Stock rider

“ If the market was for any reason active, the brokers and their agents were apt to be more numerous than if it were dull and the trading indifferent. A gong sounded the call to trading at ten o’clock, and if there was a noticeable rise or decline in a stock or a group of stocks, you were apt to witness quite a spirited scene. Fifty to a hundred men would shout, gesticulate, shove here and there in an apparently aimless manner; endeavoring to take advantage of the stock offered or called for. ”

“ He bought a control of the stocks and bonds of badly-managed and bankrupt railroads. He consolidated them, re-equipped them, built feeders, opened new sources of traffic, and so doubled, trebled, and quadrupled his investments. He sold short the stock of a prosperous railroad, and obtained, by purchase of proxies, the control of its management. He 216cut rates, diminished traffic, enlarged expenses, and passed dividends until he depreciated the value of the stock to a point where he could gain millions by covering his shorts, and other millions by again restoring the road to prosperity. ”

“ A favorite thieving device is the watering of railroad company stocks. Every worker should know how this chicanery is operated. Let us explain it briefly: Suppose, for instance, a certain railroad is capitalized at $100,000,000. To water its stock the controlling capitalists, on the pretext of improving the property, issue, say, another $100,000,000 of stock. ”

“ The people pay dividends upon it. The freight and passenger rates are kept up, and accommodations kept down, and labor squeezed, and safety appliances neglected, and bridges allowed to stand till they fall beneath a load of screaming, bleeding, dying passengers, because the Wall Street rascals who watered the stock demand dividends upon the millions which they created out of ink and paper. ”

“ Briefly, without technicalities, I had planned to unload the securities of the P., Q. & X. Railway, protecting myself through brokers, and force the outstanding stock down to a price where other brokers, acting for me, could buy far below the actual value. ”

“ The miner deep in the bowels of the earth and the crew on a swiftly moving railroad train, the track walker and the laborer are all exercising indirectly an influence. All the great railroads and industrial corporations come to Wall Street in their time of need, and if their object is worthy they do not leave with their wants unsupplied. Wall Street proper, as represented through the New York Stock Exchange, is the barometer of the country. Every man, woman or child who has a dollar invested or deposited in a savings bank is interested in the good or bad times which prevail in the Street. ”

“ Just in the same manner, if you wanted to buy some stock, you would go to a stockbroker for it, and not to a stockjobber—the stockbroker occupying the same position as Marshall and Snelgrove, while the stockjobber stands in the place of the wholesale house in the City.
The stockjobber, or wholesale merchant, is always ready both to buy and sell with the broker. If you give an order to the latter, he darts into the Stock Exchange, and without disclosing the nature of his order to the jobber, inquires of him the price of the particular stock which you wish to deal in. ”

“ We could take out a Raymond excursion or a theatrical special one way, and coming back make a fly run with belated stock for a distant market. We may yet do the same with the compound battleship, but it will first require alterations and a big expenditure on track. When stock shows up you must get it moving. You cannot hold it to club trains, as in the case of coal and pig iron. You miss the market and there is a big claim to pay, to which the financial gentleman in New York does not give sufficient weight when he makes his wonderful analysis of our figures. ”

“ A shrewd man, one of the old school of New York City wholesale merchants, who has nothing whatever to do with Wall Street or the Stock Exchange, yet whose trade arteries extend to many parts of the country, has long governed his business by the published reports of Stock Exchange transactions. If he sees there revealed a wholesome, normal, and conservative expansion in all lines of business and a money market that betrays no uneasiness as to the future, he presses on into new lines of endeavor, confident that the immediate future is serene. ”

“ They argued, therefore, that their buying power and their inclination to buy were nearly exhausted, and that the stock market had become largely a field of action for certain heavy and reckless speculators, each of whom had suddenly made many millions by the formation of new trusts and railway combinations. Some of these had become multi-millionaires through the early sale of the heavy amounts of United States Steel stock they received in exchange for their plants when that huge corporation was launched in its sea of water. ”

“ The express car stuff is all owned by Wall street, and when we take the contents of a safe, ten thousand or twenty thousand dollars, the directors of the express company sell stock short in Wall street and make a million or so to cover the loss by the bandits of the far west, and pocket the balance. ”

“ An American wishes to turn over his money quickly; a long look into futurity is not for him. He wishes to buy one railway on Monday, another on Tuesday, amalgamate them on Wednesday, and sell out the stock to the public at several millions profit on Thursday, then rake in the boodle on Friday, which proves an unlucky day for the investors. When I truthfully confess it will be a year before I get fairly under way, I am immediately at a discount. ”

“ In fine, the ultimate purpose in this regard of all the promotion machinery of Wall Street—the machinery that has been putting out billions of dollars' worth of securities to investors—is to place stock where it will "stay put," that is, not come out on the open market again to embarrass the interests that are behind the enterprise, and who for a long period are compelled to support the market. ”

“ The Stock Exchange was a boiling and bubbling mass of excited men as I reached it. Pine Street, wet and sloppy, was lined with a mob of umbrellas that sheltered anxious speculators of small degree, and the great building was thronged with the larger dealers—with millionaires and brokers, with men who were on their way to fortune, and those who had been millionaires and now were desperately struggling against the odds of fate as they saw their wealth swept away in the gamblers' whirlpool.
I shouldered my way through the crowd into the buzzing Board-room as the session opened. ”

“ In margin-trading on the New York Stock Exchange, New York Curb, Boston Stock Exchange, Boston Curb, Chicago Board of Trade, Chicago Stock Exchange, New York Cotton Exchange and kindred institutions, experience among stock-brokers proves that if you stick to the game you have only one chance—YOU CAN LOSE.
In railroad, industrial and mining-stock speculation, where you buy the shares outright and hold them for stock market profits, you have two chances; if you are of the average and your operations are for a period continuous—YOU CAN BREAK EVEN IF YOU ARE VERY LUCKY, OR LOSE IF YOU ARE NOT ”

“ It will at once be seen that although the Stock Exchange may be defined as a mere market, the wares that are displayed and dealt in are of such importance as to entitle it to the more ambitious definitions with which it has been exalted. It is worthy of being defined as the mart of the world, because these wares represent property in every part of the world, and because the orders which are executed in this mere market emanate from all over the world. The business of the Stock Exchange is more varied and cosmopolitan than that of any other mart, except, perhaps, the Money Market. ”

“ THE DAY ON ’CHANGE, WITH SUGGESTIONS FOR BEGINNERS The stockbroker’s praises are never sung; if he has good qualities, one seldom hears of them. Doctor Parker once defined the Stock Exchange as the “bottomless pit”: Doctor Johnson said a broker was “a low wretch”; politicians vie one with another in painting him a parasite and a social excrescence. Impatient idealists who would take a short cut to perfection assert that he is of no real economic value, and would enact laws to restrain him. ”

“ As regards some stocks, there will be no need to make a special study of causes which affect the dividend; but this is not the case with railway stocks. A speculator in railway stocks must watch the course of trade, the colonial produce, the Manchester and Liverpool markets, and note the character of the business doing in the great staples of Industry. Upon the profitable nature of these trades depend very much the traffic receipts of railways. ”

“ The values of railway securities, for example, depend upon the management of the companies issuing them, the directors of which may use their power to increase, diminish, or even extinguish them, while they make gains for themselves by operations on the Exchange. They may advance the price of a stock by an unexpected dividend, or depress it by passing an expected one. They may water a stock by issuing new shares, with no proportionate addition to the productive assets of the company, or load it with indebtedness, putting an unexpected lien on the shareholders’ property. ”

“ Meanwhile, the treasures of the Great West offered irresistible attractions to new enterprise and settlement. The demand for more railroads was insistent; then came the devices of stock-watering and overcapitalization as inducements to new capital. Roads were often built entirely on bonds; and stock, having little or no value except for voting, was given away as a bonus with the bonds, or used for various purposes, often in speculation, and such stock frequently found its way back to the original promoters at bargain if not waste-paper prices. ”

“ The speculating public gets action, likes it, and invests money that might have been used in margin-trading on the New York Stock Exchange or for "investment" in the constantly fluctuating low-priced industrials or higher-priced mining stocks that are sponsored by big interests with New York Stock Exchange affiliations. ”

“ When a man goes to a horse-race and plays the favorite, he does exactly what the man does who gives his broker an order to buy Union Pacific for him at current quotations. It is about 6 to 5 against the investment making a profit over current quotations on any given day, although the investor will hardly gain 6 for his 5 if the stock enjoys its highest probable advance. It is about 20 to 1 against the man buying Seyler-Humphrey making money, but he will gain 20 for his one if the mine proves to be a bonanza. However, the rail is an investment and the mining a speculation. ”

“ They sometimes shortened by half the distance to be travelled between two towns. Stock companies were formed to build bridges and grade these turnpikes, and the stock formed a good investment and was also vastly used in speculation. ”

“ Tens of thousands of people who for years had been imbibing the daily financial chronicles of the newspapers, but whose incomes were not sufficient to permit them to indulge in stock-market speculation in rails and industrials, found in cheap mining stocks the thing they were looking for—an opportunity for those with limited capital to give full play to their gambling, or speculative, instinct. ”

“ There are a number of express companies in this country. The express business of the country, however, is controlled by six companies—the “Big Six.”
6. The express transportation (land) is wholly by railroads. The railroad companies, and men owning large or controlling interest in railroads, own a large majority of the “Big Six” stock capitalization.
7. For most of the express company stock owned by railroads, no cash consideration whatsoever was given. For the stock, a railroad company gave to some express company a monopoly of the express business on its line or system of lines of road. ”

“ This is an effectual demand, for the increased price of railway stock enables those who wish it to borrow more upon it. The common practice is to lend a certain portion of the market value of such securities, and, if that value increases, the amount of the usual loan to be obtained on them increases too. ”

“ Even the gray-haired wizards of Wall Street who had preached caution for two or three years, finally fell into line with the new order of things, and not only did they plunge into the market long after it had passed the point of safety, but they organized more investment trusts running into billions of dollars, and advertised far and wide for the public to buy their stock and join them in amassing fortunes. They would manage everything, and all the people had to do was to furnish the money. ”

“ It is so whether the purchases or sales are by investors or speculators, for speculation on the Stock Exchange is not gambling. Whether stocks, or bonds, are bought, or sold, by investors or speculators is immaterial between the contracting brokers on the floor of the Exchange. They know no difference whatever. Delivery of the stocks or bonds is made by the one, and received by the other, in every case, and payments made accordingly, at the sale and purchase prices, investment and speculative transactions being treated exactly alike. ”

“ For the money it receives it will issue securities, upon incorporation and legal organization, almost invariably in the form of capital stock and of mortgage-bonds. The stock will probably be held by the men who wish to control the construction and the operation of the line ”

“ The many thousands of brokerage offices throughout the country were jammed to the doors by eager onlookers and participants who devoted themselves exclusively to the market from the opening to the close. Office boys, elevator men, manicures, hotel waiters, hairdressers, cab drivers, and even rural farmers initiated themselves into the game and discussed mergers, split-ups, stock dividends, and all such subjects in high finance with more profuseness and profundity than was ever displayed at a bankers’ convention. ”