, 1880-02-09

The number OF buyers and sellers Is
larger, and hence, by a natural law,
these industrial Enterprises which de-
mand large capital naturally center at
that point where it can be got the
cheapest AMI the most abundantly.'
But" asked the reporter, :" is there
rot great deal of swindling, of ccr
rupt dealing in mines and with mining
shares, and are not the investing pub
lie likely to be steadily feeced %
1T must admitted" was the an
swer. "that there is great danger that
the lambs will be caught out if they
buy mining stocks. In some respects
it is a dangerous business. You see,
while district will produce bullion
for many generations, single mines are
liable to accidents, AMI may give out
entirely. Under our mining laws q
company can be organized upon a claim
! 500 feet by 800 or 600. After q shaft
is sunk there is liability to numerous
accidents. The woodwork in the shaft
may get on fire; the vein may tempo
rarily or permanently pinch out and
no ore be produced afterward, or water
may get iuto the mine. Under these
circumstances the insiders take advan-
tage of the investors. Dividends stop.
The outside public rush in to sell. The
insiders may drain the water or rebuild
the works, or go through the barren
ground and put the price of the stock
up again. In an address before the
Bullion Club tried to make the point
that mining would never become le-
gitimate business until there were
larger consultations of interest; that
the investor should not have to depend
upon any one hole in the ground;'
that groups of mines should be worked
instead of single ones; then if there
was some accident to the machinery or
a pump broke, or fire took place or
water poured into the mine, dividends
could be continued from the other as
sociated enterprises. Aud l was quite
pleased to notice that the point was SO
well understood as to be widely copied.
1 found my remarks quoted in the
prospectuses of number Of new West
ern enterprises where combinations of
properties were offered to investors
rather than any one mine with its sim
gle shaft, &c. think the day is com
ing when mining companies will issue
bonds as we'll as common stock; the
former representing the plant of the
investment, the stock the more specula
tive element. There is constant diff
Guilty among mining companies due to
quarrels as to which one ore bodies be-
long te. No vein runs down steadily.
1t will sometimes pitch to the west,
but more often to the east. 1t thus gets
into the ground of another mine, and
then there is trouble and litigation"
Mr.. Croly, in what respect does
mine owning here in the East differ
from what obtains in the California
market?'
Well, Eastern investors insist upon
having dividend paying properties;
the Californian cares more for the
gamble He will pay fifty cents or
seventy-ive cents share for pros
pect,' but with the hope that when ore
is struck or the mine developed, he will
get very large advance upon his in
vestment. The fifty-cent share may be
worth $40 in time, but the moment it
becomes dividend paying his interest
ceases and he sells out. Hence, it is
not remarkable that there are probably
not more than three mines on the San
Francisco boards which pay dividends.
All the rest are mere prospects. Here,
on the New York Board, the great bulk
of the properties are either dividend
paying or expect to become so shortly.
Hence there is less huctuation in the
price of mining securities dealt in on
the New York market"
AS the dividends are quite large,
compared with railway investments, is
it not attracting people who have sur
plus wealth to invest, and is there not
likely to be quite furore in mining?'
Certainly there is," answered Mr..
Croly. Why, 1 was looking over the
list the other day and / find that there
are some thirty-five mining stocks pay
ing dividends which are actively dealt
in in our market. These disburse from
five cents to 81 a month, aud l happen
to know there are O quite number
of properties about to be p1t on" (Here !
Mr.. Croly showed the reporter list of
the mines, but said he did not care to
give their names, as it would look like
advertising them, and, besides, he was
afraid that some of the properties were
mere blinds on which dividends were
paid simply to sell the stock and cheat
the public. So any list that he might
give would contain some such wild
cats. Now" continued Mr.. Croly,
&C. think this will tell on the public;
indeed, know it is telling. They see
and hear month after month of stock
which sells anywhere from $40 to $50,
which pays from fifty cents to 81 a
month. Some OF these mines have
done this for two. three and four years.
Then the returns of some of the Lead
vile mines, for instance, are really ex
troardinary. How long they will last
no one can tell, but the figures for