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.And it stood there because JimBarnes and his associates had to keep it there because then bank had loaned them thirty-five dollars a share on one hundred thousand shares.If the bank ever tried to liquidatethat loan there was no telling what the price would break to.The public that had beeneager to buy it at 50, now didn't care for it at 37, and probably wouldn't want it at 27.- 231 - Reminiscences of a Stock OperatorAs time went on the banks' excesses in the matter of extensions of credits made peoplethink.The day of the boy banker was over.The banking business appeared to be on theragged edge of suddenly relapsing into conservatism.Intimate friends were now askedto pay off loans, for all the world as though they had never played golf with thepresident.There was no need to threaten on the lender's part or to plead for more time on theborrower's.The situation was highly uncomfortable for both.The bank, for example,with which my friend Jim Barnes did business, was still kindly disposed.But it was acase of "For heaven's sake take up that loan or we'll all be in a dickens of a mess!"The character of the mess and its explosive possibilities were enough to make JimBarnes come to me to ask me to sell the one hundred thousand shares for enough to payoff the bank's three-million-five-hundred-thousand-dollar loan.Jim did not now expectto make a profit on that stock.If the syndicate only made a small loss on it they wouldbe more than grateful.It seemed a hopeless task.The general market was neither active nor strong, though attimes there were rallies, when everybody perked up and tried to believe the bull swingwas about to resume.The answer I gave Barnes was that I'd look into the matter and let him know under whatconditions I'd undertake the work.Well, I did look into it.I didn't analyse the company'slast annual report.My studies were confined to the stock-market phases of the problem.I was not going to tout the stock for a rise on its earnings or its prospects, but to disposeof that block in the open market.All I considered was what should, could or might helpor hinder me in that task.I discovered for one thing that there was too much stock held by too few people that is,too much for safety and far too much for comfort.Clifton P.Kane & Co., bankers andbrokers, members of the New York Stock Exchange, were carrying seventy thousandshares.They were intimate friends of Barnes and had been influential in effecting theconsolidation, as they had made a specialty of stove stocks for years.Their customershad been let into the good thing.Ex-Senator Samuel Gordon, who was the specialpartner in his nephews' firm, Gordon Bros., was the owner of a second block of seventythousand shares; and the famous Joshua Wolff had sixty thousand shares.This made atotal of two hundred thousand shares of Consolidated Stove held by this handful of- 232 - Reminiscences of a Stock Operatorveteran Wall Street professionals.They did not need any kind person to tell them whento sell their stock.If I did anything in the manipulating line calculated to bring in publicbuying that is to say, if I made the stock strong and active I could see Kane and Gordonand Wolff unloading, and not in homeopathic doses either.The vision of their twohundred thousand shares Niagaraing into the market was not exactly entrancing.Don'tforget that the cream was off the bull movement and that no overwhelming demand wasgoing to be manufactured by my operations, however skilfully conducted they might be.Jim Barnes had no illusions about the job he was modestly sidestepping in my favour.He had given me a waterlogged stock to sell on a bull market that was about to breatheits last.Of course there was no talk in the newspapers about the ending of the bullmarket, but I knew it, and Jim Barnes knew it, and you bet the bank knew it.Still, I had given Jim my word, so I sent for Kane, Gordon and Wolff.Their twohundred thousand shares was the sword of Damocles.I thought I'd like to substitute asteel chain for the hair.The easiest way, it seemed to me, was by some sort ofreciprocity agreement.If they helped me passively by holding off while I sold the bank'sone hundred thousand shares, I would help them actively by trying to make a market: forall of us to unload on.As things were, they couldn't sell one-tenth of their holdingswithout having Consolidated Stove break wide open, and they knew it so well that theyhad never dreamed of trying [ Pobierz całość w formacie PDF ]
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.And it stood there because JimBarnes and his associates had to keep it there because then bank had loaned them thirty-five dollars a share on one hundred thousand shares.If the bank ever tried to liquidatethat loan there was no telling what the price would break to.The public that had beeneager to buy it at 50, now didn't care for it at 37, and probably wouldn't want it at 27.- 231 - Reminiscences of a Stock OperatorAs time went on the banks' excesses in the matter of extensions of credits made peoplethink.The day of the boy banker was over.The banking business appeared to be on theragged edge of suddenly relapsing into conservatism.Intimate friends were now askedto pay off loans, for all the world as though they had never played golf with thepresident.There was no need to threaten on the lender's part or to plead for more time on theborrower's.The situation was highly uncomfortable for both.The bank, for example,with which my friend Jim Barnes did business, was still kindly disposed.But it was acase of "For heaven's sake take up that loan or we'll all be in a dickens of a mess!"The character of the mess and its explosive possibilities were enough to make JimBarnes come to me to ask me to sell the one hundred thousand shares for enough to payoff the bank's three-million-five-hundred-thousand-dollar loan.Jim did not now expectto make a profit on that stock.If the syndicate only made a small loss on it they wouldbe more than grateful.It seemed a hopeless task.The general market was neither active nor strong, though attimes there were rallies, when everybody perked up and tried to believe the bull swingwas about to resume.The answer I gave Barnes was that I'd look into the matter and let him know under whatconditions I'd undertake the work.Well, I did look into it.I didn't analyse the company'slast annual report.My studies were confined to the stock-market phases of the problem.I was not going to tout the stock for a rise on its earnings or its prospects, but to disposeof that block in the open market.All I considered was what should, could or might helpor hinder me in that task.I discovered for one thing that there was too much stock held by too few people that is,too much for safety and far too much for comfort.Clifton P.Kane & Co., bankers andbrokers, members of the New York Stock Exchange, were carrying seventy thousandshares.They were intimate friends of Barnes and had been influential in effecting theconsolidation, as they had made a specialty of stove stocks for years.Their customershad been let into the good thing.Ex-Senator Samuel Gordon, who was the specialpartner in his nephews' firm, Gordon Bros., was the owner of a second block of seventythousand shares; and the famous Joshua Wolff had sixty thousand shares.This made atotal of two hundred thousand shares of Consolidated Stove held by this handful of- 232 - Reminiscences of a Stock Operatorveteran Wall Street professionals.They did not need any kind person to tell them whento sell their stock.If I did anything in the manipulating line calculated to bring in publicbuying that is to say, if I made the stock strong and active I could see Kane and Gordonand Wolff unloading, and not in homeopathic doses either.The vision of their twohundred thousand shares Niagaraing into the market was not exactly entrancing.Don'tforget that the cream was off the bull movement and that no overwhelming demand wasgoing to be manufactured by my operations, however skilfully conducted they might be.Jim Barnes had no illusions about the job he was modestly sidestepping in my favour.He had given me a waterlogged stock to sell on a bull market that was about to breatheits last.Of course there was no talk in the newspapers about the ending of the bullmarket, but I knew it, and Jim Barnes knew it, and you bet the bank knew it.Still, I had given Jim my word, so I sent for Kane, Gordon and Wolff.Their twohundred thousand shares was the sword of Damocles.I thought I'd like to substitute asteel chain for the hair.The easiest way, it seemed to me, was by some sort ofreciprocity agreement.If they helped me passively by holding off while I sold the bank'sone hundred thousand shares, I would help them actively by trying to make a market: forall of us to unload on.As things were, they couldn't sell one-tenth of their holdingswithout having Consolidated Stove break wide open, and they knew it so well that theyhad never dreamed of trying [ Pobierz całość w formacie PDF ]