[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

---------------------------<< 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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