The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1889-06-12
STOCK POOLS.
HOW THEY ARE FORMED AND HOW
WORKED.
booming tho stocIS-LiberaI Inducements
to lnvestors-Large Prospects That
Generally Result In Small Pro-
fts-How 1t Is Operated.
T'Metropol" in Pioneer Press. ]

r'Metropol" in Pioneer Pressl
A Wall street broker has been telling ne
how pools are operated The first step is q
make the agreement and secure the cash.
Len men, say, agree to put up S1,OOO,OOO To
advance the price Of Northwestern. They
buy block a starter and then begin 10
manipulate for higher prices They talk the
STOCK up, work the Wall street news agen-
cles for all they are worth, fire out most
favorable financial exhibits of the prospect
Oh 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 are reiterated far and
near In Wall street, as everywhere else,
Eelteratlon has tremendous effect A story
Oh Northwests 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
ehtlre street to buy, and thus advance the
price. When 1T has gone up 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 II
was not blind pool but the more common,
ordinary Wall street pool Every member
or 1T has told his intimate friends all about
It's plans, and the news gets around very soon
The street begins to profit by the infOrma.
northwestern Men try a little bit of it to
day and sell out to- MORROW. 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 hquidats
some time, sell the stock after the rise 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
10 sell just before the pool sells. If he can de
that, he reasons, he will have assured him.
self of a fair profit, and If the profits OF the
pool are nothing he will 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 q
pool little quicker and to q 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 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, ana
1t is gravely limited that he sells out to tb-
pool before the pool is fairly organized
Thus the pool as a rule has hard time Of il
and pool profits are usually small There
have been very successful stock manipula,
tions, like the Lackawanna pool, that wa
run throughout the year 1884 by s. v
White which, according to all trustworthy
reports, made fortune for White and g
very handsome profit for the other members
There has been, too, come money made by
the Pacific Mail pool although it LAS not ye
iquidated; but these two are the only pool
that have attained any measure Of success
in the last year and half or two years 1
has been falling market, and the pool
have had natural causes which tendeC
toward depression TO contend with, in add
ton to the usual obstacles.