The Black Hills union and western stock review. [volume] (Rapid City, S.D.) 1904-19??, 1905-09-29
- THERE'S MILLIONS IN T!"
RonANcEs OF EVERYDAY PROMOTES

promoters who make. high art of thei 5
calling. E
Another field which they love, and I Z
which they are in great demand, Is tn
floating OF sl,D00.O0O or s1O,O 900. 900 in
dustrial companies with about $1,000
In real assets behind them.
Some promoters don't require eveI !
that much in the form of assets. They
are telling a very good little story JUS
now in Wall street o five promoters
who achieved that ideal of the pro.
moter-the %''tiotation' of a company
that did not exist at all.
The tive met one day and compared
notes. The promoting business was
dull. One OF them had a scheme.
Within a month a company was in
corporated. The Loyalty Gold ono
Investment company" Is pretty close to
the real name OF it. 1t was a modest
little affalr-only a $1,000, 900 concern.
shares 500 par. The total investment
in cash was the cost OF the handsomely
engraved stock certificates and the in
corporation fee. The money required
by law to be'paid i'm was paid by one
of the five. who was promptly elected
president, and as promptly took thel
money down" again as his salary, pay-i
able in advance.
None of the names OF the other four
promoters appeared in the papers OIL
the company. With the exception OIL
the president, all the officers were
clerks or humble acquaintance of the
hnanclers. One was a porter. Anothert
was the shoeblack who had been poll
ishing the presidents shoes on credit
for some weeks
Between them the five promoters had
$4,000 III real cash. Each took $4,0O0,l
and within q week the five had opened
accounts with as many big banks. each.
in his " name.
The accounts became highly actiyel
Immediately. Every day each promoter
would draw checks In. favor of the rest.
There We're busy days when each gem
JUS would do a business running up tor
$4,000 or $4,000, and yet at the end OF:
the day the original deposit Of $4,000
would still be In each bank.
In the meantime curb brokers Werej
getting modest orders at intervals OIL
two or three days for Loyalty Gold
Bond Investment company stock. But
there was none on the market-for the.
very good reason that 1t was all locked,
up In a safe. Being unattainable, iti
a certain value, like all other
unattainable things.
When that happy state arrived, q
curb broker who received an order for
200 shares was delighted by learning
that a man was willing to sell that
quantity. But he was coy on being
approached, and demanded a higher
price than the brokers' customer la
authorized. After a brisk negotiation.
the customer agreed to pay the asked
figure.
Then small blocks of the jealousy
guarded stock began to appear. Theyi
were snapped up eagerly. The stock.
began to get a recognized position.
For q year the sales and purchases
or course. Wall street.
n ITr' LnntE flnat ,1I tl~ ,.,~-.
confined to the five promoters and their;
figure-heads. and that all the stock sold
and purchased found Its way back to
the same safe.
Tapping" tho Banks.
1t cost the syndicate a woeful amount
In brokers commissions, gut thai was,
money we'll invested, for when the
stock had reached a respectable quota
ton, the five promoters, honored and
appreciated clients of five large banks
by this time, began to send in large
checks to be certified, and each mar
in turn covered the certification by
placing in his bank all the money that
the other four had.
Now, Decentralization is a very,
very wrongful and unjustitiable thing,
morally and also legally. Yet it must
be confessed that 1t is not an uncom-.
mon weakness, as the world learned
by the sworn though reluctant testi-
mony of certain great national bank
officials recently.
So there came a few days of feverish
business. and the five banks in turn
over certified the five accounts in
amounts ranging from $1,000 to $4,000.
ovcr-certitications were made
good" promptly. Then came another
still more busy rush, and the over-cer~
$4,000 by each bank In turn. And
again they were mad good. by the
very simple method of putting into
each bank in turn the total assets of
the secret syndicate.
But the third time the over-certifca-
ton was on the banks-and unhappy
each had over-certiied to the tune Of
ed" and each promoter promptly In
formed his bank that "a big financial
operation" was on, but" said each,
Il can cover you thoroughly. l have
5000, 900 worth Of stock OF the big Loy-,
atty Gold Bond Investment company.
and ! will put 1t in as collateral to COW
err the certitication."
The banks looked up the quotations,
found that the stock had peer in great
demand by Investors" sighed, accept
ed 1t. and certified the checks.
Next day each of the five accounts,
.~otonously and completely inactive.
After a few more days the five bankers
reproached their five clients for having
become so cold and distant. The Ave
clients replied hat they were up,
against 1t; that they couldn't meet the
Decentralization. but" said they,
you know you nave lots of collateral,
SO you're all right"
Alas! The banks found. that they.
We're all wrong. The buyers of Loyalty
Gold Bond Investment stock, formerly
tearfully for 1t, had vanished
from the face OF the earth. The fivei
promoters vanished, too. temporarily,
though they did this only from an ex-.
cess of prudence, for the banks really.
couldn't dare to do anything except. to
bear their pain in silence.
Between the first l OF promoter.
who fools himself more than he ever
does others, because his schemes re-.
quire too much Imagination for the.
average investor. and the second kind,
who are common ~swindIers, there are
all kinds and degrees.
Promoting legitimate business enter
prises has become a recognized profess
sion. and there are many hundred pros
porous. highly reputable and influential
men in any large city who pose frankly
and undisguisedly az promoters,