Conspiracy Nation -- Vol. 11 Num. 13
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("Quid coniuratio est?")
[Synopsis of Frenzied Finance by Thomas W. Lawson. New York: Ridgway-Thayer, 1905]
-+- How The "System" Does Business -+-
Readers should know how the securities of a corporation are manufactured, how "put upon the market," how admitted to the Stock Exchange, how prices are made in the Stock Exchange, how fictitious and fraudulent quotations are created and disseminated, until the very shrewdest members of the Stock Exchange cannot distinguish those which are real from the fictitious in cases outside their own manufacturing. Then there is an elaborate and ingenious procedure by which public opinion is moulded, that is, by which people are made to believe that the prices at which they buy and sell the stocks and securities are bona fide; and this is a procedure as compact and as well understood by the "System's" votaries as are the methods of the bank-breaker or burglar -- who sends his "pals" ahead to "pipe" the lay of the land -- by felony's votaries.
The underlying principle of the several organisms through which the commerce of the country is conducted is the protection at once of the interests of the individuals composing them and of the public with which they do business. Provided this principle is adhered to, no harm can be wrought to either. Most of the contemporaneous swindles through which the people have been plundered were perpetrated through the agency of corporations, and this organism has become a sort of synonym for corrupt practice. Yet the original corporation invention as I have described it was devised to meet a real want of the people, and it has merely been diverted from its proper use by the lawless votaries of the "System."
Honest men in forming a corporation make publicly known the character and worth of the properties or enterprises they are organizing, what they have cost, what their profits are, and what may reasonably be expected by investors. The tricksters and the "System," with whom incorporation is generally but the first step in a conspiracy for plunder, surround the proceeding with an air of mystery and refuse information usually with: "We do our business quietly and in silence, and those who do not like our ways may keep out of this scheme." Their whole procedure is of that high and mighty order which impresses the ordinary mortal with a sense of confidence in the independence of its users and a conviction that their scheme must be so good that they do not care whether they sell or not. This is just the effect it is intended to produce.
The next step is to lead the people toward the shambles. This is done by "moulding public opinion," and for this interesting function the "System" and Wall Street have an equipment of magical potency. Public opinion is made through the daily press, through financial publications of various kinds, and through "news bureaus."
The first step toward "moulding public opinion" is taken when the "System's" votaries send for the dishonest chief of a news bureau, a man usually up in every trick of the trade. To this man the "System's" votary will say something like this: "We are going to work off blank millions of blank stock; it costs us thus and so, and we want to sell for so and so many millions." Nothing is kept back from this head panderer and procurer, for it would be useless to attempt to deceive him. After the quality and amount the "System" intends to work off in exchange for the people's savings are explained, that part of the plunder which is to come to the head news-bureau man is settled upon. The amount varies with the size and quality of the robbery to be perpetrated. In some cases as high as a million dollars in cash or stock or their equivalent has been paid to a "moulder of opinion" for simply so shaping up a game that the people might be deceived into thinking one dollar of actual worth was four, six, or eight dollars.
The head of the news bureau, having taken the contract to lay out and carry through the deceptive part of the scheme by which the people are to be buncoed, now begins operations. First, bargains are made with conscience-less financial editors of the daily and weekly newspapers, whereby for so much stock or for "puts" [1] or "calls" [2] or both, they agree to insert in their paper's financial column whatever yarns are fed them by the bureau man, regardless of their truth or falsehood. To justify the attention paid the subject by each editor, a certain amount of money is spent in advertising, in the newspaper that employs him, the merits of the enterprise. The financial journals are dealt with on the same basis. The news-bureau man then puts his entire staff to work inventing fairy tales of one kind or another to excite the interest and attention of the people.
(To show the extent to which this "moulding of public opinion" is carried, I know in one instance of a high-priced financial scribe being sent to live in St. Petersburg [Russia] for no other purpose than to send certain "news items" to a confederate located in Germany, who would get these items to a reputable English banking-house through whom they were given out in London as news: the whole object of this complicated system being that the news items might be sent back to New York without Wall Street suspecting they were bogus.)
I must not be understood as meaning to say that all financial editors, news gatherers, or news bureaus are (1905) engaged in this, one of the lowest forms of swindling, for such is not the case.
---------------------------<< Notes >>--------------------------- [1] A "put" is the right to sell to a certain firm or individual shares of stock at a stated price for a stated period.
[2] A "call" is the right to buy from a certain firm or individual shares of stock at a stated price for a stated period.
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