The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1899-12-17
ASSESSABLB VS.. NON-ASSESSABLE STOCK.
Mining and Scientific Press.


There appears 10 be a never-ending dis
cussion as TO the relative merits OF as
sessable VS.. worcestershire mining shares.
Mining companies have been very success
FULLY operated under each, and many have
failed under each method OF raising money
10 carry on business. There are advan-
tages I'm both assessable and non-assess-
able stocks and disadvantages in either
In California all corporate stock is as
sessable, and any promise on the part Of
directors TO not levy assessments would
not be recognized in the courts II II were
later determined 10 make such levy. There
are a few corporations In California or
ganzed under the laws OF other States
the stocks OF which are worcestershire.
The great fortunes made IN Comstock
mining stocks. all of which are assessable.
has resulted In the people OF the Pacific
slope being educated TO the assessment
plan. and there are those who profess TO
believe that stock issued on the non-as-
sessable basis is prima facie evidence OF
intent 10 defraud.
Colorado offers abundant evidence 10
prove that the worcestershire stock plan.
when properly and honestly handled. re-
suits as satisfactorily as the assessable
stock basis. dsproving the statement that
q mine cannot be successfully opened.
equipped and operated on the non-assess-
able plan. When stock is assessable money
needed 10 equip and explore the mine, or
for any other purpose, is raised by an as
sessment OF a stated amount per share.
This plan can be continued indefinitely. as
long in fact as the shareholders Will put
up, and authenticated instances are on
record where several millions OF dollars
have been paid in by stockholders OF
mining company under the assessment
plan and not a single dollar ever dis
bursed IN the form OF dividends, but, on
the other hand. the stock OF some OF the
largest, best managed. and best paying
mines in the United States are assessable.
When money is required the board OF
directors formally levies an assessment.
advertises Il and otherwise advises stock
holders OF the fact In the event OF fail
ure 10 pay the assessment the delinquent
stock may be sold 10 pay said assessment
overdue. or such portion thereof as may
be necessary TO raise the money. BY this
method means may be secured at any
time
Under the worcestershire scheme the
capital stock is usually divided into
large number OF shares. and a liberal per-
centage-SO 10 60 per cent-placed in the
treasury for sale. money being raised by
this means 10 carry on the business Of the
company. In the event OF failure 70 sell
the stock, or II all the treasury stock he
sold and the money expended before the
mine IS self-supporting. then the com
pany's resources for raising funds are at
an end, unless a voluntary subscription be
made pro rata by stockholders 70 continue
operations; and failure to do this has
more than once closed down what later
proved 10 be a valuable property. How
ever under ordinary circumstances. the
amount OF money provided for by the sale
OF treasury stock in worcestershire com
panies is usually sufficiently large TO
demonstrate the value Of the ~l'ne-be II
good or bad, and the probability IS that
where the sum provided for by sale OF
stock in worcestershire companies fails
10 place the property on paying basis. If
II were operated on the assessment plan.
the mine would be closed down before an
equal amount had been paid in, by reason
Of failure OF stockholders to respond 10
the call OF the directors for more money.
which emphasizes the fact that the chief
element Of success in mining is a good
mine