Predictions: It is the most effectual "corner" that the Street has seen
for years, and it is predicted that many people will come to grief as a
result of it. It was pointed to as certainly anomalous, to say the
least, that while men were losing fortunes on the long side of the
general market others were losing vast sums on the short side of
Who these Northern Pacific losers are is only a matter
of conjecture, but rumor is busy with many names. John
W. Gates is credited with being short no less than
60,000 shares of the stock 50 points below the close of
last night, while a number of Western " plungers" are
also declared to be rather heavily involved. Mr. Gates
smiles when asked about these stories, and declares that
he is not short of the stock, and in fact, was never
short a share of stock in his life, except some Sugar,
which he was glad to cover without profit. In the
meantime, however, he has postponed his European trip.
Isidor Wormser, also credited with being short of the
stock, was seen by a New York Times reporter yesterday.
"They say you are heavily short, Mr. Wormser," ventured
the reporter. "Oh, do they? You don't mean to say so!"
was the answer. And then, as he turned to go away, "I
have nothing to say."
As for the stories of fortunes made, they are many. According to one
report, ex-President Cleveland through a "tip" from Mr. Lamont, had
rounded out a cool half million of dollars, while other of Mr. Lamont's
friends had also done well. If this is so, it does not agree with the
report that the Hill people had sold their stock, for Mr. Lamont is very
close to Mr. Hill. However, all this is more or less gossip and cannot
be verified. One certain gainer is known. He is John Manning, a
well-known broker on the floor, who sold the 2,000 shares of stock
yesterday at 180-sold it short, at that-and in less than a minute had
bought it back at 160, a clear gain of $20,000.
The amount of money lost by the short side in the stock
is variously estimated at from $40,000,000 to
$75,000,000. As for actual figures, these will not be
obtainable for some time, if ever. Mr. Keene is credited
with having enriched himself to the extent of $3,000,000
by the corner. To what extent the syndicate have
profited nobody ventures an opinion. Some idea of the
added worth of the shares may be gained when it is
pointed out that they have enhanced just $50 per share
since last Saturday. At a conservative
estimate 600,000 shares have been traded in the first
three days of this week, so that with an increase of $50
per share the long side of the market finished business
yesterday about $30,000,000 richer than on Saturday.
Great Fight For Control
As for the talk telling of a great fight for control of
the stock between the Morgan-Hill interests on the one
side and the Harriman-Kuhn-Loeb-Standard Oil people on
the other, nothing definite can be learned. In some
parts of the Street the talk of a fight and of a great
clash between these powerful interests is credited. In
other parts it is ridiculed. One story has it that over
100,000 shares more than the actual capital stock of the
company have been bought by the opposing syndicates, and
that it is as yet uncertain where control lies.
In this connection a Wall Street news bulletin
yesterday published the following as "on authority." "
The Northern Pacific situation is this: The Morgan Hill
interest some time ago sold a considerable amount of
stock. The Harriman syndicate gradually acquired a very
large amount of stock, nearly, if not quite, control.
Notice was given that this stock had been bought not for
war, but to promote harmony. The Morgan-Hill interests
did not accept the proposition, but immediately began to
buy and have bought in the last few days a very large
amount of stock.
"The two interests, Hill-Morgan on one side and
Harriman syndicate on the other, have bought more than
100,000 shares more Northern Pacific than there is in
existence. It is impossible to tell with certainty which
interest has control until it is known which party gets
most certificates, and which gets most of settlement of
contracts. Obviously one has voting power and one has
"Pending developments, stock is being loaned to
legitimate borrowers and assurances are given that the
books will not be closed immediately, giving time for
arbitrage dealers to adjust their balances. Large
arbitrage settlements have been made in London, which
will materially reduce the borrowing demand from that
This, however, is altogether in conflict with the
statement of Robert Bacon, a partner of J. Pierpont
Morgan, who to a reporter of The New York Times said
yesterday: "The Hill-Morgan interests in Northern
Pacific are intact." Mr. Hill himself, seen coming out
of J. P. Morgan & Co's office at half past 1 o'clock
yesterday, and asked about Northern Pacific, replied: "
I have not bought a share of Northern Pacific in six
Asked as to the reported differences between the
Harriman syndicate and the Morgan-Hill interests, he
said: "That has been magnified a thousand times." On the
same subject a partner in the firm of Kuhn, Loeb & Co.
said: "It would not be wise to make any statement today
because not tending to promote the securing of that
harmony which we all desire." Asked whether this meant
that there actually was a fight on the gentleman in
question merely laughed. James R. Keene, who is credited
with having engineered the "corner," is the Street
declares, "sawing wood and saying nothing."
Appeal To Mr. Morgan
However, whatever the situation, several conferences
were held yesterday and late last night, attended by Mr.
Hill, Mr. Harriman, James Stillman, Vice President
Lamont of Northern Pacific, and several other gentlemen.
What transpired was not disclosed. It is said that Mr.
Morgan, now abroad, has been appealed to settle all
matters in dispute, and that a reply from him in answer
to a cablegram sent last night is expected at any time.
As to what will happen to the stock today that is only
a matter for conjecture. Brokers sum the situation up
thus: "Either the shorts will fail on it, or they will
be given the stock by those who have cornered it."
Coming now to the general market, which broke so badly
in the face of this great rise in Northern Pacific, it
may be said that in large measure this very "corner" was
responsible for the break. It showed, first, that in
some respects, at least, certain of the advances in
prices had been brought about artificially and without
regard to real values. But, above and beyond this,
particularly when the stories of a conflict between
leading financial interests became so persistent, it led
to many reports that certain, far-reaching consolidation
schemes planned and planning would never be carried
through. Specifically it may be said that it was
declared with some positive ness that the Burlington
deal was among those that would never be completed,
principally because of the Northern Pacific development.
From Burlington the story of "clashes" spread to other
railways-to St. Paul, to Missouri Pacific and so on all
through the list. Then, again, it was declared that some
of the larger financiers were "selling out" on one
another. And so the disturbing rumors went on, while the
uneasiness was added to by a sharp rise in call money
rates, at one time to 20 per cent. Where it closed, and
by the announcement of an engagement of gold for export.
London also was reported to have received the "cue" to
sell, and this in a measure was borne out by the much
lower prices sent over by London at the opening here,
all the international stocks being down anywhere from
one to ten points, the big drop being, strangely enough,
in Northern Pacific.
But, as already pointed out, in the early trading Wall
Street operators gave little heed to any of these
disturbing reports or to the lower figures. Instead they
went gaily in and bid the general market up from one to
five points, Union Pacific leading always excepting
Northern Pacific. Burlington, however, lagged, but not
Erie, the latter being understood to be in the
Burlington deal. Soon Burlington developed actual
weakness: but still the market held. Then Erie began to
fall off, and then the rout of the bulls began. They ran
slowly at first, but as the decline grew greater they
ran faster, and thus accelerated their own downfall. In
the end they were in full flight and throwing over their
stocks, though the nature of the purchases suggested
that some of the stronger people were buying at the
Fluctuations In Prices
Prices broke and rose frequently a point and two points
at a time. An extreme case was where one sale of
Brooklyn Rapid Transit was made at 73 and the next at
77-a clear gain of 4 full points. So great, indeed, was
the rush to sell that in the last hour the total
transactions for a single hour probably established a
new record. It is a fact that the tape did not "tick
off" the last transaction until 3:16 o'clock, being a
full sixteen minutes behind. Not only that, but then
came the Government bond sales, which usually are
printed at 2:15 o'clock, but which yesterday were
absolutely ignored until after the market's close. The
last transaction in them was not recorded until 3:25
What Brokers Say
What some representative Stock Exchange brokers think
of the market will appear from these expressions of
opinion. S. V. White- What do I think? Why, what is
there to think? The Northern Pacific "corner" has killed
the market, has sickened it unto death.
Bayard Dominick of Dominick & Dominick-. This market
was the result of over-speculation. Men, women, and
children have had more on their hands than they could
take care of, and the sequence was natural. It was not
unexpected by brokers with any experience in Wall
Street. The market has had a splendid decline, and the
atmosphere has been greatly cleared. A revival will come
after the belated liquidation is over.
H. H. Hollister of Hollister & Babcock- "The Street
feels that there is a battle of giants for the Northern
Pacific, and that if either side got it the Burlington
deal would be jeopardized. That is the reason for the
nervousness. At the same time today there was a kind of
bargain counter here for people who had the money to
avail themselves of a good opportunity.
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