The daily morning journal and courier., 1903-09-11
THE FAKE OIL PROSPECTUS.

ties in Texas in the spring of 1901 led to the formation of scores of "get-rich- quick oil companies in different parts l of the United States. These companies have filled the papers with glittering advertisements of shares that could be I purchased for five to twenty cents on l the dollar but which, in a few days or weeks, would increase twenty to a hun dredfold in value Prospectuses have been scattered broadcast which have told in glowing terms of the immense profits to be made in a year or two. Stock certificates by tens of thousands, representing the finest specimens of the engraver's art, with pictures of der ricks at each corner and tiers of mar rels in the background, have been is- sued to the gullible. The average Amer ican citizen likes to be humbugged, and the fake oil company promoter has, since 1901, given such citizen the best l opportunity he has had for years.
 The available assets of most of these .i companies consist of little more than a I jsuperb allowance of gall and a hundred or two. dollars invested in prospectuses I anu 0IOCh SGIllllCdlGS. A AlulhlbIA " Vt these companies bought room enough on the crest of Spindle Top hill, near Beaumont, Tex, for derrick to stand upon, leased or bought a small tract of wholly undeveloped and probably bar ren territory somewhere within a hun dred miles radius of that noted field, put down a single productive well on Spindle Top, and then promulgated the } news in all ways possible that they had brought in a gusher,' and that the l proceeds from the sale of the two hun dred thousand dollars or more barrels which it was daily producing, and of others which they would soon bore, l would make millionaires of all the stockholders in the company.
 I No more palpable fraud was ever de- vised to separate the citizens from his I hard-earned dollar than these rnush- room oil companies, Not one pefson in l ten thousand will ever get a cent of div 6I idend on the stock he has purchased. Not one in a thousand will ever again I see the principal he has invested. The l oil sharper finds it a great deal easier l and more profitable to sell the highly I engraved certificates of stock than to .l drive oil wells or to develop any actual 'l oil property. The Oil City Derrick, in Ecommentfng on the multiplicity of such 4 companies, has well said; There are j honorable exceptions and companies are in the field, officered By gentlemen l of the highest integrity, with no other ipurpose than the prosecution of legit-
 
 I They can be enumerated with ease, identified without difficulty, and indica- l ted by the. fingers of one hand The square companies have no stock for sale. All the rest are fake organiza- l tions, or, what amounts to the same thing, organizations on paper, with nc assets except the green goods in which they deal-in this instance green-tinted lpaper called certificates which might as well be sawdust or paper waste So far as current value. is. concerned" y
 If such companies had confined their operations to Texas, little would be said labout them by me or in my reports, but several of them, organized in Chicago land elsewhere, have bought up or leased
 small holdings in Indiana, and have been selling their worthless stock to cit izens of this and adjoining states. One Il of these, located in Chicago, leased 32t acres near Wilder, Ind. and then issued Ian attractive prospectus, one of the Jmain features of which was portion ot 1.-the report on the Jasper county oil l Ifields, made by this department in its lannual report for 1900. The paper, as lprepared and published by me, was ir
 this prospectus garbled in every con. Iceivable way to make 1t conform to the
 best interests of the Chicago Oil compa- lny. Words and whole sentences were
 omitted or changed, as the interests ot the said company demanded. a
 Il Their prospectus stated that they had Iseven producing wells in operation
 with an output of seventy-five barrels daily, and that the net profits from the
 output of these wells in one year would
 be one hundred thousand dollars, and from one hundred wells, which they ex- lpected to sink, six hundred and seventy five thousand dollars a year. MT. c. K l McFadden, of Geneva, Ind, the we'll
 known superintendent of the main Jas lper county field, recently visited, with.
 out making known his identity, the of- fees of this company. '. 9 "A
 l From his letter to me regarding this visit, I quote as follows:
 Never in my life have seen such 8
 brazen and deliberate steal attempted by people who put up an outward ap. lpearance of responsibility and honesty
 Their statements, almost without ex. ception, were absolutely false, and in. stead of having a production of one hundred and thirty-flve barrels daily
 my field superintendent informs me
 that the total production from their swells would, in his judgment not fill a teacup with oil in twenty-four hours
 pumping, and that their oil which is fused for exhibition purposes, must have
 been taken from either our tanks or from those of our neighbors."
 l Another fake oil company, locatedAin New York city, but incorporated under the laws of South Dakota, has also sent
 out an attractive prospectus, stating
 that it has secured three hundred and twenty acres of land located in Indiana, Iseventy-five miles from Chicago; that it proposes to sink four wells toseach acre;
 which wells will average two barrels
 daily. This product, when sold at two dollars a barrel, will yield net profit lof nine hundred and sixty-seven thou-