GAMBLING IN "PIG."

Otago Witness, Issue 2400, 1 March 1900, Page 59

GAMBLING IN "PIG."

THE FAVOURITE OCCUPATION OF

"BULLS" AND "BEARS."

The name of Monte Carlo has a reckless, ruinous sound for many, but it will be news to tihe happy, because innocent, majority to be informed that there are in England, and all civilised countries Avith large masses of Avarehoused materials in everyday demand, facilities for gambling of a worse kind than that of the Riviera.

On the different markets in iron, tin, copper, spelter, Avheat, etc., you may have "terrible times, and in a week end Avith a liability Avhich will take Aveary and humiliating years to liquidate.

The Glasgow Warrant Market is the head and front of the iron gamble. There tens of thousands of tons of iron — Scotch, Middlesbrough, and hematite — are accumulated in the different stores of Connal, in Glasgow, and BarroAV-in-Furness. In slack times makers of iron turn out more iron than they can sell, and the surplus goes into the store. When trade improves, and the furnaces cannot make iron fast enough to meet the demand, out it comes from these stores. This is simple enough ; but where the gamble comes in is in the traffic of the paper slips, or Avarrants, for 500 tons, and multiples of 500 tons, bought and sold at one month's date. If you belieA r e the price of iron Avill rise, you buy warrants ; in the contrary case, you sell.

On the face of it there seems no particular risk. It seems easy to take professional opinion whether trade is improving or failing, and to operate accordingly. But what ihe novice at the game does not take into account is the professional party of local operators — " bulls " and " bears " — who, as commission brokers, do the buying and selling for outsiders, and, as capitalists, can combine and make prices pretty much what they please for a short time.

In January, 1899, Scotch warrant stood at 50s a ton ; in July at 755. Throughout those six months the rise was constant, with short set-backs, due to profit-taking and holiday lulls. At no time was there a drop of as much as 2s a ton from the highest price reached. The situation had allured scores of outsiders to buy, in the ' hope that this charming state of things j would continue, and to hold the iron they had already bought, that they might continue month after month receiving nice cheques for their differences. And then, in four days, prices were knocked down from 75s to 665, and panic ensued': There was no trade reason for this. At home, abroad, and especially in America, puddlers could not puddle iron fast enough. - The holiday season was coming on, and speculators anxious to gc away closed their accounts. This depressed prices, and gave the " bears" their chance. And they used this so well that the " slump " developed into a panic, and iron fell as much as 2s 6d in a day. These shocks are meat and drink to the "bears." Even with no solid reason for lower values, thej can generally be worked to great advantage, until an impetus in -the c contrary direction frightens them, when they rush to covei , and the " bulls " have a turn. In April, 1899, the "bulls" had one Brilliant week. Then, on rumours e£ a combine in London to buy up all the Scotch iron warrants, and form a corner,

the price rose 4s in about a week. At least one great house of " bear brokers in Glasgow was wrecked by this particular move. But it brought happiness of a sort to the small outside punting public. The outside public is safely reckoned up by the professionals as a certain fool, to be bled sooner or later. The fascination of warrant-gambling is as notorious as that of drink. The last great blow to speculators in this market was in 1889. In the autumn of that year, without good reason, prices went up by leaps and bounds. Trade was nothing more than fair, but the public saw iron being pushed up by the shilling a week, and could not keep its fingers o\it of the lire, iuany a family in the iron districts of the Midlands ana the North dates its destitution from the 1889 gamble. The vicissitudes of speculators in pigiron are as wild, and often end as tragically, as those of any other gamblers. We know a long-headed man who bought 4000 tons of iron last April — the day before the great rise began. He closed the account on the following Thursday £800 to the good. He, in his wisdom, was satisfied. Others we know who gambled all through the year, enduring infinite agitation and many broken nights. At one time they also were hundreds of puunds- to the good.- But August wrecked their finances and their nerve?. They are still at it, however, making tens and twenties of pounds, and losing fifties and hundreds. They take all the risk, and the brokers, as usual, are almost the only ones who keep the profits. A wealthy ironmaster of our acquaintance in 188*9 could not; resist the temptation to double his riches. He bought tens of thousands of tons of this warrant "pig." But he happened to come in at the top of the boom, which went all to pieces with the New Year. By February the ironmaster had shot himself.

On the other hand, a humbler desperado risked the £2000 only which he proposed to give Avith his daughter in marriage. He doubled that, and withdrew. His daughter's husband talks admiringly of his father-in-law's pluck and luck. He might more sensibly talk of his madness. Another man — this time in Staffordshire — made several thousands on warrants, and was so delighted with himself that he gave a great dinner to his friends. But hardly was the dinner paid for, when he had lost all his gains, and a good dea 1 more. Tin and copper also spread their nets for the unwary during 1899 with tremendous effect. The American combination in copper has for tne time frightened even professional operators ; but when this breaks — as it seems bound to do with increased production in parts of the world winch it cannot control — then copper aleo Avill ~o with a bang, more or less sharp, from £75 to £55, or so, per ton. Woe betide the "bull" who is caught in that squeeze ! This metal is also dealt in in warrants, the minimum quantity of tons thus sold being 25. Tin has had the most sensational time of the three metals. In February, 1899, it stood at about £100 ; on September 28 at £150 ; on November 15, £120. This metal and copper are sold on the London Metal Exchange in warrants at three months' elate — that is to say, the speculator has thrice as much time as with iron warrants in which to make up his mind what to do. The tin warrants are for as small an amount as five tons. Yet a " bear "on tin for even five tons on September 28 would have netted £150 by November 15 ; and the obstinate and sanguine " bull " who bought in Septembei would, of course, ha.ye lost as much.

Tin more than any metal is dangerous for the outsider to speculate in. The stocks of it are so small that the big dealers can lift or depress prices at pleasure. It was well known that they kept them high in the summer and autumn to suit their own convenience, and by-and-bye withdrew their support to let them drop. It is just this useful knowledge, however, that the novice does riot, as a rule, possess.