New-York tribune., 1902-01-29
FINANCIAL BUBBLES.
THE WHITAKER WRIGHT SCHOOL OF
FINANCE-SOCIAL AMENITIES OF
STOCK PROMOTING-AN IN
GENIoUS SUBSTITUTE
FOR PRESS CALLS.

DDS of business. AS a witness he is su
perior to Mr.. Hooley His manners are with
out reproach; he has perfect control over his
.emper; he seldom raises his voice above the
pitch required for polite drawing room conver-
sation. and the bulk of his testimony is deiv-
sred in a tone of injured innocence and with
signs of compassion for the ignorance Of bench
and bar respecting current methods of pro-
noting stock companies and speculatng on
Change IT'S a way have in the Street.,
is the refrain which runs through the recitative
of his proceedings in court. Mr.. Whitaker
Wright evidently has reverence for good FORM
Mr. Hooley's method of "squaring' titled peo-
pie with giIded names is repulsive to him. He
has never done anything so vulgar as to pay
for a social introduction, to advertise specu-
lative enterprise with the help of the names of
smart people the front page of the pros
pectus. Such window dressing as was en-
.oloyed was quiet and in good taste. There was
no bribing of the press, but financial writers
were assisted in recording issues Of stock
by having press calls at their disposal. with
the privilege of speculating in the open mar
ket without expense to the companies. What
ever justified by current usage in the Street
sacrosanct in this daring operators eyes
de content to do what other people were
in the habit of doing, and convinced that
whatever was was right. AS an optimist with
an 1GOldtrOuS reverence Tor correct SOcIdl Aol
Mr. Whitaker Wright has been an impressive
figure in Mr. Registrar Hoods court.
The construction of a speculative house OF
cards was described by the witness in matter
of fact way. There was the original London
and Globe Company with capital OF ST.
100000, and there annex, the West
Australian Exploring and Finance Corporation,
with another 81 100000 in capital. These COM
panies were reconstructed and brought under
4 single roof the London and Globe Finance
Corporation with the 100000 increased to
IS, 100000. wing was added on each SIDE.
There was the Standard Company. with q nom
inal capital OF S7,5O0,OO0. and there was the
British America Corporation, with another
sT5O0O00 These three companies with an ag-
gregate capital of S23,0O0000. had separate
boards Of directors. but were virtually under the
same general management, with business con-
ductei under a single roof. Mr Whitaker Wright
was the managing director, and could arrange
he furniture, decorate and redress the windows,
set up fresh partitions, and throw all the rooms
together whenever he liked. The assets of one
company could be placed to the credit OF an
other: the resources of subsidiary corporations
could be rearranged and distributed so as 10
show a paper profit whenever it was needed
for a balance sheet; the Indebtedness of one
rounpany could be transferred to another, and
there were all the modern conveniences for
facilitating speculation in the shares OF the al
lied group. All went merrily until faVcrapie
report upon Lake Views was converted into
reduction of output The London and GLOBE
and the Standard between them lost nearly
FL 100000 in the course of a single month py
the depreciation of stock There was a corner
in lie Roi No 2, and the London and Globe
made f125,000 when the public sold a larger
number of shares by 25O00 than were in ex-
istence On one occasion Mr.. Wright bought
30 900 Standard shares from the company with
out knowing It, and at another time he had re-
ceived authority to transfer speculation
amounting to &. $4,000 from the London and
Globe to the British America. In the end there
was a general crash, after he had slept night
after night on the office table while attempting
TO turn office paper into assets, and TO retrieve
the situation by making up the company's losses
in the market.
Mr. Whitaker Wright explained all these IN
tricate matters quietly as though he were
sitting in the smoking room OF club and ex-
changing gossip with congenial friends 1t had
been his business to promote mining properties
and to speculate on the Stock Exchange, and he
had done his best to manipulate the shares to
the advantage of stockholders, and had merely
adopted accepted expedients and followed the
rules Of the game. 1 am not attempting to
quote his words. but seeking to reproduce
the spirit of his testimony. No titled names
had been purchased; no introductions had been
solicited. Lord Dufferin. at the suggestion Of
the late Lord Loeb, was selected chairman
of the London and Globe, and afterward Of the
British America, and he allowed to have
his legal adviser as an ex off1cio member of each
board of directors to look about and see that
things went right. The managing director of
the three companies allowed to do ell the
work without interference If the fgurehead
of the three decker impaired dignity to it, Mr..
whitaker Wright was the only capable Of
steering the craft in smooth or rough water.
There was no imitation of Mr.. Hooleys method
of exploiting industrial companies on the social
principle that investors dearly love lord.
Consequently, there no blacklist Of distin-
guished clients, who were suspected of selling
their names for in prospectuses; there was
no swarm of buzzing barristers in court for the
protection of sordd peers. and there were no
accusations that the witness had been ap-
preached in the dark by marplots and offered
bribes TO commit perjury. Mr.. Wright under
stood what was good form and what was bad
form IN speculative finance, and there were no
determinations on his lips except a single as
sertion that a mining engineer had been treach-
erous, and that it had been thought advisable
to give another one a salary Of $4,000 in order
10 keep him out OF temptation.
Mr. Rooey in his day had considered 1t neces-
sary have large secret press fund and to
buy up city editors and professional blaclmail-
Mr.. Wright subtle and less
vulgar in his relations with the financial press.
He repudiated first all knowledge OF trans
actions of this nature, and asserted that since
1885 he had discontinued the practice Of giving
calls TO journalists, and, indeed, had cut loose
from them altogether. After a nights redec-