New-York tribune., 1901-01-27
STOCK PROMOTING.
ENCES ON 'CHANGE-A STATESMAN
IN COMMAND AND A SPECU-
LATOR AT THE WHEEL.

London January II.
Stock promoting is a necessary and legitimate
resource of modern industry. There is nothing
immoral in it, if the men engaged in it under
stand what they doing and do not conceal
their motives and methods ard the real nature
of their operations Even the highly specula-
tive enterprises may have their uses and the
promoters of them not necessarily criminals
or gamblers in taking large risks and playing
for big stakes. So long the real character of
their projects is accurately known from the
reputation of the operators investors have
themselves to blame if they are duped and
forced to pay a heavy penalty for their folly.
When there is conceaIment of the nature of the
enterprises and of Objectionable means en-
ployed for exploiting them. there is just cause
for criticism. When an eminent statesman like
Lord Dufferin, who has been Governor General
of Canada, Viceroy of India, British Ambassador
at st. Petersburg, Constantinople, Rome and
Paris, becomes the chairman of a company like
the London and Globe. investors have right to
infer that he has made an exhaustive inquiry
into the nature of the business. and will have at
all times precise knowledge of what is going on
at the central office. Otherwise he will be little
better than Mr.. Hooey's earls, whose names
decorated gilt edged prospectuses and were used
as decoys for credulous investors eager to make
money by assOciating in a business way with
people in smart society
Lord Loeb and Sir William Robinson had been
Lord Dufferin's prede ,essors in the chairman
snip They were men of the highest repute
and also personal friends who were anx-
ious to have him invest his money profit
ably. They had been fgureheads and ex-
pected him to be one also, and their own
experience indicated that It would be safe
| process. for the managing director had been the
power behind the throne ard retained control
of the Stock EXCHANGE transactions Of tho cOpo-
pany and had been brilliantly successful in
making money for the shareholders. Lord
Dufferin, after he had taken office. discovered.
as he now confesses that the Stock Exchange
interests were not only far more complicated
and extensive tEan he had supposed but that
nobody Who had not been Systematically trained
TO the business could ever hope to master it's
intricacies. 1t Lord Duiferns name rather
than his executive ability that at the
vice Of the company. The managing director
was left in charge Of what was practically an
exploitation agency for floating and manipu-
lating on the Stock Exchange a series of enter
prises on the basis OF overcapitalization He
understood the business. while the chairman.
whose life had been spent in diplomacy and
affairs of State. ignorant of it and got all
his information at second hand Lord Dufferin
had taken Lord Lochs word for it that he could
have full confidence in Mr.. Whitaker wrights
ability to manage the business. and the prestige
OF the chairman's name suffiCed TO satisfy new
investors that their money would be safe.
The West Australian Exploring ard Finance
Corporation and the London and Globe formed
In connection with 1t has successfully promoted
various mining projects In the South Seas. They
operated with combined capital of about
50 0o0oo0 and the mining corporations were
finally consolidated IN the Standard Exploration
Company. It is stated that dividends Of 265
and 230 per cent paid the original
shareholders. The two parent companies
then amalgamated like industrial trusts under
! So 100000 capital was increased in round num-
bers TO $40 600 600; and subsequently the British
| America Corporation was formed and brought
| under the same general management The syn
| dicate foated the Lake View Consols, the Ivan