Evening star. [volume] (Washington, D.C.) 1854-1972, 1903-09-19
PROMOTING II TRUST.
Formation Of Huge Indus
trial combinnatipns.
AN ExAMPLE DESCRIBED
A WALL STREET r4oMorER AND
HIS AIDS.
Situation Which Gave Birth to the
Steel Trust-Underwrit-
ing Profits.
AN EXAMPLE DESCRIBED

Written for The Evening Star oy Serene s. Pratt'
Associate Editor Wall Street Journal
The tourist viewing Wall street from the
top of the big automobile coach which
visits the financial district two or three
times a day. as much to the delight of the
crowds on the street al the people on the
coach-does this tourist think that he sees
Wall street when he visits 1t In this way7
No more than the man on shore who
watches the battle ship in the bay really
sees it. Only he who has been on the ship
when the decks have been cleared for &C
ton has actually seen 1t. So Wall street
can be really known only when viewed IN
action, and then only by those on deck as
1t were, and in closer relation to the mighty
forces at work. Take. for instance, this
matter of promotion, which Is the theme OF
this article How many Of those who view
the stock exchange from Its gallery nave
any conception how Wall street finances a
trustF Yet the last seven years have been
above everything else an era or promouon.
By this Is meant a period In which there
has been started a vast number OF new en-
terprises, nearly all in the form OF stock
companies, most of them requiring the aid
of experts in the organization OF corpora
lions and the placing of their securities on
the market. Not only have many new en-
terprises been started, but there has been
much reorganization OF enterprises, much
conversion OF partnerships into companies
and many consultations of Industries into
trusts. The output of new securities has
been enormous. Stocks and bonds OF the
par value Of billions Of dollars have been
issued. In fact, there has been an over
the severe liquidation and decline in the
stock, market this year. Promotion Is, how
ever. at an end for the time being. The
country must have time to absorb or digest
the securities that have been issued. some
of which have been aptly described by
James J. Hill as 'tndigestible."
Sphere Of the Promoter.
Much has been said Of promotion and pro-
moters not at all complimentary to either.
This is no doubt because there has been
SO much promotion of companies with
watered stock. marketed at inflated prices.
But, as q matter of fact, promotion is but
another name for the encouragement or adj
vancement of enterpriseJ and the promo
ter's services to the world may be In the
highese degree benefcents Only there are
promoters and promoters. One promotes
for what there Is in It's as q speculative
gamble. The other seeks Ibis profit in
creating or extending legitimate industry.
1t is Of the latter class that now write.
Wall street supplies the mechanism for
promotion. The industries that are pro-
NOTED. the enterprises that are carried on,
are of course scattered throughout the
length and breadth of the country. The
skilled labor, the inventive minds. the great
experts who make successful production
possible by improving the output and
cheapening the cost, these men. on the
firing line of industry" are rarely seen in
Wall street, but they require the aid of
capital to supplement their enterprise, and
it is the part of Wall street to supply them
with capital. 1t is the special function Of
the promoter to bring capital and trained
skill together 1t Is he who marries them,
and let no man put asunder union so es-
sential to the prosperity Of the country, for
when they are divorced commercial depres-
sion sets in.
"The Trusts"
Now. how does Wall street promote
company, or, to be more definite. an indus
trial company, let us say trust? People
have no very clear idea of what trust Is.
DR.. Meade of the University of Pennsylva-
MIA wrote an admirable work on Trust
business of what are known as trust COM
panies. which are companies doing a bank
ing business in part like that Of the banks.
The trusts that he wrote about are the
great companies engaged, most of them in
dising. some in both. which are generally
the consolidation of independent concerns,
and which do an interstate business so
large that their field Of operations is as
wide as the country and sometimes ex-
tends over the world. Formerly the word
trust applied only to form of combina-
ton by which the controlling stocks Of a
number OF different companies were put in
perpetu1ty In the hands Of certain trustees