In the. seventies there was the famous Fisk-Gould Drew syndicate in Erie stock; in the same period the clash between this syndicate and Commodore Van derbilt took place. In 1895 Congress recognized one of the most important syndicates ever organized, that composed of J. P. Morgan and Company and August Belmont and Company. The latter represented the powerful foreign bouse of Rothschild. As the re sult of a contract between the government and the syndicate, the latter agreed to deliver to the govern ment over sixty-five millions of gold; one-half of this amount was to come from Europe. No banker or bank could have carried film such a deal single-handed. In 1901 there was the famous Hill-Morgan syndicate, which greNv out of the threatened railroad war betNveen the Great Northern and the Northern Pacific rail roads, controlled by Hill and Morgan respectively.
Shortly after this the same syndicate defended its control of the Northern Pacific against the attacks of an equally notable syndicate, composed of Harri man and the banking house of Kuhn, Loeb and Com pany. The latter syndicate, by buying up the stock of the railroad, first secretly and then openly, suc ceeded in getting a majority interest, tho most of their stock was of the preferred issue. Hill threat ened to postpone the annual meeting till he could retire the preferred stock under the terms of its is suance. The conflict was ended by throwing all the stock- into the Northern Securities Company, which was formed to control the Northern Pacific and the Great Northern.
Perhaps the largest syndicate of bankers ever or ganized to purchase and float a loan was that formed by J. P. Morgan and Company in 1915 to dispose of the Anglo-French issue of $500,000,000 of bonds to be sold in America. The syndicate contained one hundred and seventy-five members.
14. S,yndicate organizers.—As in the case of the majority of important business transactions, syndi cate dealings usually revolve about one person of more than usual business ability. The elder J. P.
Morgan achieved his greatness by early proving his ability to negotiate deals. One of the most interest ing figures in American finance of the generation that was in its prime at the turning of the last century was James R. Keene. That brilliant market manipu lator seemed to have a superhuman knowledge of mar ket movements. He had little difficulty in persuad ing men to join his pools when the purpose was to make a quick profit from a strong bull or bear MOVe ment.
One of Keene's most interesting pools—tho it proved to be one of his unsuccessful attempts—was the Southern Pacific pool of 1902. The syndicate agreement was dated January 29, 1902. According to the terms, it was to expire April 1, 1903, and it was not to becomemperative till 200,000 shares of the stock had been acquired. The total holdings of the syndicate, generally acquired on margin, amounted to 244,000 shares. At the time the majority inter est of the company, consisting of 750,000 shares, was in the hands of the Union Pacific.
In order to "bull" the market, the pool undertook to compel the road to pay dividends instead of using all its net income to provide betterments. When that process of "boosting" the stock proved impossible, the pool began to collect proxies to contest the Harri man control at the next annual meeting. This at tempt, too, proved unsuccessful. Then, two days be fore the meeting occurred, the pool attempted, with out success, to prevent the Union Pacific from voting its 750,000 shares thru. the equity courts. Finally Harriman grew impatient of being on the defensive and made a counter attack, using the pool's own ap propriate weapons. He secretly transferred 300,000 shares to William Rockefeller, with the understand ing that the latter should resell. The market was flooded, Southern Pacific shot downward, and the pool broke up with a loss estimated at $3,000,000.