Wheeling register. [volume] (Wheeling, W. Va.) 1878-1935, 1892-01-18
A SWINDLE IN STOCKS
How Millions of Dollars of STOCK
Ceased to Exist.
A BIG SCANDAL IN WALL STREET..
A Gold Nine Valued al Nine Million Dolns
Adruily Turned Over to an sngiAa
Syndicate-Ncthing Len Tor
the Stockholders

New YORK, January 1.-THE San
Sebastian Gold Mining Company, OF
New York, has changed hands. IL has
been purchased by an English syndicate
headed by Sir John Morris, Of London.
just before the transfer was made, the
other day, 4 meeting Of the trustees or
the stockholders OF the company, seven
in number, was held, and $1,000, 600
worth of stock was swept out OF ex-
istence by few scratches OF pen, ana
the New York, Brooklyn and Jersey
City business men, and others
who invested more than $1,000, 900
600 in cash in this mining
company, will never realize dollar on
their investments. This remarkable
transaction took place without the
knowledge OF the stockholders, and at
the present time nine-tenths or those
who invested their money are not aware
that the stock they possess Is absolutely
worthless. But such is the true state
OF affairs, nevertheless, and mining
property that in 1887 was valued on the
New York Stock Exchange at So.O0o,-
600, owing to the high figure at which
the stock was quoted, has been sold TO
an English syndicate, and the stock
holders are left out in the cold.
The san Sebastian Gold Mining Com
pany. of New York, was Incorporated
in 1885, with a capital stock Of $1,000
600. The San Sebastian Gold Mines
are situated in the Department OF La
Union. San Salvador, Central America,
about three miles from the city OF Santa
Rosa. At the time OF the incorporation
OF the mining company such glowing
reports were sent out by the mining ex-
perts and others (and the reports were
not much exaggerated) that the stock
found ready purchasers, and the 32O,-
600 shares issued were sold for from
81 TO S. q share in a short time.
The money realized was invested In
mining machinery, and considerable de-
yelopment work was done at the mines.
So satisfactory were the results that
three years after the company was In
corpOrated S. shares were valued at
from $50 TO S35. This was the price
quoted on the Consolidated Exchange
at that time. But as the work progressed
az the mines 1t was seen by the man
ayers that the machinery put In at an
enormous expense could not be used for
anything but surface mining.
From that time on the mining
stock began to decline. More money WAS
expended IN putting in additional
machinery, but IL was unsuited 10 do
the work for which 1t was Intended,
and matters became worse instead OF
better. The company's resources were
soon drained, and the directors, to keep
things moving, issued debentures on
the property 10 the extent OF $500, 900.
The money was easily secured on tho
bonds issued. but the results obtained
by this money were not sufficient To
keep the concern at par.
Everything was conducted on an
elaborate and expensive scale, and soon
all the resources OF the company had
vanished, and 1t became necessary 20
discontinue operations at the mines.
After the stock had been declared
void, the property was turned over TO
the bondholders as payment for the
mortgage. 1t will be news 10 the trus-
tees, IL IS said, when they learn that
they let property worth several million
dollars slip out OF their hands for $780,
600. Some people say, on the other
hand, that the trustees were In tho deaf
and received bonus for their part OF
the transaction. The machinery alone
at the mines Is worth more than the
bondholders paid for the property.
But the bondholders did not keep the
property long. They wished 20 see the
mines in operation, and overtures were
made TO English capitalists. Mr.. Dob
son being practical business man and
knowing all about the mine, was sent 10
London TO bring the negotiations 20 q
close. He soon fulfilled his errand, and
the mines passed into the hands Of the
London capitalists about four weeks
ago, the price OF tho purchase being
Gli2.OOO. The bondholders, II Is under
stood, will also receive large amount
OF the new stock which will be Issued.
Mr.. Dobson returned on the "City OF
Paris" Friday, January !, bringing With
him the papers concluding the deal with
the Engllshmen.
Arrangements are now being made 10
begin work at once az the mines, and
the men who are now Ia possession OF
the property do not hesitate 10 say that
dividends Of 10 per cent. month viii
be paid, beginning March /, 1899. and
continue at that rate for twenty years
at least.
Every day this week, and for many
months, for that matter, the stock quo
tations on the San Sebastion stock have
appeared among the published quota
tions. The stock during the last week
has been quoted at only 10 cents a share.
There is very little trading IN IL, how
ever. but there has been some. and
when the spectators learn that they
were induced 70 purchase stock that
had been declared out OF existence, the
Exchange may be called upon 70 buy
mn lot Of worthless stock, or the brok-
ers who handled the stock will be called
TO account.
As soon as the true state OF affairs be-
comes known 70 the old stockholders, IL
IS expected that legal steps Will be taken
10 have the sale by the trustees revoked
in the courts. A lawyer, when be heard
~ the steal, said that the people Who
represented the 81, COO, 900 OF stock, and
had probably paid that amount or more
for their stock, would certainly not per-
nit the sslndle, az he called 1t, to go By
without making protest.
Grover Goes Cunning and Fishing
ATLANTA, GA, January i7.-Groyer
Cleveland passed through Atlanta 10
day on bis way 20 the plantation OF
Joseph Jefferson in Louisiana, where
he will spend a week in cunning aud
fishing.
The Best Authorities,
Such as DIR. DIo Lewis. Prot; Cross