WALL STREET GIANTS

Greymouth Evening Star, 12 October 1928, Page 11

WALL STREET GIANTS

BUILDERS OF BIG BUSINESS.

A new group of financial giants lias arisen in America, dwarfing by their achievements the historic figures of the past. Wall Street leaders of former days were frequently speculators pure and simple, and not a few were bears, acting often as disruptive forces and even in times of stress or panic using every strategy to get prices down and buy in their phantom shares, sold at or near the top of‘the market. Fifty years or more ago the standard of integrity now prevailing throughout Wall Street was often absent, and ruthless battles were fought by the giants of those days. But times have long since changed, and the character of leadership with them. The late Pierpont Morgan’s dictum that whoever was a bear on America went broke anticipated the fate of all the great bears, including the last and at one time one of the most succesful, the famous Jesse Livermore, a man of iron nerve, who could sell but never buy. Then arrived a group of shrewd stock market operators who studied values and went with the tide and were nearly always bulls. The most successful of them was Bernard M. Baruch,- who during the war sprung full-fledged from the brow of Persident Wilson as the chief purcliasing agent of the Government, and became a statesman overnight, later going to the Peace Conference with Wilson. Ho claims to have retired from the speculative field, with his millions, but evidence of his fine hand is still felt- occasionally in Wall Street. He made another fortune in Texas Gulf Sulphur. He now devotes much of his time and wealth towards political aid to the farmer.

Lately, however, has come forward a new type, men who have built up great industries and incidentally great fortunes for themselves, who work not only for business expansion but for the market enhancement of their share holdings, and who frequently take, the public into their confidence, so that all who read may buy their shares and participate in their prosperity. There was Mr. Cochrane, partner of Morgans and director of General Motors, who predicted on sailing for Europe several years ago that General Motor shares would advance 100 points, based on earnings and prospects of the corporation. The 100-point rise took place in short order, a share split-up followed, and the shares have since doubled again.

Mr. Raskob, chairman of General Motors, has frequently announced estimated earnings in advance and predicted price advances in the shares, which have always taken place.. His last prediction a few months ago was .that on their earnings General Motors shares should sell around 230 dollars, and ho intimated another stock dividend, which may be announced in August.

Raskob is the reigning financial genius of America. While Carnegie in the days of the Carnegie Steel Company, before its absorption into the trust, created 30 millionaires out of his younger partners, Raskob made SO millionaires in four years. Here are his own words: “We induced SO of our senior and junior executive to go into debt to buy General Motors stock. We got them to pledge themselves to buy 33,000,0000 dollars’ worth. They put up 5,000,000 dollars and borrowed 28,000, 000 dollars. That stock to-day is worth 250,000,000 dollars. All obligations have been paid off and everyone of these men. even the juniors who put in 25.000 dollars, is a millionaire. They became owners and worked their heads off for success. We help our labouring men to save and invest

in General Motors and we have no laboui - troubles.” ; TEN VERY RICH MEN. It seems that wives are also encouraged to buy shares in the company. Mrs. Alfred Sloan, wife of the president of General Motors, however, proved herself a less able financier than her husband, when a few years ago at her own request he bought from her her shares in the company at the then market price—and which have since advanced 3,000,000 dollars in market value. But instead of cash her dividends come in the form of rare gems or othei - gifts from time to time.

Mr. Sloan told the writer: “I haven’t‘bought or sold a share of General Motors stock for four years. Ten of us- who operate the company own half the common stock.” In other words, ten men, probably including the Duponts, own shares worth a billion and a-half dollars.

But the outstanding figure in Wall Street to-day in speculative circles is William C. Durant, whose great vision and courage have brought him what is probably the greatest fortune ever made in speculation. Durant, however, has been a constructive force as well, for it was he- who organised General Motors. It was the child of his brain, now grown into the greatest industrial giant of all times.

But he had to part with its control at a time Qf financial stress to the Dupont and Morgan interests. Durant .has been quoted as saying that no man since the world began suffered, so great a loss in one day, for that control at present values would be worth a billion dollars or over. It would be interesting to compare this figure with the value of Japan when in a. former age two rival contestants for the throne of Japan decided the issue by a wrestling match.

But ever since this one defeat Durant has proved himself a master wrestler and has won back hundreds of millions of his former losses, and largely through operations in General Motors shares in the open market. Last winter when the shares hung for months around 125-130, Durant and his following bought them day after day without limit. Finally, and coincident with immense business and earnings, the signal was given, and Dujrant, acting with Arthur Cutten, Fisher Brothers and the General Motors group, headed by Raskob, bought unlimited quantities of the shares, the bears run to cover, and within a few weeks the price advanced without interuption from 130 to 199, and the shareholders of the. corporation, including a great number of the public, were richer by a billion dollars. Another Wall Street record had been broken. Durant is a modest little man, whose favourite recreation is a game of checkers, but a more picturesque character is his principal broker, Benjamin Block, whose firm, Block, Maloney and Co., came into prominence in tho days of the operations of “Bet-you-a-million Gates” and his group of steel magnates. Block, who looks like a Roman senator, frequently dominates the market in special stocks on a busy day, commanding his forces like a general in the field. He owns the famous racehorse Morvich which won for him the Kentucky Derby and was neVei - beaten.

i The firm of Morgans are far richer ; and more powerful than ever before. ■ Following the lead of the late Pierpont i Morgan, the invincible, courageous , and far-sighted giant of Wall street, ; they have been on the constructive . side of the market. Morgan’s contem- . porary and co-worker, George F. i Baker, is still going strong as presi- , dent of the First National Bank at 1 the age of eighty-nine, and, like Mor- > gan, is always a bull on America and ; her industries.