Yorkville enquirer. [volume] (Yorkville, S.C.) 1855-2006, 1905-09-12
CROOKED MINING COMPANIES.

ner and costume coats.
CROOKED MINING COMPANIES.
Promoting More Profitable Than Salt.
ing Ever Was.
Sailing a mine and unloading it upon
some tenderfoot is regarded as very
bad form in the west now, says Den
yer, Colo, correspondent Of the New
York Sun. The modern method is to
incorporate 1t and scatter the beauti-
fully engraved certificates as widely as
possible. The new way Is much cas-
Ter, more profitable and less dangerous.
The insidiousness Of the mining
stock gamble lies in the cheapness with
which one can get In. In hundreds OF
cities in the west are located one or
more mining companies with inflated
capital-anything less than a million
Is looked upon with derision-and
shares are offered all the way from
one cent to twenty apiece. The most
alluring literature Is scattered broad
cast and many agents are employed on
commission to sell the stock. For $25
or $50 enough engraved stock certifi-
Gates to paper a reception room may
be secured, and there are few men who
are not willing to risk that sum upon
the turn Of fortunes card. II they
win they believe that they will make a
killing If they lose, well, no matter
It was a good bet, anyway.
Immediately after the discovery Of a
new gold camp the mining stock swim
dlers get the busiest. For a hundred
dollars the shark. can buy or locate In
the vicinity Of the new camp shreds
and patches Of ground that have no
present or prospective value as mines.
A mining corporation, with an attrac-
tive name and a million or two Of cap
italization, Is formed. A few friends
are called In and a set OF officers and
directors Is selected. They at once
negotiate a deal whereby all or nearly
all of the stock Is turned over to the
owners Of the claim In payment for 1t.
Then whatever stock Of the company
has been issued Is owned by the pro-
moters, while the company has the
claims. II cthe latter cost $1,000 and
the stock issued 100000 shares, Is
sold at an average Of five cents the
cleanup is close to 100000.
All Of this, however, Is not velvet.
There must be extensively fitted up
offices, a corps Of clerks and steno-
graphers, advertising expenses and
| various little details to be covered.
All of which cost money. The whole
object of the campaign is to get rid OF
the stock quickly. A year Is the usual
limit.
There are many legitimate mining
brokers but there are harpies In abun-
dance also. 1t Is difficult, save through
experience or previous careful inqui-
ries, to distinguish the real mining
broker from the sham. The latter Is
close imitator. He, too, controls
some brokerage or financial company
and he, too, advertises his sole busi-
ness as the handling Of sound stocks
of proved value Oftentimes a group
Of these sharks will organize half
dozen companies. One Is thus able to
guarantee to inquirers the solvency or
the legitimacy of another, and by free
ly commenting one another's PROPOSE
tions help to swell the number OF
suckers.
&. Many Of these mines are located In
territory that has been prospected and
found to be practically worthless
Any one can ride out. put up notice
saying that he has discovered the
| Little Monarch" that he claims 15O
by 1900 feet in a northerly direction
that he claims sixty days In which to
do the assessment work and thirty
days in which to file notice with the
county clerk. or recorder. In few
hours he can stake off a half a dozen
claims, and within sixty days he can
get hole put in each one for $25.
II he is impecunious he may go to
friend and tell him that IL he Will
put up enough money for the floating
of the corporation he will make him
president and give him half Of the pro-
motion stock. Half Of the capitaliza-
ton will be taken as pay for the pro-
motion and the remainder Is sold as
the treasury stock.
Another plan of operation displays
remarkable financial ingenuity. A
shark will go into a district and get
an option on piece Of worthless
ground for a few hundred dollars. He
organizes a company.but as a guaran-
tee of solidity announces that 1t Will
be incorporated only when the sale or
the stock has been assured. AS the
head of the proposed mining company
he makes a contract with the broker
age company, in which he Is also in
terested, by which the latter gets 90
or 20 per cent, commission for selling
the treasury stock. After the work
ceases on the unpatented ground, the
claim reverts to the government and
Is open for relocation by the first COM
er after January l following. II 1t
should happen that one Of the claims
located by these sharks shows indica-
ton Of giving good returns in ore as
sessment work will be abandoned and
the claim quietly relocated by the
shark himself Instances have been
known also where small dividends
have been declared and paid out of
the money received for the sale of
stock. This often proves a good in
vestment for the promoter, since the
receipt of a dividend Is likely to cause
a good demand.
Promoters always strive to retain for
a time a controlling interest In their
corporations. This is done through
the retention Of the promotion stock,
usually half Of the amount issued. II
the prospect is developed and proves
a paying one 1t Is done upon the money
furnished Dy the purchasers Of the
treasury stock. but the promoters get
an equal dividend upon stock that cost
them only the preliminary expense. If
It proves a failure, the promoter, the
man on the inside, has the chance to
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