68 SOME PHASES OF SHORT SELLING. 



By selling the growing crop short the market wrecker is continually proclaiming 

 that it will be so great as to swamp llie markets of the world, and by persistently pursu- 

 ing this course he is often able to make both producer and consumer believe that such is 

 the case. 



Prices are never as low as the market-wrecl^er says they should be, and the lower 

 they get, with profits in h::ud, the harder th<-y pound them with limitless otters. 



In selling short a product which ha:8 cost neither money nor effort, the market- 

 wrecker requires liL*le besides audacity, lung power and an imagination which can evoke 

 enormous crops and commercial disaster at will. Such is his entire capital and stock in 

 trade, and yet so enormous is the volume of these transactions in fictions that immense 

 sums — in the aggregate— are constantly tied up in margins; sums probably several times 

 as great as would be required to handle all the actual grain seeking a market, and in this 

 way is a needless tax levied upon the industries of the country and a fictitious scarcity of 

 money brought about, such scarcity tending, at all times, to still further depress prices 

 for real products. 



The reductions iu the price of products which the operations of the market-wrecker 

 eflfect are doubtless such as to absorb a very large proportion of the ordinary profits of 

 production thus greatly lessening the purchasing power of the farmer and this, by reae- . 

 tion, directly affects the prosperity of all employed in distribution, or other forms of 

 production, hence the entire community suffers from the evil of short-selling. 



When wheat is selling at $1 the short-seller goes upon the market and offers it for 

 delivery one to six months in the future for 95 cents, and can only secure a profit by 

 breaking tlie price, and iu order to do this resorts to the fabrication of such falsehoods as 

 his experience leads him to believe will effect the end desired. He relies upon such fab- 

 rications, not the offering of actual products, to reduce the price to a level that will permit 

 his winniug the wager. 



Frequently the big bears cry the market down by persistent offerings of immense 

 quantities while their brokers, upon the other side of the pit, are taking all that them- 

 selves and other parties offer, so that even should the market happen to advance they 

 cannot lose while they are thus enabled to cover outstanding short sales at a profit on that 

 bought from others at the price they have established by their "wash sales," as is shown 

 in the following telegrams from a broker to his principal at Kansas City: 



"Chicago, June 4th, 1891.— J. S. & Co., Kansas City: Ribs ninety, lard twenty- 

 five, pork fifty, easy. Bears hammering but buying through brokers. Roberts." 



From and to same parties on the same day: 



"MarUet steady now; bears doing everything to break market; weakness of corn 

 helping them. Robkrts." 



Destroy the profits of short-selling by placing a suflficient tax upon every such 

 transaction and every incentive to force a decline would disappear, and when such 

 incentive disappears prices will be aftected only by the volume of real products offer- 

 ing, and supply and demand will once more determine iu which direction values shall 

 move, and every dealer being an owner will have a direct interest in sustaining prices, 

 whereas the great majority of the so-called dealers are now interested iu depressing prices, 

 as their entire profits are derived from short-selling. 



All Board of Trade speculators derive tneir support from the unjust tolls which 

 short-selling enables them to levy upon the farmer and as they are, like other ganiblers, 

 reckless spendthrifts and most extravagant livers and number, with their alljliated 

 hordes, at least 20,000; and assuming that tliolr annual expenditures are no more than 

 $5,000 each, it follows that these worse than u.selcss parasites yearly mulct the farmers of 

 the country in the sum of iflOO, 000. 000. What is worse than this they act as a magnet 

 that draws many of the brightest youths into this whirlpool, and most of the embezzle- 

 ments of bank presidents, casliiers, clerls and tellers, as well as tho:-e of the empli>yes of 

 commercial houses, are due and directly traceable to the craze for speculative gambling 

 that has its birthplace and habitat upou the Board of Trade. 



Add but ten per cent, to the value of the products of the farm by destroying short- 

 selling and the farmer would not only be able to pay his debts, but those of the Nation, 

 State and Municipality. 



