Dishonest Flotations The Senate Committee on Banking and Currency in
the United States, before which, it will be remembered, a number of eminent bankers had to make sensational avowals, has presented a strong report on the methods employed for floating new issues. One practice shown to be widely prevalent was that of giving to leading politicians of both political parties the privilege of subscribing on more favourable terms than those of the public offer. About this the Committee observes that it " strikingly illuminates the methods employed by bankers to extend their influence and control over individuals in high places." It also comments very severely on the misrepresentation of facts, risks, and past records, which accompanied the popularization of post-War foreign loans among American investors. We have probably nothing in England so bad as the worst of these abuses. But our system of flotations has faults enough ; and the question of excessive margins between what investors pay and what the borrower receives, requires serious examination, as a recent case, notorious in Stock Exchange circles, sufficiently demonstrates:
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