The Portland daily press., 1880-04-13
Our New York Letter.
Revival Of the Mania for Speculation
The Evils Resulting From it-Swindling
Mining Companies.
New YORK Abr. IL, 1880.

verses which have from time to time inter-
posed to dampen the ardor of enthusiasm.
The share market began to get puffed up at
| very early period after the recovery OF the
country from financial depression, and has
| since been swollen to most unhealthy and un-
natural proportions. Stocks of corporations
that haven't paid dividend for half dozen
| years-others that never have given any in
come to the holders, and are so burdened with
mortgages that they are hard pushed to raise
money enough to avert foreclosure at the suit
| of the bondholders, have been sold by the hun
dreds of millions at 75 per cent. of their par
valuation. The distrust engendered by the
panic seems to have given place to blind
credulity that accepts everything that glitters
for gold, and believes that whatever anybody
buys, no matter at what price or OF what
| quality, will assuredly advance so as to be re-
| sold at a profit
The chief evil that grows out of this cond-
ton of affairs is that it disturbs the currents of
| legitimate industry and production. The ma
l MIA for gambling is a serious drawback to the
patient thrift which constitutes the true source
| of popular wealth, and the men who are busy
| watching the tickings of the time piece of the
stock exchange as it registers the vibrations OF
| the market, are not Of much use as contribut-
ors to the increase of the common store. If
| the craze were to extend far enough it would
ultimately put stop to all useful pursuits
People wouldn't plow in the field or delve in
the workshop if they imagined they could get
rich so much faster by stock jobbing But for
| tunately there are far greater number of
these adventures who lose than there are who
gain, and pretty much every one who tries the
dangerous experiment sooner or later IS driven
out of the field with empty pockets and a
wiser head. 1t makes no earthly difference of
course to any but the immediate actors what
disasters may result to those who WOO fortune
after this desperate fashion. The community
is just as we'll off after money changes hands
in that way as it was before. All that Is sac
ritced is the manual labor of the individuals
whose time is so completely taken up with
their bargainings and operations that they
have neither hearth or nerve to do anything
else. But as general rule they are of class
who never were nor could be serviceable to
their race, so that it matters very little what
particular department of uselessness they hap
pen to be billeted upon. The dupes of specu-
lation fret their little hour upon the stage, and
when their funds are exhausted they disappear
from the scene of action and are Immediately
forgotten.
But the great maelstrom which is just now
engulting the surplus means Of the unwary at
rapid rate is the enterprise of mining. There
are nearly two hundred gigantic organizations
in existence in New York alone, representing
nominal capital of some $500, ,OOO. .0O0-a sum
as large within trifie as the entire banking
capital of the United States, national and 10
cal. Parties buy claim in Colorado, Monta-
ma, Arizona or any where else for small
amount, ranging from $4,000 to 800, O,OOO-the
latter figure being exceptionally high. They
issue prospectus setting forth in glowing
terms the quantity of ore in sight, the richness
of the yield, and the certainty Of enormous re-
turns. The opinions of professed experts, of
geologists, and Of experienced miners, are in
geniously woven into the tempting exhibit, and
stock company is launched at a valuation of
from one to twenty million dollars the SUBJ
scribers having the option OF taking what stock
they want at from ten to twenty cents on the
dollar. All the property the shareholders get
for their investment is the privilege of digging
out ore in veins measuring from 800 to 5000
feet in length, and converting it into bullion.
In one instance in every twenty or thereabouts
the undertaking proves successful for a while,
at least, and the outcome is satisfactory. In
the remaining nineteen the result is otter fail
ure. Even the rare cases of good luck prove
ephemeral The Little Pittsburg mine, for
example, has been quoted as a marvel of pro-
ductiveness. Its shares at one time commanded
as high as S33 each, and there were 100000 of
them. That rate would be equivalent to a val
uation of $6,6OO,0O0 for the whole concern
The price was simply fabulous. The bed rock
scale of the property was 100000. The best
of the ore has been taken out, and the yield no
longer sutfices to pay dividends The revenue
is stopped. The shares have fallen to 80 apiece
and something under. But then that is an i'm
mense price. The concern should be worth at
that rate some 81 800, 900! 1t is doubtful wheth-
er any practical miner would be willing to buy
it at a quarter Of that SIM. The Directors
seem to-have had timely advices of the threat
ened collapse, for when it occurred the whole
thirteen of them only held about eight per
cent. of the stock and two of them parted with
two-ffths of the entire issue within seventeen
days preceding the final revelation of the ex-
haustion of the supplies. 1t is great advan-
tage to be in the Board under such circum-
stances. Early information is of so much SER
vice in enabling an owner to sell out before
the decline becomes serious. 1t is not in hu-
man nature to forego such opportunities Ev-
erybody claims the right to sell when he sees
fit to. But people who invest their money in
projects which they cannot possibly keep any
track of or exercise any control over. arc at a
disadvantage which renders the adventure
risky, to say the least of it.
The profits of mining, thus far, have been
made by the sellers OF lodes, not by the pur-
chasors of them; the money has been extracted,
not from the assures in the territorial noun
tains, but from the pockets Of the men who
have subscribed for the shares. The total div
idends that have been declared by all these
companies since their formation are less than
three per cent. upon their apparent capital
The NEST lucrative concerns in the West have
not been capitalized at all, but are worked by
their individual owners The miners evident
ly keep the sure things for their own benefit;
the doubtful ones they permit their fellow-cit-
zens of the East to participate in.
The mining mania is not new thing at all
1t is a disease that occurs periodically and
RACES violently while it is at its height. We
had sad experience of it during the paper
money imitation. 1t prevailed extensively in
1864. Immense sums of money were trans
mitted to Colorado from all the principal At
lantic cities and towns, to buy shares in gold
mines which did not yield ON the average thirty
per cent. of the amount expended in working
them. The prices paid them were very much
larger in proportion than those that rule now
and the difficulties of extracting the minute
particles of precious dust from the solid and
intractable masses of rock in which they were
imbedded was so stupendous that the folly of
attempting the process was soon made
so perfectly manifest that work was
suspended after very brief trial of the exper-
iment, The conditions have changed since
that time, materially. The search now is for
silver not for gold. The ore is manageable, and
in the rare instances in which it is rich and
abundant there is no doubt 1t can be extracted
proftably. There is money to be made in;the
business if it is prosecuted with skill and judg-
i,,x OH