Los Angeles herald., 1905-12-07
GAVE WARNING
TO INVESTORS
CONSUL GENERAL PARSONS
LAST REPORT
Americans Should Not Invest in Mexi.
can Enterprises Except as
Result Of Personal In
vestieation

Consul General Parsons of Mexico
city, who was killed by an electric car
Tuesday night, had Just finished his
series OF reports on the American and
Mexican frauds In Mexico. His final
report, which was very brief and In the
nature of a warning, was received from
the state department at WASHINGTON
yesterday by mining brokers' and in
vestors in Los Angeles. The state de-
rartment introduces the report in these
words:
Consul General Parsons of Mexico
City, who has been flooded with letters
from persons throughout the United
States making inquiries in regard to
mining and agriculture in that country,
after careful investigation sounds the
following note of warning that should
be needed by those who contemplate
making investment In Mexican enter
prises. This may be regarded as sup
Elemental to Mr.. Pai sons report pub
lished in consular and trade reports
for November IL, in which reference
was made to fraudulent American COM
panies operating in Mexico" -o
Consul General Parsons said: g..
Americans should not invest in Mex
lean enterprises except as the result OF
personal investigation or from a report
known to be reliable. They should not
conclude because reputable banking
companies in the United States act as
trustees for Mexican enterprises that
shares of stock in such concerns must
have value, as these trusteeships as a
rule have no bearing on the soundness
Of the proposition or the value of the
stock, which may be absolutely worth
less.
CIoaked Designs .....
Promoters of the rankest frauds iir
Mexico usually seek TO cloak their de-
signs with some degree of respectable
ity by getting men of reputation and
wealth in both countries Interested In
their enterprises. The promoters have
printed In their circulars names OF
many distinguished Americans as
vouching for their business ability and
integrity, ana then trade and sell the
stock on the strength of the names,
with a knowledge that the enterprise
is a fake. These names are generally
obtained by the willy statement of the
promoter who promises great returns,
and frequently the names are used
without authority. - : =
Shareholders in an American enter
Prise operating in Mexico should not
place much reliance on the reports OF
their fellow shareholders who have in
spected the property supposedly for
their benef1t; they are often misleading
and inaccurate, and prospective or
actual investors should not make much
of the fact that leading business men Of
their locality are interested in such en-
terprises. Frequently, enormous sumo
have been paid to micdlencn for con-
cessious that could have been secured
from the government for 300 to $1,000.
Management
"In the organization of enterprises
in Mexico more attention should be
paid to the question OF management.
Boards of directors in New York. chi
cago. ST. Louis or San Francisco can
not know conditions in Mexico sufii'
cientfy we'll to direct in detail affairs
that demand personal attention. This
APPLIES particularly to tropical agricul-
turai enterprises many of which pay
unearned dividends for advertising pur-
roses, while other companies declare
gross profits as dividends and then seek
to convey In their advertising matter
the impression that such dividends were
earned.
unfortunately large share OF
American subscriptions to these fraud
ulent Mexican enterprises comes fror1
school teachers, common laborers or
others who cannot afford. to lose their
money" '.' "''' -, '"'',.