The Ely miner. [volume] (Ely, Minn.) 1895-1986, 1905-02-24

value of five dollars share, and a con-
tract was entered into by which the per-
sons who were to underwrite it were
to get the stock at one dollar per share.
Various persons went into the syndi-
cate, with the provision that thew were
to take or underwrite certain number
of shares, paying one dollar per share.
20 per cent. of the purchase price. at
the outset and the balance within GER
tain specified times.
The understanding was, however.
that those who had underwritten the
stock would not pay the one-dollar price
unless the money became necessary for
the development of the mining property.
the promotion of stock sales, and so on.
That is, while they agreed to pay a GER
tain amount should the exigency arise. if
it did not arise they would be so much
more Ito the good"
Resort to Washing.
Brokers who were members of the ex-
change were readily found who were
shares a month, and what they received
was to go 60 per cent. to them and 40
per cent to those who had underwritten
the stock in the beginning. Itwas then
decided that in order to sell the stool,
at a price above one dollar per share
it would be necessary to resort to the
process known as washing
In other words, they agreed to them
selves purchase the stock at a high fig
ure, in order to set that as the market
rate. Par being five dollars, and they
having obtained it at one dollar, they
arranged for street sales at s2.5
and 50, themselves buying at that
rate, in order to show that the stock
was active and to induce the public to
buy at the same price.
In point of fact, so as to make a show
ing of large sales, those who were SELL
ing the stock were themselves bidding
on it, all the transactions being credited
on the books. 1t has been shown that
lured by this system, one outsider
bought $4,000 shares, at from 81 so to So.
In disposing of the stock, Munroe &
Munroe washed" about 5000 900 shares
or more in the process of getting rid of
about 100000 shares, for which they are
said to have paid the company not more
than 100000 in all. The brokerage on
raising this $4,000 is more than $780,
600, because they had to pay commits
sions on the whole 100000 shares.
How Sales Were Made.
The Munroes would give orders to GER
tain brokers to sell and to other brokers
to buy. When they sold they would
get check the following morning, and
then they would use that check, turning
it over to the brokers they had employed
to buy. The result was that December
Z, the day of the failure, they received
checks in payment for the stock sold
the day before, and they used these
checks to pay for stock they had bought
the day before, but when it came to
their paying for the stick they bought
on December Z, they ha3not the money;
the endless chain" broke, the Munroes
went into bankruptcy, IN, all these per-
sons are creditors foI Tie stock.
Before this situation was reached,
however, the Munroes had their day OF
prosperity, or, rather, George cid, for he
is the head and front'o the cOmbina-
ton, even though his brother was SEN
iOr member of the firm. When they
came here they were aggressive and en-
thusiastic young fellows, of the type
that is liked in Wall street, and they
quickly made friends Mr. Loomis was
one of these, and Leach another, and
both of these are names to conjure with
in financial circles. Loomis became
chairman Of the syndicate's executive
committee, and it was through his in
ftuence that the loans were obtained
from the National City bank.
Reputed a Millionaire.