Pittsburg dispatch. [volume] (Pittsburg [Pa.]) 1880-1923, 1889-11-21


the whole issue are made in few hours. 1
recall one case while was over there where,
within four hours, after the opening of the
subscription books $50, 900, 900 were SUBJ
scribed for q IS, 900, 600 company and the
shares at once reached 800 per cent pre-
MUM. The ability with which these mat
tiers are managed shows the most consummate
skill, thorough knowledge of the condi-
tion of the market and perfect touch and
sympathy with the investing public. After
the lists are closed, the Board of Directors
make the allotment of stock and have the
power to favor whom thev choose. Thus
the compsuy is launched, the syndicate and
promoter take out their profit and the vender
his purchase price and the British public
within a year or two finds out whether their
investment is good or bad.
eli the public does not take kindly to the
new enterprise, and the underwriters are
compelled to take up the subscription (there
are generally several of them, and all with
large, powerful connections), the shares are
listed and the market manipulated until the
stock can be safely unloaded, This part of
the business requires the most astute brok-
ers. but it is successfully done, and the re-
quirement has in consequence evidently been
met"
ULTIMATE RESULTS FORECAST.
'swhat DO you think, Mr.. We'll, will be
the ultimate result of these investments, so
far as the investors are concerned-will they
make or loSe?"
THAT is question which only the logic
of events can correctly answer All else is
speculative and merely an opinion. 1t oc-
CURED to ME that while the percentage of
frst-class institutions which have been
taken over from this side is very large,
almost all, in fact, being good going con-
Germs, earning large profits, and at the price
sold would pay fair return on the invest
ment, yet by reason of the loading during
the interval elapsing between purchase and
the bringing out of the new company, many
will stagger under the additional burden.
You will at once appreciate that 20 per cent
added to the whole price, which never goes
into the treasury of the company,
is a large amount Of unproductiye
capital on which to earn dividends, while
the management is necessarily more ex-
pensive, and the former owners, with two
thirds of their plant transferred into cash,
are Yery likely to make new investments
and connections which will detract their
attention from the business, and their in
terest NAV not be so undivided as when
thev were the owners OF the whole enter
prise. The English investor is satisfied
with q much smaller return than we de-
mand, and if the middlemeu have not been
too grasping, and the venders remain faith
ful, the result may be satisfactory"
SOURCES OF CAPITAL.
"Where does all this capital come from?"
queried the reporter.
81 gave that question some investigation
and concluded it was from the whole
European Continent the money came. In
vestors are afraid to 60 into new enterprises
so long as the present armed neutrality of
the great powers continues. - War would
depreciate their investment, if it did not
wipe it out altogether. This is true of enter
prises in England, Germany, France, Rus
sia, Holland, and in fact all the European
Powers. A war between any of the Powers
would be likely to involve others, hence the
fear of investment in any of those countries,
but the United States is not in any such con-
dition, and its industries will be benefited
by a European war, while the returns are
seducingly large; London being the money
center of the world, the world sends its
money there for investment, and at present
American industrial enterprises are the
fashionable and favorite security"
A BIG CROP FOR SALE.
"Are many of our industries for sale?''
81 was informed by the manager of one of
the largest institutions operating American
OF sale on his desk to bring out a new COM
pany every Saturday for four years. All of
the best syndicates and promoters are filled
up with options. Many parties are in Lon
don claiming to have options and negotia-
ting the same who are not authorized to do
so, and several cases came under my own
observation, when 1 cabled over to verify
nv suspicious and had them confirmed. The
commissions on these sales are so large that
there are hordes Of so-called agents securing
the country, and the least intimation of a
willingness to sell is interpreted into an op-
tion, and the agent proceeds, hoping if he
brings the parties together to get his reward.
MANY sales have been spoiled in this way"
Pow long do you think this craze will
last?"
There are already some evidences of a
diminution in the speculation in American
securities or rather in the stocks of English
companies owning American enterprises,
but in certain lines it will continue for a
considerable time.
AMERICAN BREwERIEs WANTED.
''Breweries are still great favorites, dis
tilleries equally so, while mines are picking
up very much. ANY great speciality manu-
featuring enterprise il of long standing
and good reputation with a growing bust |
ness can be placed. Stocks of a speculative |
character are sought for more than conserva-
tive investments, well secured, but yielding |
q proportionately smaller return"
"How is the trust idea regarded in En- !
gland?''
'iThe opposition to combinations in En- |
gland is nothing as compared to this coun-
try. Trusts in the necessaries of life are |
tolerated with composure. While I was in |
London there was an immense Bread Trust |
formed which has taken over almost all the |
bakeries in the United Kingdom.
"In discussing the subject with gentle |
men seemingly well informed 1 found that |
they regarded these combinations not in /
imical to the public, but they thought |
they frequently worked hardships upon the |
individual competitors, those who would
not enter the organization. This Bread |
Trust was brought out as a pub |
lie company and the stock was
subscribed for the same as any |
other organization. The chief difference 1 /
could observe between our trusts and those /
in England was the boldness of the latter. |
All of their companies are usually operated |
under the same name and one charter in /
stead of the manner in which we proceed |
here. Combinations there, L believe, are
even more prevalent than here"
what about the proverbial slowness of
the English fDancier ?''
Luis IeputaGlOu AN luCllneV 70 aVLrlO-
ute 70 the great number of middle men and |
the difficulty they have in approaching the
great houses. When once you get to the
top, delays are exceptions rather than the
rule.
PEsTIFERoUs MIDDLEMEN
'fThe middleman is the pest of English
he is ubiquitous, full of prom
ises, always sanguine and sees success lust
beyond his grasp, barely eluding but some
how always escaping his vociferous efforts.
A 1nost every man of Influence in fba |