Savannah morning news. [volume] (Savannah) 1868-1887, 1884-07-13
SHARP TALK on WALL STREET
BlackwOOd's Magazine on the Free
BooteEs of American Finance


B1ackwOod's Magazine on the Gree
BooteEs of American Finance"
The July number of Bldcktgo0d'S Maga.
cine Will contain a fOrcible artic le on
''The FreeboOters of american Finance"
In it some Of our great operators and
'philanthrOpistsn are handled wit hOut
gloves. These paragraphs are taken from
advance sheets of the magazine:
Neither DR.. Talmage nor Henry Ward
Beecher has yet succeeded, believe, in
framing a new decalogue for America. but
that event cannot be far distant. =
The Americans regard the accidents and
miSfOrtuneS of commercial life from q
different standpoint to ours. In describ-
ing matters where old-fashioned morality
still presumes to intrude on the liberty
and license of financial enterprise, they
use a Technology which has been mOdi-
fed to suit their special wants. y
In Wall street and at the Produce EX-
change-nay, even at the more primitive
centres of speculation in oil-people are
far more polite to each other. Operators
in these refined regions may come TO
grief, or they may have to Gle down on
their contracts but they never commit
what in the old country we call acts of
bankruptcy. They may 'rehypothecate'
securities which they hold in pledge, but
they would be shocked at the suggestion
of ENLIGHTENMENT. DIR. Talmage, who is
prominently the high priest of trans
atlantic civilization, brought out the dis
tinctive feature of its morality very
lucidly-in fact, he made an important
contribution to the Wall street decalOgue
of the future-when he observed in his
sermon on the failure of the Marine
National Bank: Our sympathies should
be given for the financial sufferers. We
have heard only one side of the story.
The word mistake will often cover
what the world calls a swindie."
s'In what other country need one look
for rOguery so cleverly disguised as in
the following advertisement, cut from a
New York paper not three weeks old?
NOR SALE-DEFAULTED RAILWAY
II BONDS and Marine Bank stock. suitable
for assets, cheap. Address -.
''The reader may ask in bewIlderment,
What on earth could any one want to
buy ssassets'' forY A New York trader
who had come to grief after the panic
would catch ON to the idea at once. He
has got to meet his creditors, and posi-
bly-very probably, in fact-he is not
able to submit to them a statement of his
affairs which is at all likely to satisfy
them. His trouble is that he has no
assets worth speaking of, and that his
losses cannot be readily accounted for.
may supply himself, at the cost of a few
dollars apiece, with shares in some insol-
vent bank, or defaulted bonds of some
wild cat railway. Thus provided, he has
only to appeal to the sympathy of his
creditors a an unfortunate investor who,
for years back, has been putting all his
hard-earned savings into these worthless
stocks before you, gentlemen
"TO have been the legal owner of two
or MI TO To oil
a halt for want Of a few hundred dollars,
is an antitheticaL experience to be looked
for only in America. But there are
financial freebooters to whom even two
millions sterling are a'teabite. In one of
the early scares in Wall street Mr.. Gould
caused some fun by the alacrity with
which he turned out the contents of his
strong box in order to disprove the re-
port that he had been pledging them to
raise money. The aggregate value of the
securities exhibited, taken at the current
prices of the day, was fully 5000, 200, 900.
If Mr.. Gould had held on to them all
through the subsequent decline they
would by this time, to use an expressive
phrase of his own, have been scaled
down to thirty, or at most forty, mil
lions. But it is not probable that Mr..
Gould did hold on.
NLittle wonder that Mr.. Gould should
find it easier to make millions Of dollars
than other men do to earn bread and
cheese. The mystery is, that he should
still find fools to play with him. Whether
gambling be repfessible or not-mOst
likely it is not-so long as it continues 1t
should be made as nearly square as posi-
bic. But it cannot be square without
neutral stakeholder, and that is what gam
blers can seldom or never have who risk
their money in Wall street: The finan-
cial freebooters whom they pIav against
control the stakes in having the manage
ment OF the property gambled in. They
can pay unearned dividends, and they
can plumber or waste in hundred differ
ent ways dividends which have been
earned. They can publish traffic state
ments when they are good and withhold
them when they are bad. They can
stfangling 1t with Improbable leases or
guarantees; they can make bad property
look good by temporarily turning traffic
on to it which they can turn off again at
their own pleasure. 1t is not merely the
control of the property that gives them a
fraudulent advantage, but they may also
command the bulk of the securities dealt
in. Some of the Gould lines, for instance,
are represented here by few million dol
lars worth of shares out of thirty or forty
millions in existence. The other twenty
five or thirtY-fve millions, as the case
may be, is probably pledged with some
bank in New York, or planted among
few of the insiders whom Mr.. Gould
uses as cOnfederates. They can make
the stocks scarce or plentiful just as they
please. If they are engineering a fall
they spread bad reports, encourage sell
ing, and lend out the stock freely to
bears. At a preconcerted moment they
deny the bad reports and call in the Dor
rowed stock, when the bears get their
necks twisted. If the game be to force
rise,' they spread good reports, lock up
the stock, and give an impression of
scarcity, till the favorable moment comes
for letting it loose on the heads of the
frightened bulls.
"Another class of financial freebooter
who has been making things lively in
Wall street is the organizer of svndicates
to build competing railways. Several Of
these have come to grief OF late, and it is
doubtful if they do not deserve less SYM
pathy than Mr.. Gould himself.
The evil that stock manipulation does
dies with him, but a competing railway
for which there is no room lives, in
fashion, forever. The harm 1t
does to itself is a trife compared with the
mischief done to pre-eXisting lines whose
business it filches from them.
Not only is the property itself harmed,
but all railway property in America is
dlscredlted through 1t. British investors
should have this peculiar risk Of Ameri-
can railways made clear to them, and as
far as possible they should know the men
who are specially responsible for it.
s'What with rate wars, thimble-rigging
in Wall street, corruption from top to
bottom in their administration, threatened
dictation and interference by every
State Legislature, and mania for the
building of competing lines, which are
not needed, and are never meant to pay,
the future of American railways is faT
from brilliant. 1t would be difficult to
imagine securities less enticing for quiet,
unamDitious investors"
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