New-York tribune., 1901-01-27
STOCK PROMOTING.
Continued from First Page.D

its hands. The London and Glooes resources
were locked up in mines and railway construc-
tion contracts. and its operations became de-
pendent largely upon its credit The Lake
View Mine. which was one Of the leading prop
critics had been paying at one time dividends OF
S5.O00.OO0 a year. and the engineers had assured
the directors that the output could be MAIN
tained indefinitely. The rich ore in the upper
level came to an end Unexpectedly. Mr. Whit
aker Wright then determined, on the advice OF
the engineers. 10 obtain absolute control OF
the mine and TO work IL on different principles
so as 10 secure continuance of dividends
Then followed manipulation of the stock on
large scale with the natural sequence Of for
midable bear movement against the entire group
OF companies controlled by the London and
Globe. The managing directors secured a large
block OF shares by means Of a temporary loan
of about 50, 800 600 on 10000 Lake View shares
and other collaterals. 1t was virtually a gi-
gantie bull operation. and the bears struggled
and combined against it, and finally defeated it,
The stock was in sight. but could not be paid
for The coIIaterals were sold. Tens OF thou
sands OF shares were brought in, the market
was broken. and there was loss for the
London and Globe Of 50 100000 Lord Dufferin
was nominally in command, but the man at the
wheel Mr. Whitaker Wright, had run the ship
on the rocks and nobody on board knew how
much salvage could be obtained from the wreck.
The shareholders have not yet lost confidence
either in Lord Dufferin or in the managing d.
rector They have listened this week to the pa
thetic confessions Of one and TO the comfort
able optimism Of the other and they have
rallied around them with proxies, and expect
them to reorganize the company They hope at
a meeting 20 be held next week TO receive the
announcement that the company's debts have
been paid, and that arrangements have been
made for protecting and developing its valuable
assets and resources. The ship may be pulled
off the rocks and enabled 10 right itself and
until the final result is known comment upon
an intermediate stage OF operations would be
out OF place II is clear, however. that the
business Of this company has been entirely out
side the range Of practical experience of re-
tired statesman like Lord Dufferin. He has had
no real control over the business has depended
upon the skill of daring operator In manipuat-
ing. and attempting to corner, Lake Views. and
has compromised his great reputation by per-
sonal association with the management of highly
speculative enterprises There is, happily, no
suspicion that his personal honor has suffered
from these transactions. II the wreck goes TO
pieces on the rocks he will be OF the heaviest
losers. He invested largely in the shares at the
outset and subsequently increased his holdings
by purchases at high prices. and IL is known
that he has not parted with any Of his stock.
While his honor is unbemished, his reputation
for sagacity has been greatly impaired. Three
weeks ago. at meeting Of the shareholders. he
declared that the company was perfectly sound.
He now has the modification. after the wreck,
Of admitting that he did not know the company
was on the brink of ruin. His melancholy plight
ought 10 deter public men OF eminence from
risking their fortunes and regulations by per-
sonal connection with speculative enterprises
the details OF which they cannot understand
Lord Dufferin not only risked his own money,
but he has also dragged hundreds Of investors
into a whirlpool Of speculation.
The use of ornamental names has been ia
vorite expedient OF all the recent English mas
ters OF the art Of stock promoting. The late
Baron Grant considered this most useful de-
vice, and used 10 keep in his pigeonholes lists
OF prospective directors for any big enterprises
which he might have 10 handle and carry into
market. Mr. Ernest Terah Hooley. born to pow
erty and raised by his own audacity to the rank
OF prince among fnanciers. took the greatest
possible pains with his lists OF directors. He
considered that the stock promoter was fairly
entitled to his profit and that his money was as
honestly earned as that Of any tradesman. He
used to say that when he bought company for
two millions and sold IL for three millions
he was merely doing what the butcher did
in purchasing OK or sheep, cutting 1t
up and reselling il at a profit. he olo not, now
ever, consider stock promoting a vulgar trade
In marketing his wares he took good care TO
have the labels gilt edged and tied with blue
ribbons. He acted on the principle that an In
weston loves a lord. He obtained introductions
by hook or by crook to noble earls who were in
need OF money, and induced them 10 allow their
names TO be used in his schemes Of stock promo
tion. A prospectus. in his estimation. needed TO
make subtle appeal TO smart society, and the
names OF an earl or two must be on the first
page as a guarantee Of fashionable investment.
II would be unjust TO identify Lord Dufferin
too closely with Baron Grants directors, cleri-
cal and lay or with Mr.. Hooley's speculative
earls. He had reputation OF superior lustre.
and he had the honesty 10 invest his own fortune
in the undertakings for which he asked public
support. He was. however a square peg in a
round hole as chairman OF the London and
Globe. His name covered financial operations
which he could not hope 20 control. There was
az least on his part a lax sense OF RESPONSE
bilty Of a director and chairman. He too
ignorant OF the tortuous methods Of Stock Ex-
change finance 10 be the leader Of so speculative
an enterprise. When so eminent a man COM
promises his reputation for sagacty and good
sense il is high time for the radical reform In
legislation for City companies OF which the late
Lord Chief Justice was the outspoken advocate.
AS for this reckless system Of company promo
tion organized on the basis Of excessive cap-
tslization md worked out by stock manpula-
ton on Change. IL is only fresh indication
OF the sordid avarice the lust for money. which
the winter fogs OF London. /. n. F.