The Columbian. [volume] (Bloomsburg, Pa.) 1866-1910, 1905-08-31
WILDCAT MINING SCHEMES
Methods Less Dangerous and
More Profitable at Present
MINES ARE WORTHLESS
Cheapest Form of Stock Gambling
If Property Should Prove Valuable
the Crook Rclocates it--Promoters
Strive to Retain Controlling In
terest In their Corporations.


terest I'm their Corporations.
Immediately after the discovery of
new gold camp the mining stock
swindlers get the busiest. For
few 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 pros
pective value as mines. A mining
corporation, with an attractive name
and a million or two of capitaliza-
ton, Is formed A few friends are
called In and set of officers and di-
rectors Is selected. They at once ne
gotiate 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 COM
pany has been issued Is owned by
the promoters, while the company
has the claims. If the latter cost
$1,000 and the stock issued, 2,000,-
600 shares. is sold at an average OF
five cents the clean up is close to
100000.
All OF this, however, Is not velvet.
There must be extensively fitted up
Offices, corps Of clerks and stenog-
raphers, advertising expenses and va
rious little details to be covered. All
OF which cost money. The whole OBJ
ject Of the campaign Is to get ri of
the stock quickly. A year Is the
usual limit.
10 cit to f,,i,
brokers but there are harpies in
abundance also. 1t is difficult, save
through experience or previous care
full inquiries, to distinguish the real
mining broker from the sham. The
latter is a close imitator. He, too,
controls some brokerage or financial
company, and he, too, advertises his
sole business as the handling OF
sound stocks of proved value. Oft
times a group of these sharks will
organize half dozen companies. One
is thus able TO guarantee to inqufrers
the solvency or the Legitimacy of an
other, and by freely commencing one
another's propositions help to swell
the number OF suckers.
MANY vi lHeSt mines are lOcdleu III
territory that has been prospected
and found to be practically worth
less. Any one can ride out, put up a
notice saying that he has discovered
the Little Monarch" that he claims
15) by 1900 feet in a northerly di-
rection, that he claims sixty days in
which to do the assessment work
T.; 4 t.
tice with the County Clerk or Re-
corder. In few hours he can stake
off half dozen claims, and within
sixty days he can get a hole put in
each one for $25.
II he is impecunious he may go to
a friend and tell him that If he will
put up enough money for the float
ing Of the corporation he will make
him president and give him half Of
the promotion stock. Half Of the
capitalization will be taken as pay
for the promotion and the remainder
Is sold as the treasury stock.
Another plan of operation displays
remarkable financial ingenuity. A
shark viii go into a district and get
an option on piece of worthless
ground for a few hundred dollars.
He organizes a company, but as
guarantee of solidity announces that
1t will be incorporated only when the
sale Of the stock has been assured.
AS the head Of the proposed mining
company he makes a contract with
the brokerage company, in which he
is also interested, by which the latter
gets 90 or 10 per cent. commission
for selling the treasury stock. After
the work ceases on the unpatented
ground, the claim reverts to the Gov
ernment and is open for relocation
by the flrst conner after January l
following. II It should happen that
one OF the claims located by these
sharks shows indication OF giving
good returns in ore assessment work
will be abandoned and the claim
quietly relocated by the shark him
self. Instances have been known also
where small dividends have been de-
clared and paid out of the money re-
ceived for the sale of stock. This Of
ten proves good investment for the
promoter, since the receipt or a dlv1-
dend is likely to cause a good de-
mand.
Promoters always strive to retain
for a time a controlling interest in
their corporations This Is done
through the retention of the promo
tion stock, usually half Of the amount
Issued. If the prospect is developed
and proves paying one 1t is done
upon the money furnished by the
purchasers OF the treasury stock, but
the promoters get an equal dividend
upon stock that cost them only the
preliminary expense. II 1t proves a
failure, the promoter, the man on
the inside, has the chance to unload
his stock before the public hears Of
the hzzling out.-Philadelphia Rec
ord.