Evening star. [volume] (Washington, D.C.) 1854-1972, 1905-06-11

public does not 8uRer from WAA aueeh
practices. There IL no adreat parting OF
the great American people from tneH
money. and the big men don't eat the Ht-
tie men. II for no other reason. because
the little men are not there TO De eaten.
Yet. 1t is precisely when the dullness makes
tho wall street powers virtuous. OF. at al
events. harmless, that what might be called
the professional morality OF the street ap-
pears the most pitiful. TO imagine that the
big men of the street. whose business 1t 10
to manufacture securities and to sell them
at a profit are uniformly bad Is nonsense.
II 1t were not for the fact that the public,
or that part which has brains enough to
make money enough to buy securities. is IN
teIligent the sweeping generalizations ana
picturesque semi-fictions of frenz.ed imam
cial writer's would have more effect
The big men are not all crooks nor
are they always exclusively concerned VIII
augmenting their fortunes at the expense
of credulous persons. Some or them SIN
against the ethical code often enough IN
all conscience, but in a bull market their
offense, are overlooked because everybody
Is making money. And in bear market
the big men have their place In the COM
munity, among other things being supposed
to do their utmost to avert panicS. In the
dull days the great financiefs say nothine.
They may do nothing or they may saw
wood like all possessed; but il 80 the cas-
ual observer Is not aware of 1t. Because
the public is not in the market and the
'bfg men are at all events not active the
professional Spectator is more IN evidence,
and then 1t becomes apparent that what
the country mistakenly calls the wall street
point of view is not nice. 1t must De re-
membered that such a point of view is
really that of stock gamblers and that they
are not in a majority They do not fairly
represent Wall street in numbers or dollars
or brains.
These observations are necessary not SO
much because defense of Wall street and
its methods is here attempted, but because
so much has been made lately--and very
properly so-of the Equitable Life disclos-
ures. The great financial interests sin
cerely regret the publicity that has been
given to the affair for obvious reasons. A
banker need not have a finicky sense of
right and wrong of the abuse OF high ON
cial position for purposes OF personal gain,
and yet deeply lament an event which, must
have disturbing effect sentiment
throughout the country which Is had for
business. But the professional traders see
in such an affair merely an excuse for SELL
ing stocks they do not own, and the COM
mission man feels resentment toward those
who inJure business by making the GUS
toners afraid to trade.
The loss of commissions is a serious mat
ter to the brokerage firms whose expenses
are incredibly heavy. But the curious
thing is that the average professional ap-
parently thinks that the sin of the be-
smirched Equitable directors was in being
found out. This habitual attitude toward
that sort of thing has done as much as
anything else to give Wall street a bad
reputation throughout the country.
There can, however. be no question that
there has been more or less the same abuse
OF official position from time immemorial
1t Is also probable that there VIII always be
directors of corporations who are more in
tereSted in the ticker than in the affairs OF
the company they are supposed to direct. A
stock hpQjpS rise. There is for
it that the street can see. But somebody is
buying the stock In quantities sufficient to
make the price advance. After a few points
rise everybody asks for eXpiana tons and
light on the subject. In due time come ru-
mors of an increased dividend. The profess
SIGNALS, we'll as outsiders, who have
tips" rush in to buy the stock. The div
idend Is increa Sed. The rise is over 1t IS
not denied that some of the directors and
high officials of the company knew what
was coming. The stockholders did not.
The stockholders are not supposed to
watch the tape, but to receive the in
creased dividend with gratitude and rejoice
that the price of their stock Is higher. The
insider who began to buy early before the
rest of the world knew why anybody should
buy pockets nice profit. On the theory
that it was a good turn it is felt that 1t
therefore deserves another. This business
of using the knowledge gained by being in
control of a corpora ton Is regarded by
some directors as one of the perquisites of
the position. The immortality of it is plain
enough. but it does not arouse much indig-
nation unless lies have been told. Once in
while the directors are guilty of paying
or passing dividends entirely for stock mar
ket purposes. But because this is out-and-
out crooked there is legal redress, and when
CRATER violates law that is on the stat
ute book he Is guilty of the crime of stu
pidity. and therefore deserves to lose some
of the money illegally made. And this
sometimes happens.
The practice Of certain directors thus to
take undue and unfair advantage of their
position is, of course. no new thing. That
it has become so frequent practice to
be alarming is true only since the big boom
began, shortly after the first defeat Of
Mr.. Bryan The public, rich as never be-
fore in the history OF the United States,
took to stock gambling scale unprece-
denied. colossal, absolutely marvellous,
possible only in a country as wealthy as
this. When the great financiers found that
the public would buy stocks by the billion
they supplied the demand. If a railroad
had been reorganized the people who
financed the new company saw that instead
of waiting three years to make s200,000 they
need wait only four weeks to make ST.
coo 600.
They kept on improving the properties
but at the same time they kept an eye on
the ticker. Since 1898 there has not been
a president of a big corporation living in
New York that has not had a ticker in
his private office. The only exception 1 can
call to mind Is the president of in
dustrial company. who for some reason or
other contracted the habit of being so
deeply interested in the operations of the
factories and the Improvement of manu-
featuring processes that he has been I'M
popular with his subordlnates. He would
have been asked to resign IL it had not
been that under his management the COM
pany has been growing in productive ca
pacity and in earnings.
Owing to the financial prominence of it's
insiders the public has eagerly read ar
tIcle after article on the Amalgamated Cop
per Company. The fact that its incor-
porators paid only $50. 900, 600 for what they
afterward offered for sale to the public at
SIS, 100000 Is in itself no crime 1t Is the
millions that make 1T seem heinous An
art dealer in London offered certain paint
ing to a collector three years ago for
5000 The collector refused because 1t
was too dear. The dealer less than six
months afterward sold 1t to Mr. Morgan
for 10000. II there have been any ex-
pressions of sopfow for Mr. Morgan or
Indignation toward the dealer they were
pitched in too low a tone for the human
ear to catch.