$112 to $149 (Sharp 166). This increase caused people to sell the stock short (to sell it hoping it will go down before you buy it), but J.P. Morgan had unexpectedly created a corner in the market and within hours the stock price had soared from $149 a share to $1,000. Since Harriman had sold short, he was now in debt $800 for every share he owned (Sharp 166). There were big rivalries between other giants as well, showing how the market could be swayed so severely simply to fit ones needs. There were many similar struggles between men like Morgan and Carnegie for control of the steel business (Sharp 168). There have been too many battles over small railroads to count. All this led to one thing. In the late 1800's and early 1900's, the stock market was easily swayed, and cut-throat business was a way of life. Today we have laws against monopolies, market cornering, and other violations which greatly influenced the market. However, it was not truly recognized that stricter laws were needed until the crash of 1929 (Blume 29). The free public market had become too free and out of control. Investing geniuses saw the evident crash coming, but they were powerless to stop it. The brokerage business ended up being more of a free market where the good brokers could charge a higher commission and the less successful brokers would be paid a lower one (Blume 24). A few brokerage firms had an idea that would change the market, but not for the better. They decided to allow their investors to pay for only ten percent of the actual amount of stock they bought. Since many people could not afford to buy stock at its face value, the firm would put up ninety percent of the money, leaving the investors to pay a mere ten percent (Simonson). This set investors up for huge gains, because if the stock went up ten percent, the money the investor had put into the company doubled. There is a flip side to this money making wonder though. What happens if the stock...
