The Washington times., 1921-03-25
FINANCE
IN
Too Much Film -flamming
Connected With Stock
Market Manipulation.
Reprisals Are Courted.
By B, C. FORBES.

whether .the present system OF
running things will last? II
These doubts force themselves into
my mind because l sometimes wonder
whether it deserves to last
/ have particular reference to tho
way things are done by bankers as
sociated with tho floating Of securi-
ties. the financing Of companies and
tho manipulation Of stocks. =.
Often and often the conviction IL
driven home that the public is fiim-
nammed by insiders, who. through
rheir knowledge and power. roll up
fortunes for which they have rendered
no corresponding service
A.. G. 4 w. L LINES.
When the shares OF the Atlantic.
Gulf and West Indies Lanes steam
ship Lines were selling around 14O
banker connected with one OF the
two largest private banking houses
in America, a house having intimate
connections with, the company, told
e friend to sell the stock short ~ the
company's position was becoming so
unfavorable that the shares were cer-
tain to drop $40 or more each.
They have since dropped more than
ordinary stockholders were supplied
with anything like the information
which this banker possessed?
Without question, insiders not only
unloaded their holdings on the public,
but sold thousands Of shares which
they did not own, confident that they
could buy them back from the hood
winked public at very much lower
figures.
FINANCIAL REPORTER INQUIRED
"A financial reporter received what
he felt was authentic information OF
a very unfavorable nature regard
ing certain mine.
He went to the headquarters of the
banking firm that had floated tho
stock. He was told that the man
running the mine would be in the
city within few days and was
asked to come back then. He did.
The banker and the mine man
questions. Denial followed denial a.
each uDfavorable statement was
called on by the reporter. He hap
pened to look up from his note-
book and caught tho two exchang-
ing a guilty glance He ended the
interview at once by telling them
that he reserved the right to ex-
press his own view of the property.
He printed statement that the
irsiderS venementIy denied informa-
tion he had received about the mine,
but that he was convinced the un-
favorable information was correct
The shares were then selling above
$50 each. They are now down to III
each.
/ personally have been lied to by
the Guggenheim people at least
twice. Their intention In both cases
was to mislead the public regarding
the value Of shares the Guggenheims
were interested in.
Too often new issues OF stocks.
and sometimes bonds, are fIoated to
the accompaniment of enthusiastic
Deating of builish tom-toms.
Alluring statements are sent on:
over the ticker; financial writer's are
induced to print glowing paragraphs
and articles In the newspapers; AMI
then ofacial figures and forecasts
designed to inveigle the public into
subscribing are widely published in
large advertisements announcing tho
issue.
The insiders, who often get their
shares at very little or no cost at all.
take advantage Of the interest thus
aroused to sell out to the public. This
accomplished. thu shares begin to
drop and drop.
Sometimes, OF course. the Insiders
are sincere in their prophecies Of
what their new companies will
achieve. But II is asking too much
to, expect the public to believe that
there is anything resembling sincerity
in, ALL cASoS