The daily morning journal and courier., 1905-10-19
HOW THEY ARE WORKED.
STORY OF NEW METHODS AND
 ETHICS OF SFNDICATES

How Subscribers are Expected to Come
 in without Exercising Any Choice
 Authority of the Managers Absolute
 "A Kind of Blind Pool .<
 Most things related to finance that come out in the course of public in- vestigation are already old to Wall street, and the only interest the stock market community has in them is to determine the effect their airing Is likely to have upon public sentiment. In the insurance investigation that Is now going on, however, facts have been brought out concerning syndicate operations which are of lively interest to many Wall Street people
 The workings of modern Wall Street syndicate are envsloped with a kind of mystery which even the sub seribers are unable sometimes to pen citrate An Inexperienced subscriber who becomes anxious or impatient con- suits another who has had more to do with such things, and he is told the ethics of the case forbid him to do this and that. He must sit shll and have faith. It is bad form for an out side subscriber even to inquire di- rectly what Is being done by the syn dicate. The authority of the syndicate managers is absolute, and they are likely to resent such inquiries.
 Not long ago a stock exchange firm advertised that it would buy at a dis- count the subscriptions In certain sym dicate that had been in existence for several years. The subscribers belfev- ed that the operations of the syndt- cate had been profitable, but they had been unable to get any accounting from the managers and knew not when to expect a division of the profits if any had accrued. Thus they were in no position to judge of the value of their subscriptions. Some doubtless sold out at discount, and it has al- ways been supposed that a little clique of insiders, knowing that the syndi- cate had been profitable withheld this information while trying to buy up the subscriptions of others.
 I A point which has not yet been brought out anywhere is that firms and individuals who are permitted to participate in syndicates as sub Iseribers cannot discriminate between promising and unpromising syndacates without being excluded altogether in the future after their refusal to share irf one. Syndicate managers have their regular clientele of subscribers,
  lpnce in awhile In an unpromising deal, else they will be cut off the list and will not be asked to partic pat !, the more profitable ones that may come later. A subscriber who has par, tioipated in several profitable syndi- cates gets word that he has been put I down for a subscription of so much in another one, or he may be called up and asked. not whether he will take any, but how much he will take, and he cannot refuse in either case to come in, for the more unpromdsing the thing looks the more anxious the managers l are to have him come in, and If he re- fuses he will not be asked to paFtsci- Ipate in more profitable things after ward ShreWd managers sometimes ithaVe way of holding an il1fe0dor prop osition back until several syndicates under their direction have turned out livery proftably, and then the doubtful prop osftion is brought forward. Sub lscribers to other syndicates, with their profits still fresh, cannot we'll refuse Ito take their share.
 | It is not unusual in Wall Street to hear a man say that he is hung up with so much of this or so much of that and that he could wish devoutly Ithat he wasn't, as it began to look as if it would turn out badly. He didn't believe in it at the beginning, but he couldn't refuse to take what had been allotted to him.-New York Times.