, 1885-03-19
STOCK POOLS.
HOW THEY ARE FORMED AND HOW
WORKED.


EletropOl IN Pioneer ffc%tI
A Wall street broker has been telling me
how pools are operated. The first step is to
make the agreement and secure the cash.
Ten men, say, agree to put up 81, 0O0.0 900 to
advance the price OF Northwestern. They
buy n block a a starter, and then begin TO
manipulate for higher prices They talk the
stock up, work the Wall street news agen-
cies Tor all they are worth, FIRE out most
favorable financial exhibits Of the prospect
OF the company, and toll every broker and
operator they meet that the stock Is worth
much more than II is selling for. The
praises Of the security are reiterated far and
near. In Wall street, as everywhere else,
reiterstion has a tremendous effect A story
Of Northwest's prosperity told on Monday
may have little or no effect but told every
day in the week thereafter Is accepted as
gospel truth on Saturday. The pool hopes,
therefore, by buying and by lying to get the
entire street TO buy, and thus advance the
price. When II has gone up a long way the
pool sells It's holdings and divides the proflta
But a thousand obstacles nave been in the
way. and the profits nave been small
First, the pool has not been kept secret 1t
was not a blind pool but the more common.
ordinary Wall street pool Every member
OF it has told his Intimate friends all about
its plans, and the nows gets around very soon.
inc 1tttt uoklu1 10 pIout " tho AhAofAuu
tion that an attempt Is being made 10 hoist
North western Men try a little bit OF IL to-
day and SSH out tomorrow. When they sell
the pool has to take the stock. The boars
lear Of 1t. and knowing that nothing Is more
certain than that the pool must liquidate
some time, sell the stock after tho rise has
been somewhat accomplished. Moreover. the
greatest danger is from the member of the
pool selling out on the pool While the pool
stock l. being bought the chances arc that
each member Of the pool Is buying as much
more on his own hook This stock he intends
to sell just before the pool sells. II no can do
that, he reasons. he will ave assured him
self OF a fair profit. and II the profits OF the
pool are nothing he will still be ahead. 50
be sells bis own stock at high prices, and the
pool has 10 buy it to sustain the price.
Mr.. Jay Gould can propably sell out to a
pool n little quicker and to a little better
advantage than any Of the capitalists Of the
day. He encourages pools in those days, for
he l. a bull ON the market, and he always
goes into a pool when asked to, for the
advance in any one stock helps advance the
others But Mr.. Gould Is all the time look
ing out for his own precious interests, and
1t Is gravely limited that he sells out to the
pool before the pool Is fairly organized.
Thus the pool as a rule has a hard time Of 1t,
and pool profits are usually small. There
have been very successful stock manipula-
lions, like the lackawanna pool, that was
run throughout the year 1884 by $. v.
White, which, according to all trustworthy
imports, made a fortune for White and a
very handsome profit for the other members
There has been, too, some money made by
tue Pacific Mall pool, although 1t has not yet
liquidated; but these two are the only pools
that have attained any measure of success
in tie last year and a half or W years. II
has been a falling market, and the pools
have had natural causes which tended
toward depression to contend with, in addi-
ton to the usual obstacles.