Springfield globe-republic. (Springfield, Ohio) 1884-1887, 1885-03-01
STOCk POOLS.
HOW THEY ARE FORMED AND HOW
WORKED.
Booming the Stock-Liberal Inducements
to Investors-La Large Prospects That
Generally Result in Small Pro-
fits-How II L. Operated


MetropOl' Ia Pioneer Press.
A Wall street broker has been telling ms
how pools are operated The first step is to
make the agreement and secure the cash
Ten men, say, agree to put up s1,00O,0O0 to
advance the price of Northwestern. They
buy a block as starter, and then begin to
manipulate for higher prices. They talk the
stock up, work the Wall street news agen-
cies for all they are worth, fire out most
favorable financial exhibits Of the prospect
Of tine 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 are reiterated far and
near In Wall street, as everywhere else,
reiteration has a tremendous effect A story
Of NorthweSts prosperity told on Monday
may have little OF 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 long way the
pool sells its holiings and divides the profits
But thousand obstacles have been in the
way, and the profits have teen small
First, the pool has not be kept secret. 1t
was not blind pool but the more common,
ordinary Wall street pool Every member
OF it has told his intimate friends ali about
its plans, and the news gets around very soon.
The street Legins to profit by the informa-
tion that an attempt is being made to hoist
orthwe>tern Men try little bit of it to-
day AMI sell out tomorrow. When they sell
the pool has to take the stock. The bears
hear of it. and knowing that nothing is more
certain than that the pool must hquidate
some time, sell the stock after the r.se has
been somewhat accomplished. Moreover, the
greatest danger IS from the members of the
pool selling out on the pool While the pool
stock is being bought the chances are 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 he can do
| that, he reasons, he will have assured him
self of fair profit, and if the profits Of the
| pool are nothing ne viii still be ahead. So
he 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
| pool little quicker and TO little better
| advantage than any Of the capitalists of the
| day He encourages pools in these days, for
| he is 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
| it is graveIy hinted that he sells out to the
| pool before the pool is fairly organized.
| Thus the pool as rule has hard time Of it,
| and pool profits are usually small There
have been very successful stock manipula-
| tions, like the Lac,-awanna pool. that was
run throughout the year 1884 by S. V.
White, which, according to all trustworthy
reports. made fortune for White and q
very handsome profit for the other members
| There has been, too, some money made by
the Pacific Mail pool although it 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 two years. 1t
has been falling market, and the pools
have had natural causes which tended
toward depression to contend with, in addi-
| ton To the usual obstacles.