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the simplest type of association of capitalists formed to control the market of some commodity. The corner seeks to purchase all available supplies in order to resell them at higher prices. Corners are created in the commodity and the stock exchanges; in the latter they purchase all available stocks of some companies for subsequent resale or for acquisition of the controlling interest in a certain company.
Corners were known as early as the 16th and 17th centuries. During the last decade of the 19th century, well-known corners were created by the American railroad “barons” during the struggle with the biggest exchange promoters, or “bears” (in the jargon of the security exchange, bears are businessmen who support the downward tendency of stock and bond prices). Sometimes corners are organized to combat massive sellings on the stock exchange by the bears, who are trying to drive down the price of a company’s stocks.
Because as long as two weeks may pass between the moment the business transaction is contracted and the time the commodity or securities are actually transferred to the buyer, the bears can repurchase the stocks or commodities sold by them and receive a speculative profit from the difference between the buying and selling prices. Corners are formed to prevent the repurchase of the commodity once sold. Since in this case the bears are threatened with bankruptcy and complete ruin, they sometimes are forced to hold up the sale of stocks, which in turn leads to the stabilization of the rates of exchange for the stocks of the company for which the corner is acting.
A. V. GRISHIN