New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1920-03-29

moments on Wednesday. and again
on Thursday when brokers were
bidding frantically for call money
with none in sight. At one time $751;
900, 900 was wanted at 10 per cent.
The banks loosened up their purse
strings toward the end of the week.
But the fresh run-up in call rates
they touched ID per cent on Wedres-
day-served notice upon the specu-
lative fraternity that they are still
skating upon thin ice, and that, while
temporarily there may be a super
fetal appearance Of ease, the funda-
mental position of the credit market
has not altered greatly. Bankers,
however, believe the crisis Of few
weeks ago has been passed and that
the danger of a collapse such as was
freely predicted is remote.
1t has been long time since Wall
Street has experienced quite the
same kind of market in stocks as
is now being carried on. The stock
market is full of what the financial
district calls Speculative POOLS" or
cliques organized to exploit the mar
ket possibilities of certain issues in
which they are especially interested.
Such pools are usually formed for
the express purpose of distributing
stock purchased at much lower levels.
The process is interesting. First,
there is a period of accumulation
during which the particular stock to
be doomed is purchased at as low a
level as possible. If the public is not
in the market at this stage, so much
the better it is for the pool. The
second stage is the one in which pub
LEFTY is given in a rather guarded
fashion to certain favorable aspects
of the operations of the companies
whose shares are to be doomed, which
may not be new, but which neverthe-
less serves the purpose of the
sponsors of the move. Spreading of
such facts and wise tipping of the
stock are then used to get big
volume of business and large fol-
lowing in the stock. At this period
every effort is made to push prices
forward by manipulative effort or
otherwise until public following is
built up. And once the public comes
in and things go we'll the third stage,
the one in which the unloading of the
stock by the insiders takes place, is
entered upon. This is the way sue
cessful pools work. The methods
may vary somewhat in detail, but
the principle is usually the same.
History repeats itself-even in the
market for International Mercantile
Marine preferred. Reports floating
around Wall Street last week were
reminiscent Of the famous and
fascinating IDEAL on-deal off" game
which was played so successfully, by
those on the inside over a period of
many months in 1918. This time the
reports have to do with a recapital-
ization scheme. 1t is one of the
curious facts of Wall Street that q
stock can be doomed because a COM
pany owes it's stockholders a good
deal of money. =
Time is, as the lawyers say, of the
essence in considering the General
Motors episode, which was the most
conspicuous market event of the
week. The time to rule that ten
General Motors certificates consti.
tuted good delivery for one share
of the old General Motors stock was
when the former were admitted te
trading. But the Stock Exchange
waited until an acute situation had
arisen before acting. Having waited
SO long, it is open to question
whether it should have acted at
all. We do not recall any instance
In which the Stock Exchange has
acted so summarily to protect the
public whose interests it is supposed
to safeguard. Why, then, should it
have taken such an usual step tc
protect the gamblers in General
Motors who guessed wrong? For
that, apparently, is exactly what
was done, since selling such stock
short is just gambling and nothing
more. The ruling, which extricated
the shorts from an exceedingly un-
comfortable, not to say dangerous,
position, must have produced in some
of the lucky ones a feeling of amazed
relief, but those who were long of
the stock were not observed to ap-