The Rock Island Argus. (Rock Island, Ill.) 1877-1885, 1885-03-13
STOCK POOLS.
HOW THEY ARE FORMED AND HOW
WORKED.
Booming the Stock--Liberai Inducements
to Investors Large Prospects That
Generally Result in Small Pro-
Gts-HOw II Is Operated.


l'-jetrppoi IN Pioneer tfeS-.
A Wall street broker has been telling ire
how pools are operated The first step is to
make the agreement and secure the cash.
Ten men, say, agree to put mp 100000 to
advance the price of Northwestern. They
buy block as q starter, and then begin to
manipulate for higher prices. They talk the
stock up, work the Wall street news agen-
cies for al they are worth, fire out most
favorable financial exhibits Of the prospect
Of the company, and tell every broker and
operator they meet that the stock is worth
much more than it is selling for. The
praises of the security arc reiterated far and
near. In Wall street, as everywhere else,
reiteration 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 it has gone up a long way the
pool sells its holdings and divides the profits
But a Thousand obstacles have been in the
way, and the profits have been small
First, the pool has not been kept secret. 1t
was not blind pool but the more common
Of it has told his intimate friends all about
its plans, and the news gets around very soon
| The street begins to profit by the inforna-
ton that an attempt i being made to hoist
Northwestern. Men try little bit of it to-
day Gnl sell out tomorrow When they sell
the pooI has 70 take the stock The bears
hear Of it. AMI knowing that nothing is mora
certain than that the pool must liquidate
I Ill e 81,
been somewhat accomplished Moreover, the
greatest danger IS from the members of the
pool selling cut on the pool While the pool
stock Is being bought the chances are that
each momber Of the pool is buying as much
more on his own hook This stock he intends
to sell just before the pool soils. IL he can do
that, he reasons, he will have assured him
self of Il fair profit, and if the profits Of the
pool are nothing he viii still be ahead So
be sells his own stock at high prices, and the
pool has to buy it to sustain the price
Mr.. Jay Gould can propably sell out to a
pool a little quicker and to little better
advantage than any of the capitalists of the
day. He encoursg pools in these days, for
| be is hull On the market, and he always
| goes into pool when asked to, for the
| advance i'll any one stock helps advance the
others. But Mr. Gould Is all the time look
ing cut FIR his own precious interests, and
it is grave,y hinteI that he sells out to the
pool before the pool is fairly organized.
Thus the pool es a rule has n hard time Of it,
and pool profits are usually small. There
have been very successful stock manipEla-
tions, like the Lackawanna pool, that was
run throughout the year 1884 by S Y.
White, which, according to all trustworthy
reports, made a fortune for White and a
very handsome profit for the other members
! There has been, too, some money made by
the Pacific Mail pool, although it has not YET
hquidated; but these two are the only pool:
that have attained any measure Of success:
in TIE last year and a half or two years. Il
has t'een falling market, and the pool:
have had natural causes which tended
toward depression to contend with, in add
ton to the usual obstacles.