The order was given. It was a very ordinary precaution, for there is
hardly a stock on the list that would not be raided by professionals if
supporting orders were not known to be in the market. As Saturday is
only a short two hours' session, I really fell in with the idea.
Retiring late that night, I left a call for 11 A.M. Next morning at
about 10:45 I was awakened by my valet. He said Nat. C. Goodwin wanted
me on the long distance. Mr. Goodwin was in Cincinnati, where he was
playing a week's engagement.
"Hello," said Mr. Goodwin. "Did they get you? Shall I wire the
Knickerbocker Trust Company to pay you $25,000 to support the market?
Reported here they have you in a hole."
"What's up?" I inquired.
"Why, brokers here say the stock broke to 60 cents on the Curb soon
after the opening," he said. This was news to me.
"I do not need more money," I answered. "I have been asleep. Our
brokers have been on the job. I will see what is doing and let you know
in a little while. Don't worry." And I rang off.
I 'phoned our brokers and they reported that they had bought 5,000
shares of stock at $1.35 at the opening and had withdrawn support. "Too
much stock was pressing for sale," they said.
"This is hell. You should not have permitted the market to break that
way. Support the stock!" I said. "Buy 7,500 shares at the market!"
In a few moments this firm of brokers reported that they had rallied
the market to $1.16. The recovery was only temporary, however. Another
drive broke the stock to 60 cents.
Our brokers had bought 7,000 shares at from $1 to $1.16 and then
stopped. The member of their firm who had been handling our orders
throughout this campaign said the purchase of this fresh block of stock
exhausted our cash balance on deposit with his firm. They had a number
of drafts out for collection, attached to stocks sold to Western
brokers, that had not yet been credited to us. There was also a big
block of Coalition stock due us from them. This was the stock they had
bought on our supporting orders. They refused, however, to consider
either the drafts or the stocks as a credit.
We had cash on deposit and credit with a number of other brokers. I
promptly telephoned several of them to buy large blocks of the stock at
a limit of 95 cents. This was 35 points above the quotation that was
given me. Not a single share was reported bought on these orders.
I jumped into a taxi and rode to the office of the brokers who had been
handling our orders.
The situation was critical. I realized fully that a sharp break of this
character in the market price of a stock that had been so widely
exploited must prove shocking to investors. I feared that public
confidence would be shattered completely.
"This is an outrage!" I protested. "Buy 5,000 shares at 95!" I tendered
five $1,000-bills as payment in advance.
Public-domain text, read in full here on John Shaqi.
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