Chrysler Pool

When the public hears that a pool is at work in a stock, they are very likely to rush in and attempt to make a few quick points of profit. This is a hazardous practice because usually the public does not hear of the pool until the pool is ready to sell to the public. And it is also hazardous because pools are by no means always successful. Last week came to light the story of a tremendous pool and its unhappy ending.

In October 1929, Chrysler common stock sold at $30. The firms of J. S. Bache & Co. and E. F. Hutton & Co. formed a pool to buy and sell the stock in any amount so long as they did not carry more than 500,000 shares at one time. As usual, the pool was called a. "trading account."

As usual, membership in the trading account was sold to individuals who would let the pool's managers handle all its affairs but who would share in its profits or losses. One member of the pool was William Frank Kenny, rich Brooklyn contractor, faithful friend of Alfred Emanuel Smith, onetime 20%-owner of the New York "Giants" baseball team (National Exhibition Co.). Since Contractor Kenny had been a Chrysler director (1925-28), since Jules Semon Bache and Edward F. Hutton were on the Chrysler board, it seemed that this big pool had a sure future. But last week the Bache and Hutton firms went to Court, said the pool had closed out on July 16, 1930, when Chrysler was $29. Member Kenny, they protested, was the only poolster who had not paid in his loss. It was not revealed how much the pool lost, what Member Kenny's share was.

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