The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1896-03-29

- 90 borrow. O. Nearly MI Colorado
-so.ux stock rs non-assessah1e. II can be
-ssher axessab1e or unreasonable, but
~,,ss show on fits face which way IL has
seen issued a. Colorado mining stock
6 nearly all fun paid
a stranger who has been staggered by
she amount for which the companies are
capitalized n likely to be knocked down
~ the further Information that their
ssock is full paid" But TO say chat the
ssock is 'sfull paid does not mean in Col
orsdo that a hundred cents on the dollar
has been paid into the company treasury
for IT, II means. instead. that the COM
oany at the beginning OF itH operation took
sdyansage Of legal fiction IN an attempt
- shield the purchasers Of It's stock from
se,nu called on for the difference between
he price they paid for II and the par value.
~ buy stock at 10 cents share direct
from the company, the company usually
has the right 20 call for the remaining 20
eerts in installments, as the law provides
.,d the money Is needed But II three
nea organize a mining company in Colo
raSo they DO not proceed In an ordinary
way. Suppose they own claim or claims
which would sell for cash a. not 10 ex-
reed HOOD The company organ
szes with a capital Of 81 90. co. The conn
nany votes that II considers these claims
worth Noo0.000 and gives the entire
amount OF its stock in payment for them.
This stock Il considered 10 be full paid"
Ard Il il supposed that the holder can
never be called upon for any further Fay
,nents on II. The legality Of this met nod
az giving the purchaser of cheap st ock
complete immunity from anything like
assessments has not been fully adtudicatad.
but II Is known that a court VIII not set
aside IAN honest over-estfmate" OF prop
,rty thus exchanged for stock Safety
therefore depends upon the honesty OF the
initial estimate
new million-dollar infant corporation
has no money with which to begin opera
lions. its parents kindly contribute to 1t
= haif or a quarter or some other fraction
OF the full paid stock that goes into the
treasury OF me company and IL called
s.syeasury stock I. is sold for whatever
I. NAV bring and the money goes into the
treasury to be used In developing the prop
srty. Many OF these mdl1ion-doilar COM
r1nies secure only few thousand dollars
.,,n which 10 operate. and IL is clear
,haf a bonanza must be struck and stru"s
soon IN order to make this beegariy cash
Investment result in dividends on such a
Drinceiy array OF capitalized expecta-
atoms A few such accidents nave nap
pened.
The best guarantee OF honest corporate
management is publicity In It's transac-
AZ Colorado. at least those issuing fuzzy
rnia stock, are not obliged to make any
nnbIished reports whatever. Under the law
any stockholder has a right to inspect the
company books. but IL the right - oenieo
uandamus proceedings are slow am unsat-
tsy.ctory. One lawyer told ne re mad been
irving for over a year to get a chance Tor
nj. client 10 examine the books Of a certain
company. but had not reso-tcd TO the courts
because OF their unsatisfactory acton in
such matters. Right can be got through
the courts for a stockl1ld,r to inspect a
mine. hut this process Is still slower ana
more expensive than the other IGrties
have been trying for years TO secure an
opportunity to inspect tue Molly Sibs6h'
but they have not yet succeeded-
Trust companies have recently been or
sanized to provide for me registration OF
mining stocks and to psoteet purchasers
against over-issue and some othe- forms
OF corporate dishonesty. Tie law resusat-
ing these companies is apparently very
GOOD. and II may be hoped that tneir n.nu-
ence, together with that OF :he mining ex-
changes, will give considerable security
10 investors who take the trouble to exer-
Else "a much caution in making their mir
ing investments as they would eNcrcisa n
huying land or raiiroad securities. Such
investors will insist upon knowing some
thing OF the personnel OF companies IN
which they buy stock. for. after all. the
best guarantee Of honest management Is
honest managers-and thore Ii no dearth OF
his class of men In Colorado. For those
who merely want to plunge and take
flyers" there is plenty Of chance FOR sort
in the Colorado mining stocks. and rueh
persons will not bother themselves about
the details of corporate management. They
may come on, like Swedish servant girls
already mentioned, or they may come out
Ike some former mining stock Spectators
who ara now to be found il the wards OF
the San Francisco almshouse.