Hot Springs weekly star. (Hot Springs, S.D.) 1892-1917, 1901-05-31
LIKE FLEECED LAMBS.
CONDITION OF MANY INVESTORS
IN TEXAS OIL STOCKS.
The Ri. Companies Can He Depended
Upon to Control the output-An I'm.
mense Amount of Stock Sold which
Is Probably Worthless.

The oil craze in Texas has subsidized to
such II degree us to cause many people
to look into things in IL practical man:
ner, and the outlook to the great ma
jority is not very promising. Fortunes
have been made and more will be made,
but the small investors will have to pay
tor them. Among this class IRE the thou
sands Of widows, sealnstresses, clerks,
children and domestics. They nave pour
ed their savings into the treasury Of
some II or more of the speculative oil
companies and have had visions of great
and expected quick returns. They are
sure to be disappointed. Experiences Of
others in the past in chasing wildcat
schemes held forth no lessons or warm
ings to them.
Nearly 300 "oil companies" have been
organized in Texas during the past
month, says Il Beaumont correspondent,
and it is estimated by u prominent pro-
moter that 90 per cent of them will
never pay Il dividend. About 10 out of
every 100 have something bordering on
the substantial to offer to the public in
the way OF a speculative Investment, but
the others have nothing more than Al
little tract or two of land, bought for a
song, which is situated somewhere in
eastern Texas, and around which no eff
fort has ever been made to find oil. They
may strike oil, no one can tell anything
about that, but their chances are small,
and If they aver do their stock has been
watered until no oil we'll in the world
could pay interest on the investment.
The promoters. however, come out all.
right. for they get big cash bonuses out
of the treasury from the funds realized
from the sale of stock, so it does not
make very much difference to them
whether oil is struck or not. Then, there
are the heavy salaries of the officers to
be paid all the time the stakeholder is
waiting for the we'll, if any is cve1
bored, to get down far enough to even
hope for oil. In the meantime it is prob.
able that the small investors are working
and saving so as to be ready to grasp ut
some other bubble which may be form.
cd from speculative soapsuds.
Facts and Figures.
1t must be remembered that the great
majority of the small investors are rep
resented in the small companies. The
big companies. the ones which will make
the money and control the output, are
owned by the people who nave plenty OF
money and do not find it necessary tc
advertise their oil stock for sale. Now.
a tirst-class gusher in the Beaumont field
has been selling for $1,25O,OO0. 1T will
require another million for pipe lines aud
:s.Ekage and Il quarter of a million foy
other expenses before fuel oil markets
have been opened up. If the gushers
would continue to gush as they are now
doing everything would be profitable to
the owners, but sooner or later the pumps
will have to be applied and then divi.
dends will decrease. Even then it might
be possible to pay interest on the INIT
ments of the big companies, but the pros.
poets of the smaller ones are exceeding.
ly gloomy.
Most of the other companies are cap.
italized from 100000 to 100000
Their stock is sold way below par and
when the promoters get through with the
treasury funds but little is left for de.
velopment purposes. Should these small
companies strike oil and should the flow
average 100 to 200 barrels a day, which
would be n big we'll as wells go, the ques.
tion then arises what would they do with
the product? The big gushers, ever after
the pumps are applied, will supply all the
fuel oil for which there is n market fol-
many years to come, for it will be n long
time before coal will be generally sup.
planted. The gusher companies will be
amply provided with pipe lines and tank.
age and the smaller companies will be
completely at their mercy, even granting
that some one big concern does not come
in I'M secure control.