104 THE WORK OF THE STOCK EXCHANGE
eration with the Federal Reserve authorities and many patriotic
security dealers in Wall Street, formed a syndicate to supervise
the initial marketing of Liberty bonds. Whatever the theorist
may allege—and there are theoretical objections to such opera-
tions unless they are skilfully and judiciously conducted—the
Liberty bond syndicate was absolutely necessary to the suc-
cessful distribution of the first and the later issues.
The “Seasoning” of a New Security.—The length of time
during which underwriting syndicates maintain scale orders in
the market to buy and sell a newly listed security varies con-
siderably. It depends in the main upon the attractiveness of
the issue and the general condition of the securities market at
the time. But as soon as an active market has been created for
it and there is promise that its prices will not be violently
deflected by technical conditions in the market incident to its
recent appearance there, the syndicate will gladly withdraw its
buying and selling orders, and leave the new security to go its
own gait unsupported and unassisted. In this way, the process
of “seasoning” the new issue begins.
Pitiless publicity has already been turned upon the security.
Investors and speculators from coast to coast study its merits
and defects. Analytical articles are written .upon it in the
financial and the general press. Its sales on the Exchange are
instantly flashed to the four corners of the United States. In
consequence, the new security at once encounters what has well
been called “the bloodless justice of the market place.” Its
prices will depend upon what the vast investing and speculating
public of the whole nation thinks about it, and will fluctuate
accordingly as these hundreds of thousands of people think
better or think less of it.
Sometimes the result is gratifying to the underwriters and
the original investors alike, and its price either holds firm or
else advances. Sometimes, too, affairs do not turn out so
pleasantly. If any inherent weakness develops in the security
itself, or the government or corporation behind it, no senti-
