Read CHAPTER XXXIII of Frenzied Finance Vol. 1: The Crime of Amalgamated , free online book, by Thomas W. Lawson, on


To follow the various steps in the crimes of Amalgamated, my 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. When I have shown these things, about which little is known to-day by the public, my readers will have no difficulty in comprehending what I shall lay before them of the actual robberies in the case of Amalgamated and other notorious enterprises.

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.” Consider the institution as we now understand it. Certain individuals decide to conduct their business in railroads, mines, manufactories, patents, etc., in the form of a corporation and apply to the community the State Government asking authorization to do so. They are compelled first to conform to the rules and regulations laid down by the State for the control of corporations, which say in one form or other:

“We create you for the purpose of doing those things that are best for the many, not the few, and if we knew you would use our authority to oppress the many in the interest of the few we would not create you.” The fundamental privilege of incorporation is the legal authorization to issue paper titles of ownership to the business just incorporated. These are in the form of stocks and bonds. Whoever owns these paper titles shall possess the property and the business as the individuals did before they incorporated, and the law presumes that they shall manage and control that business, receive the benefits which come from it, and suffer any loss arising from its conduct, and that all these benefits and responsibilities shall be as laid down in the law. It follows that no harm other than that the law expressly prescribes penalties to prevent can come to any one from corporations thus created, always provided the laws are what they appear and what the people intended them to be, and that they are enforced as the people intended they should be.

It is most important to all concerned in a corporation that the paper ownership shall represent the real value of the property on which it is based, and no more. When the people exchange their savings for these authorized paper tokens, they should be able to rest confident in the State’s guarantee that they are worth what they purport.

There have probably been jailed in the United States during the past twenty years thousands and thousands of American citizens whose aggregate stealings do not amount to one-tenth the total taken from the people by either the Amalgamated, the United States Steel, the American Tobacco Company, or a score of other fraudulently organized or fraudulently conducted corporations.

There are various ways of organizing corporations and issuing their stocks and bonds. Sometimes a company is organized to acquire a property; individuals and institutions set down their names to take and pay for the shares or bonds. With the money thus obtained the property is purchased. Or the individuals who own the property which is to be the basis of the corporation exchange it for all or part of the stocks and bonds. In the latter event those original owners usually sell to the public the tokens thus acquired.

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.” Every great daily has a financial editor and a corps of experts in finance who spend their days on “the Street” cultivating the friendship of the financiers. At night they are round the clubs and hotels where the brokers and promoters congregate, debating the events of the day and organizing those of the morrow. There are also the strictly financial papers daily, weekly, and monthly whose corps of editors and news gatherers live on “the Street,” and know and care for nothing but finance. And lastly, there are the news bureaus, with runners out everywhere to gather in items of news affecting stocks, Wall Street or finance. These are printed on small square sheets of paper, and delivered by an army of boys at brief intervals while the Stock Exchange is open at the offices of the bankers, brokers, insurance companies, and hotels; or the same matter is disseminated by means of an automatic printing machine called a news-ticker. For this service the offices pay the bureaus from $1 to $2 a day. News bureaus form an important cog in the machinery for making stock-markets, as it is through the news they furnish to the Stock Exchange and to the offices where investors and speculators gather together that the big operators affect the market. A decision to buy, sell, or “stand pat” is often based on the on dits of these printed slips.

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. I will later describe one of them, a scoundrel so able and experienced that, to use the vernacular of the gutter of “the Street,” he can give cards and spades to the frenziedest of frenzied financiers. 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, and, to quote his always picturesque language: “Never send a sucker to fish for suckers or he’ll lose your bait, so spread out your bricks and I’ll get the ‘gang’ to polish up their gildings.” 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 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 conscienceless financial editors of the daily and weekly newspapers, whereby for so much stock or for “puts” or “calls” 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 about on the same basis. In return for straight advertising or for “puts” or “calls” they agree to insert the manufactured news. 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, and these tales must be so concocted that the public is drawn into believing that the statements disseminated represent actual conditions. I shall, later, give real instances of the working of this nefarious game of “moulding public opinion,” and present it in the lime-light necessary for its appreciation. To show the extent to which this “moulding” process is carried, I know in one instance of a high-priced financial scribe being sent to live in St. Petersburg 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 engaged in this, one of the lowest forms of swindling, for such is not the case. On the contrary, there are many of them whom no amount of money or influence could make waver in their allegiance to the truth and to honest dealings. With some of the others I hope to deal specifically later, and I shall not hesitate to set forth in detail certain transactions in which they have been engaged.