The Houston daily post. [volume] (Houston, Tex.) 1886-1903, 1901-09-19
y PAGES TODAY.
The suPgRLArNE OF EVIL.

E. J. Edwards, In the September Worlds Work, tells
us how trusts financed. Referring to the steer
trust he says that in spite of the doubt felt as TO
whether sufficient money could be got to organize It,
an underwriting syndicate succeeded in getting more
than the necessary number of subscribers to pledge
themselves to take enough Of the proposed trusts stock
and bonds to make safe and profitable It's guarantee of
market for as many of them the promoters should
find it necessary to dispose of.
The same experience was met with, he assures us,
when an underwriting syndicate was organized to
finance the Burlington deal, whereby the Northern
Pacific and the Great Northern railway corporations
guaranteed the bonds which issued to for the
stock of the Burlington railway. The general impress
sion that this underwriting syndicate pledged itself
for any amount up to seventyve millions The appli
cations for admission to it and urgent
and many men were excluded.
This eagerness of capitalists to subscribe to pledges
binding them to take the obligations of these big
poratons is accounted for by Mr. Edwards follows:
The eagerness Of capitalists TO subscribe these under
writing yudicaes the chance OF handsome profits with
Out large aena payments ne gene[al Understandings IN
financial circles IN New ar rs tdt the SUBSCRIBERS to the
Burlington syndicate received profit of upon their
subscriptions and that too without the payment OF cash
ONE man re- fYI gsye o ~ Ii S. c resumption
day of settlement with the subscribers for some
The reports the handsome profits that have come to the
favored subscribers underwriting yndicates tempt capital
gained very high conhdcnce For instance when Mr. l. Pier
Morgan undertakes to finance industry railroad
and organizes an underwriting syndicate 20 great rs the con-
hdence in his Judgment and SO many have been his
that actually all that is necessary send
circular 10 those whom he wishes have join him. and ia
voabe responses immediate 1t to be the easiest
not only to make money but make great
money simply pledge ones self accept certain amount
OF capital stock OF proposed industry railroad in
subscriber he called TO take it. II has often happened
that subscriber has done than sign his
railway reorganization has been financed he has received
check usually for his proportonae part at per cent of ht
total capital stock bonds that have been marketed by thu
Ii this rate of per which understood to be th
services accepted by the United States Steel corporation
the syndicate will receive millions less per (fo
per cent Of the earned by the syndicate for their
vices II this he the proportion of division the managers
Steel corporation will receive their services
dollars well as their share OF the remaining nine millions
which is the syndicate's remuneration.
The stock argument in defense trusts is that they
reduce the cost of production and tend to the highest
development Of industry by placing concentrated
wealth at it's command in the reach for perfection in
the manufacture of the particular article controlled
The reply is that trusts do not condne themselves tc
cheapenng and lettering the output the enterprises
they absorb hut aim rather at securing monopoly OF
such output that they may limit it to their advantage
and profit
Now, according to Mr.. Edwards, the organizing Of
trusts has been reduced to money making pastime
All one has to do to not only make money easy but tc
make lots of money is to subscribe for a certain
amount of trust stock and wait for results which often
come without cent of money having been nut up OF
that is quite pleasant but where does this easy
money come from? Who does it come out Of If not the
consumer?
AS breeders of monopoly, trusts are bad enough but
snaps for the enrichment OF underwriting syndt
Gates" they are the superlatve of evl