upward again ”