The Portland daily press. [volume] (Portland, Me.) 1862-1921, 1896-05-08
COLORADO MINING CRAZE.
OF about 1000 Compan les Organized Only
rs Per Cent Amount to Anything.

rs Per Cent Amount to Anything.
(Denver Letter in Philadelphia Times.)
The mining craze has seen its best days,
and is now on the downward grade. One
of the exchanges closed recently, and
some of the brokers on the other. ex-
changes have quit and gone to work.
Preparations were made to extend the
boom until summer, with a view of
catching the spring and summer tourist
trade, but a few unfortunate deals have
destroyed nearly all confidence in the
market. Stocks that have no merit
whatever are given fictitious value by
wash sales, and after being run up to
good figures the manipulators leave the
public with the bag to hold.
In recent attempt to "miik" the mar
ket the public took the hint from past
manipulations, and some OF the brok ers
were caught. Notwithstanding, the
scandal somewhat demoralized the mar
trading public in the exchanges and
brokers generally. In the investigation
that followed the people learned several
things. A broker is not to he held re-
sponsiblc to his customer; he is acting
only as agent, and if the other broker
fails to make good his part of the trade,
the customer suffers. II broker fails
there Is no way by which the exchanges
can compel him to settle with creditors.
AS rule. the broker has no tangible
property, his seat is worth only $500 or
$500, and that would not cover his short
comings It can only be sold by the ex-
change. 1t may be attached by an out
side creditor, but under the rules of tho
board it could not be utilized. 1t is a
value which the law cannot reach,
hedged in by provisions, evidently with
view of protecting brokers who fail.
The matter was tested recently in the
local courts, and the broker won. He
failed owing numerous sums, and still
OWES them.
This uncertainty of realizing on stocks
when sold, Injuries the market to some
extent; because no matter how well-in-
tentioned some brokers may be, il they
make flew bad trades the money Of
their customers goes up with their own.
The lack of oapital.is the reason that
stocks are not bought and sold on mar
gin. 1t is as much as some OF the
brokers can do to pay Office rent and
board bills, much less carry stocks for
customers on margin of even % per
cent. But. they argue, stocks are so
|
just as easy to buy them outright. This
is but scheme 10 fiout the shares in the
East.
The shares have par value of 81 each,
but are sold at from one cent to or 10
cents share. Instead of issuing one
million shares and selling them at few
cents..each. onlyH 10000 shares should be
issued and held at 81 each. This is one of
the mysteries OF the business that the
eastern people generally cannot see
through. The scheme is apparent: To
give the shares a fictitious par value and
sell them at bedrock prices to fasteners
who think that they bought on fat
market, and that the shares will surely
reach par again. But the shares wero
never at par, and perhaps never will be.
The majority OF the companies now
floating shares have only prospect claims
simply On undeveloped claim which
has not produced enough ore to ray the
three or four men who ara working 1T.
Some of these companies have only one
man at work, and he is employed only as
pretense so that the manipulators may
not come within tie meaning Of the law
as confidence operators. These manipu-
lators put out the statement that they are
selling a certain portion of the stock for
| "devel opment purposes THAT is, as fast
as the eastern people buy the shares the
money will be expended in work on the
claim.
Some work must be done in order to
make showing and prevent their arrest
forl obtaining money under false pre-
lenses. So two or three men are put to
worksin the hole in tie ground; but
should they accidentally strike paying
ore the matter is kept secret. The walls
cave in, or the mine fills with water, and
the stock falls to zero. The manipula-
tors buy it in, and then uncover the
bonanza. In California they have an ad
ditional oinoh on the outsider of assessing
Inn out, but under the laws of this state
mining shares are unassessable.
There are SO many tricks in the mining
stock buying business that it is no longer
speculation. The outsider has about
the same chances as he would In lot
terry. In spurchasing mine it is. OF
course. quite different. The owner has
charge of his property, and if he strikes
it rich there is no object in concealing
the fact. 1t he does not, he is the only
loser, and beside he has no share on the
market. Very few of the best mines
have shares on the market, and these
have only a few shares to sell. The com.
panies boing rich, development work con-
tinuss. and is not dependent upon the
number of shares sold, or not sold. in
the East.
About 1000 companies have been formed
since the Doom began. Not % per cent
of the stocks have any real value. The
valuable property, and-they may not;
providing, of course, that the money re-
ceived for shares is.honestly expended in
working the claims, which is not being
done in the great majority OF cases.