The sun. [volume] (New York [N.Y.]) 1833-1916, 1899-08-23
HOW TO SELL MINE STOCKS.
n. Y. PRENTICE GJTES POINTERS TO
THE PUBIC THROUGE THE SUN,

THE PUBIC THROUGE THE SUN,
Frank Exposition Of the Way Some West
ern Mining Propositions Are Eloated-
"wash" Sales In the Market Hero u
Most Important Factor in tho Process.
A letter to THE Sun from Denver yesterday.
severely attacking Fl. L. Prentice and the
Prentice Investment Company whose Offices
are in the Edison building at "A Wall street.
was read to the officers Of the company by .
Sun reporter. The letter asserted that the
Prentice Investment Company was the In
dustriai Exchange and that stocks that were
worth % cents a bushel on the Exchange In
Denver when the properties they represented
wero known were quoted on the Industrial
Exchange here at fancy figures. and were
being pushed by the Prentice Investment
Company. II. L. Prentice. J. A. Thompson and
B. q. Curran are the Prentice Investment Com
pany. They were all present yesterday when
TIE Sun reporter interviewed Mr.. Prentice
and united In the request that the interview bs
printed Mr.. Prentice said:
You are familiar, OF course. with the way
mining companies and other companies are
foated2"
The reporter said he was not familiar with
the method.
Mr.. Prentice then said that when he and Mr.
Thompson and Mr.. Curran came here from
Colorado they wore the officers OF certain min
ing companies. and the selling agents OF GER
tain others. Tho way the business Is DONE"
he said. rs this: When mining company Ia
organized SO much stock is issued. Say the
property is worth million dollars. The man
who owns the property gets million dollars in
the common stock Of the company. The men
who promote the company get fair commits
sion. They are paid In the common stock OF
the company. All the expenses OF the organic
zation are paid In the same way and then the
company Is ready for work. but there Is no
capital to work with. 30 much OF the stock Ii
donated as treasury stock. Now the proceeds
from the sale OF treasury stock can be used
only for the opening and development OF the
mines. 1t can be used for no other purpose
whatever. and on the proceeds resulting from
tho sale depends the work that can be done.
Now we come In here with nothing but
treasury stock to sell. We had no other kind.
and 1t was our business to sell that and provide
the money to develop and operate tho mines.
We listed the treasury stock on the Industrial
Exchange. 1t was then necessary to create a
demand for II and We followed the custom that
Is used in all casos. I'd say to Thompson.
Let's put up this stock or that stock to-day
and he would go on the Exchange and buy one
thousand shares OF it. The next day I'd buy it
back from him. or I'd say to Curran, 'Curran.
bid this stock up to 10 cents tod day and he'd
offer 10 cents or about that for the stock on
the Exchange. I'd say to Thompson. Put this
stock up to nine and he'd buy l 900 shares at
nine The next day I'd buy 1t back from him.
That's what they call wash sales. They are
made every day on every exchange in the
country. It's the only way a demand could be
created. I'd say to Thompson. Lots make so
and so active aud he'd 60 on the exchange
and buy and sell
Now. don you see the sales and the figures
would be quoted in tho papers and the public
would say. That's pretty active stock. Good
price. I guess I'll buy some OF that and
they'd come in and buy. and demand would
be created for the stock. We'd shut off the
men who held the common stick. don't you
see, for We wouldn't list that on the exchange"
But that stock was Just as good as the stock
you held and sold. was it not?' asked the re-
porter.
TT represented just as much property" said
Mr. Prentice. but don't you see there was no
demand for 1t. Every share Of stock that We
sold was stamped Treasury stock amt treas
ury stock was listed and common stock
wasn't"
Yet the stock was OF the same value when
It came to paying dlvidends?' said the re-
porter.
when 1t came to paying dividends. yes"
said Mr.. Prentice. but before that. one was
listed and the other was not. one could be
bought and sold on the exchange and the other
could not. You see there are only two ways to
get money to develop and operate mine. One
Is to assess the stock and the other is to sell
the treasury stock. Now nobody will buy stock
that is assessable. and SO the only way is to get
the money by selling the treasury stock. and
that is what we did"
Then the only question is" said the report
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