New-York tribune., 1909-09-25
BIG N. Y. BOND HOUSES
CONSTRUCTIVE FORCES.
Take Issues of Any Sac and Dis
tribute Them Among Investors.

AS n constructive force In American finance
the Individual and collective power and fmpor-
lance Of the banking and brokerage houses IN
the Wall Street district is paramount They
have their fixed and vital functions I'm the field
of finance and the scope Of their influence ex-
tends into foreign lands. The participation OF
group of New Yorks private banks in the new
Chinese railroad loan is a striking instance Of
the length to which the enterprise OF these
houses is carrying them in their policy OF ad-
yancement. These establishments have made
possible the financing and construction Of the
railroads of the United States. They finance
and market the stock OF the great industrial
corporations. the formation Of which has been
such a pre-eminent feature OF the commercial
development of the country in the last decade.
In their activities they are as tireless as they
are painstaking II they approve. new railroads
spread their steel networks over rich, virgin ter
ritory, and Industrial enterprises rise up
every hand 20 furnish employment for labor and
investment and gain for capital Warning fac
tions in corporations are brought together. They
investigate business propositions and bring them
in touch with capital. SO accurate is the judg-
ment of these houses in estimating the probable
stability and profit of propositions which seek
their aid that one house in the last quarter OF
century has record OF promoting enterprises
Involving the investment OF millions with only
one default in payment OF obligation. This
the firm paid itself
FLOATING IMPROVEMENT RONDS.
In the notaton OF the unending issues Of mu-
bicipal bonds that constantly being issued
TO pay for public improvements the private
banking houses are OF Invaluable assistance.
Issues ranging from $25OOOOOO to a few thou
sands are purchased in a block and distributed
TO small investors at a fair margin OF profit
The lawyers Of these houses establish the legal
ity OF the bonds, and on the assurances of the
lawyers the sellers guarantee them 10 their c,,s-
toners reputable banking and brokerage
house VIII always be found ready TO stand back
"f any sale of securities II makes to its cus-
toners
Inc selling organization is systcmatized and
almost machine-like in the sInoothncss OF to
operation. Trained statesmen cover the conn
try each within the territory assigned to him
seeking customers for bonds Lists are made IN
OF names Of investors and persons who are likely
TO be attracted by the Offering of good. interest
bearing securities.
Inc process of floating a bond issue as il is
done by the important and reputable banking
iouses in New York, is an Interesting ono %
follow. A contract is first made with the cor
7oratiOn issuing the bonds Then an ,,pdor
writing syndicate of bond retailers is rorp,od
The retailers agree 10 take, at fixed urIco
>'Ich proporuOnate part Of the issue as the nuh
= may not purchase later on at a higher price
y other words the retailers agree to buy a Ger
nn number Of bonds at a certain price rcIvin,,
Tor their profits upon their power to sell tbcrn
above this figure