Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-11-12

was formed on the spot, most Of the
members being recruited from the large
Stockholders of the corporation VINO
were present. The $40, 100000 was 70
be supplied in cash as required, each
of the pool members making his own
credit arrangements. ,,
Stock was accumulated through
period of six weeks ending about the
18th of June. BY cleVerly placed nuy-
ing orders at crucial moments a poCColil
price for the stock was established at
fipure 40 points under the high quota
tions of early May. After liquldation
was absorbed a brisk rally eventuated,
under the influence of the rapid raising
of the pool bids, and late in July the
price was showed up through the old
top" into new high territory.
Pool Members Refuse Profits.
with accumulation completed and his
preparatory work done, the pool man.
aper was now ready to stage the real
fireworks" Wall Street was fun OF
rumors affecting the issue-rumorS OF
possible mergers. Of possible STOCK olVi-
dends, of possible increases OF cash
dividends. of possible "spllt-up OF tIle
shares-all the tales which market iet-
ter writer's and financial reporters gatH-
er from everywhere and nowhere IN eN-
PLANTATION of spectacular aoVanCe. III.
vestment trusts and other large buyers
were informed of the possibilities In
less romantic terms, and scale buying
orders were placed to take advantage OF
technical reactions. A big following OF
margin SPECTATORS and floor traders
was created and daily activity IN tne
shares was maintained at nlgh level
In sum, everything was set 1or a lur,
ther extended advance, to be 1olloWeo
- Ia q q
nificent profit.
The FIRST part of the program went
through without a hitch. Early In
August the price of the stock was run
up another IS points. With the mar
ket taking all offerings, and begging
for more" the time had arrived Tor
pool distribution to get under way.
Then a conference of pool members was
called Quotations were now SO points
above the average price at which me
pool had acquired its holdings. II the
rich members of the syndicate sold
they must pay large income taxes. They
knew the future possibilities OF the
issue and saw no reason why tney
should not hold it. The final decision
was that only enough shares should
be sold to pay off bank loans on the
pool stock. At the price to which the
advance had been carried only about
20 per CSHb "a lklC pun llOANhibo AA'N
to be liquidated to cover the loans
An agreement was made with the pool
manager which permitted him to make
about one-half the total profit he would
have collected had the deal been COM
pleted as originally planned. Being
himself a very wealthy man, with an
income subject to large surtaxes, the
operator in turn decided to sell only
enough shares to free his cash invest
ment, retaining his profits in stock,
The pool closed with all profits still
held in paper"
Mystery Stocks Advance Easiest.
It is an axiom among Wall Street
men that the easiest stocks to handle
under favorable market conditions are
the so-called mystery stocks"-issues
like the one in which this $40 200, 900
pool operated, thu stocks of corpora
lions with undoubted large potential
tiles of future increases in earnings,