Tonopah bonanza. [volume] (Butler City [i.e. Butler], Nev.) 1901-1909, 1902-03-01
NoN-ASsESSABLE STOCK.

uAlN anu, anu Non ASSeSSaOlS.
The above catchy sentence is what
often attracts the eye of the would
be investors in mining securities
when looking at beautifully engraved
mining share certificates or when
CHANGING over the prospectus of a
mining company DESTROYS of building
up its bank account by the sale of its
treasury stock. We have known in
stances where worcestershire mining
companies have been eminentlv sue
ceSSful in the transformation of their
prospects into producing and paying
mines. As general rule, however.
more companies, three times over,
have been swamped, financially aud
otherwise, by having this non-aSSeSS-
able clause in their articles of incor-
poration, than have met with sue
cess with their fully aid an non
aSsessable' stock.
As an instance Of the difficulties to
be met with by mining companies
whose stocks are worcestershire. The
Mining Review will cite a case which
has come under its notice Of late.
This company, owning a group in one
of our most popular mining camps, a
group covering known and Well
defined ledge, had no difficulty. sew
eral years ago. in Gisposing Of its
treasury stock to eastern investors.
the suppoSitiou being that the rev
enue from this source would be sui
ticient TO develop the mine and place
ii upon producing and paying basis,
This, however, proved 70 be a mis-
taken idea, although the mine had
nearly reached the paying point
when finances reached the low ebb.
Application at the banks for aS>is-
lance proved futile. as, being non
aSSeSsable. no means were available
for the raising Of funds for the re
payment Of the loan at maturity Of
the mortgage or bond, the banks re-
fusing to make advances unless the
stock Of the company were assess
able or unless the officials Of the CON-
pany became responsible for the
debt Under these circumstances
the company was obliged To diScon-
tiuue operations, and to-day its
promising property is idle and prom
iSes to remain in this condition for an
indefinite period. although a few
thousand more expended in lis de-
velopment and operation would soon
place it among the regular producers
Of the camp,
Under these circums tances the
question naturally arises. what Is
the stock O. the company worth to
the holders?' The answer would nat
urally be, lit IS practically worth
less. To reap his harvest in the
fall the farmer must SOW his seed in
the spring To place a mining pros
pect on producing aud paying basis
the property must De developed
The shareholders cannot expect dis
interested parties to put up the
money for this purpose for him II
the prospect is worth anything it Is
worth developing Unless this is
done, the shareholders has nothing Of
value, and if he is not willing to pay
his prO-rata for the exploration AID
equipment Of the mine, he cannot
expect others to do so for him. As
the stock is Ron-asseSSab.e. he can
not be assessed. Because it is non
assessahle it would be difficult to find
a banking institution that would make
his company loan, and should q loan
be obtained from private individuals.
the chances are that the title in the
mine would eventually be vested in
the mortgagor, as it takes time.
even with plenty Of money on hand,
to make paying producer out Of
prospect, and companies are almost
always Incorporated upon such ra-
Their than upon producing mine.