A-WALL STREET INCIDENT

Otago Witness, Issue 2685, 30 August 1905, Page 13

A-WALL STREET INCIDENT

An interesting account is given in the July Chambers's Journal of some ups and downs of Wall street. Among the speculators mentioned is Addison G. Jerome, who entered Walt street as an operator in 1863, after being a merchant in the dry goods trade. He" was successful in ■everything he undertook until he bulled Michioan Southern, and, with a clique that he formed, bought control of it. He put it to high figures, and was sure of his position. But Henry Keen, the treasurer of the company, and a keen operator m stocks, stepped in and turned Jerome's success into utter and disastrous failure. Henry Keep knew something that Jerome was unaware of—namely, that a clause in the Michigan Southern's charter permitted its directors to increase its capital stock. So Keep called a secret meeting of the board, and an increase of 14,000 shares was voted. Then with this increase for future delivery he sold the stock against it and borrowed to make his deliveries, which made Jerome think Keep was largely short of Michigan Southern. He and his clique therefore kept on buying and advancing the price, while Keep kept on selling more and more. Itic final result was that Jerome called in all his loans of the stock so as Lo force the shorts to cover, and to that Keep responded by delivering the 14,000 shares of new stock, which caused a fall of 20 _per cent, m Michigan Southern in one day. This involved the loss of nearly all the three millions of money Jerome had so quickly made. He took the loss of fortune much to heart, and died the following year » virtually ruined man.