The Portland daily press., 1881-10-26

| money market, Clique manipulation, political
uncertainty, any one or all of these may bear
down the selling price OF the shares far peIoW
| the quotation at which he made his purchase
| Seemingly this would upset all of the care
| fully worked out calculations, and, If the VEN
| ture were spread out beyond his power of re-
| tention, might in day involve him in ruin.
| What can William Jones or John Smith know
| concerning the intentions of Gould or Wander
| bilt, and in what way they will tomorrow or
| next week make their great power felt Ia the
| market? And yet, the exercise OF this may
| temporarily, override all other considerations.
| 1t is the man who can hold, and only the
man who can hold to his purchases, who can
| withstand the shock of the great bulls and
| bears of Wall street. The power does not yet
| exist in this country that can, for instance,
| permanently keep below par stock that Is
regularly paying
SIX PER CENT. PER ANNUM
| in dividends, when every outlook jim the COM
nanv's future encourages the belief that these
| payments will not be lessened in their reSu-
| iaritv and amounts Such a stock might be
depressed for weeks and monthssfar below It's
par value, but one who held to 1t would nave
good ground for his belief that IN the eho II
would find its true level. When this time came
his profits might not be enormous, but, on the
other hand at no time would his risk have
been great provided he held the stock IN his
possession, or stood ready at all times to take
It out of his brokers' hands This is what may
he termed legitimate speculation. To go be-
yond this is simply trust in blind chance,
and any one who, by so DOING loses his money,
is no more deserving OF sympathy tnan ne
would be if he had parted with 1t at faro
table: while one who so operates and does not
| lose deserves no other title than that OF sue
cessful gambler.
1t is usually the case that dealings in mining
| stocks are carried on by different set OF
railroad shares While shares in some OF the
copper mines may be said to have well-de-
fined value. growing out of the fact that the
extent of the deposit and the cost OF mining "
and getting it to market, can De estimated
with an approximate certainty thls conul.
tion does not attach itself to the hundreds OF
gold and silver mines which have had their
shares on the market. Concerning these the lg-
norance of the buyer and seller is compiete.
Perhaps the best illustration is found IN the
case OF the Consolidated Virginia, the most
successful gold and silver mine in modern
times. Here was mine in which large
number of people, east and west, had made
large Investments. Their interests were 50
great as to call for and excuse the closest scru-
tinv on their part The owners OF shares on
the Pacific coast were, many OF them, men
who had a practical knowledge of the mining
business No doubt the managing f1rm OF
Flood & O'Brien kept many OF the results Oh
careful investigation to themselves put examl-
nations of the mine were not absolutely pro-
hibited, and it was certainly possible to obtain
noints from some of the great number OF men
who were employed in working it. In short,
there was never mine where the lnducement
to get at the
TRUE STATE OF AFFAIRS
was greater, and few where the opportunities
To obtain ali the information that was to be had
wera better. But in spite of this the deposit
suddenly became exhausted, and hundreds OF
shrewd men. who had passed years in and
around mines, found the value OF the shares
held by them almost completely swept away.
Now it would be absurd to maintain tnat any,
thing like the amount OF Information possessed
concerning this great Nevada mine is held, or
;s obtainable concerning the mines that are
hawked around this city and New YORK. Inere
is no undertaking which has In 1t, to the lnitia7
ted and well informed, so much OF uncertainty
as oold and silver mining. Even to these such
enterprises are lotteries, in which the blanks
far exceed the prizes. 1t is a well-known cal
culation that, in this country, at least % mas
been expended for every single dollar OF gold
or silver that has ever been extractea iroIn tne
earth; and when one takes into account the
enormous yields of some OF the newly-setted
districts such as California, for example, the
magnitude of the flater losses that must go 70
make nm the proportion becomes manifest. III
is not too much to say that not one in twenty
of the gold and silver mines whose shares are
held by our citizens will ever pay back to them
tha money the stock has cost them, by direct
profits from mining. The truth Is, that WneR
4 mine is discovered in Arizona, COLORADO or
Montana. WHICH HAS III ~, W euO WCtk
ed the possibilities of great profit, the discov-
erer is not compelled to travel 700 or 5O0O
miles to the East, to find people willing to III
terest themselves in it, and advance the money
needed for its effective working. There is al
yays sufficiency of capital ootainaple near
| home for any mining work that is peculiarly
nroTnising Consequently it is safe to assume
that the mines that find their way into our
market are those which capitalists on the spot
will have nothing to do with. Ihere may %
aoo hut fhaUt az QYfHntiOnS
| which only prove the rule. For these reasons,
sneculation in mining shares has nothing at all
to saw in it's defence. The buyer IS precluded
from using Judgment, from the TACT that ne
has not the data needed to form SOUND opln-
ion. and from the consequent circumstances
that he has not the long training ana lntlmate
knowledge of the business needed to form
\ sodnd opinion, even when the required data
| are obtainable To buy these shares indicates,
in 90 cases out of 100, an entire absence OF COM
mon nrndence and business sagacity on the
| part of the purchasers. 1t is not ike putting
| one's money at risk at gambling table where
| a game is played son the square" 1t much
| more resembles "bucking the tiger, Wnen
| If he can. That is to say, although the dealers
| in mining stocks may be perfectly honest, ana
| NAV let the purchaser have all the information
| they possess, yet the odds are overwhelmlngly
| against fortunate purchase.
That vast fortunes have been made out OF
dealings in the stocks both of railways and
mines may be admitted, without in any way
| impairing the force of the argument that has
been advanced. The money that is enabling
| Mrs. Maekey to give entertainments tnas are
| the talk of Paris and that has carried Mr.. Fair
| into the Senate of the United States, was made
| much more largely from stock operation tnan
| from the outputs of the California and Consoli-
| dated Virginia mines But will any speculator
here pretend that he occupies posltion analo-
| gous to that which these men held, a Jew years
| AGO. when the Comstock lode was the wonder
| Of the world? The market then went up and
| down at their bidding, and at either turn they
I were in a position to draw In the money OF
those who did not possess the 1aclllties Oh 1n,
| formation which were at their command In
| other words, the host of small spectators were
| at their mercy. If man was so fortunate as
to sback the bank, as it is termed IN faro, that
| is, play in the same way that those VINO are
| making thesgame play, he might share part
| of their luck. Now in faro it is evident which
way the bank is playing, but In these specula-
| tions in the San Francisco Stock Exchange, no
| one could tell what the game OF the Flood ana
| O'Brien ring was, and it was only py luck gnas
| an outsider happened to fall in with them In a
Somewhat similar manner the great operators
| in railroad shares have an
| ADVANTAGE OVER THE SMALL FRY,
and one which has enabled them to make
vast amount of money. In the Count Oh monte
| Christie NJ Dumas showed what power man
| in his day had who possessed few million DOL
| lars: but nowadays men work upon our STOCK
| exchanges with backing of tens OF millions OF
| dollars Take the case of Vanderbilt, with his
forty odd millions of dollars invested In gov
eminent bonds, he is able, by borrowing from
savings banks and other loaning institutions,
all over the country, to possess himself, at al.
most any time. of more than $3O,OO0,0OO OF
| money. which he can lock up in any safety de-
posit vault that he chooses. Ii this is not sum
cient. he can still further contract the currency
bv pledging as collateral his shares and other
securities The result is that money instantly
| becomes an article difficult to obtain and
| Speculative stocks, whose quotable value Is
easily influenced, drop off greatly in price. a
man who has his grasp'on theicirculating medl,
um can buy what he needs, let loose his hoard
of money, and when, in response to his expan-
sion of the currency, prices fly up again, can
sell ont and realize handsome profit. There
is lust now a controversy going on among 1n-
ancial authorities in England as to whether
the stringency in our money market Is due to
an artificial locking up of the currency, or to
natural and periodical causes. In all probabil-
ity it is due to both. If Mr.. Vanderbilt and
his friends wished to influence the national
currency, it is pretty certain that they woaid
take as a time for carrying on their operatlon a
| period when their labors would be assisted ~
the demandsof ordinary business; Inc wealth. .o u
lRt ~