Perth Amboy evening news., 1906-11-23
BY Mr..
GUCGENHE|M.
Has Something TO Say to lnves.
tors in Mining Stocks Which
Are Now Flooding Market.

has diTSduy ISdCllSu pGOpOTllOuS Cult
parable with the disastrous ~specula-
ton in the late sixties.
Every day sees a new stock added
to the swollen list, and, as in the
old boom days when the big strikes
in the boanza mines of California,
Colorado, and Montana made a mar
ket for any kind of paper represent
ing a hole in the ground, the fabu-
lous tales from the new silver field
in Canada have whetted. the popular
appetite to the point of taking every
thing hat is offered.
Last week eighteen new mining
stocks appeared on the curb market,
and 1t has been estimated that the
total face value of the shares issued
so far this year in the United States
and Canada fots up to $500, 900, 900.
The mining boom of the sixties
burst almost in a night and wiped out
millions of paper profits. Those who
follow the trend of events in WalE
street see every indication of disaster
ahead for the present fever of spec
u~lation, which is absorbing stocks Of
problematic value at steadily rising
prices.
Daniel Guggenheim, president of
the American Smelling and Refining
Company, and head of what is per-
haps the largest consolidation of min
ing enterprises in the world, gives
this word of warning:
1.-THE fiimsy character of the ma
jority of the mining stocks that are
now finding a ready market cannot
be too emphatically stated" Mr.. Gug-
genheim says. "The public hears of
the development of great values in a
mine which experts have proved be-
yond g~uesswork, and overnight a
market is created for shares in any
company that can be incorporated to
cover property adjacent, OF even in
the same district. Even where there
are undoubtedly surface indications
of ore values, it should be borne in
mind that / in 800 is a conservative
estimate of the proportion of pros
pects that eventually fulfill their
promise. In the Cobalt field, where
the purchase by our interests of a
large share in a mine at a price which
puts the valuation of the property at
$25, 900, 900 has stimulated an m
mense popular speculation, the name
of Guggenheim has been harnessed in
market gossip to properties without
number with which we have not, and
shall not have, any connection.
1.-The two hundred and ninety-nlne
failures are forgotten in the n sue
cess, and that one is made the bait
with which the public is tempted 10
three hundred more ventures. A
great scientifically conducted mining
enterprise is able, through the work
of it's engineers and biologists, if not
to deal in certainties, at least to limit
the chances of failure to the terms
of the human question"
Copper Promoters Active.
The coming of the new silver
tocks into the market has not damp
ened the efforts of the copper pro-
moters. The rising price of the met
al and the consequent increase in
the earnings of the established cop
per properties has helped along the
fotation of an enormous crop OF cop
per prospects" in which the securl-
ties of developed mines with records
as dividend payers have been buried
out of sight. Daily news OF fabu-
lous strikes and reckless statements
by mining engineers of the probable
values indicated have stimulated pop
ular interest in these shares, of when
thousands are unloaded on the pubic
every day at prices that are easily
manufactured by familiar methods
on the curb. Along with this move
ment the legitimate producers nave
been carried up, and many old mines
of low grade ore that could not make
expenses w years ago are now sell
ing above par.
The fluctuations in the price of the
metal are entirely left out of con-
s%ideration, and it is forgotten thai
a property which can show earnings
on twenty-two-cent copper might
easily be a loser with the metal at
10 cents, the average price for the
past ten years.
Speaking of the need of caution,
even in the purchase of the stocks of
established mines, Mr.. Guggenheim
makes the cost of production the only
safe test of values.
"In buying into a mining proper
ty." he y ''the investor should as
certain the absolute cost of produc-
ing copper at that mine, and base his
purchases solely on that"
Those who follow the curb market
date the beginning of the present spec
ulation back to the opening OF the
gold camps in Nevada, two years ago,
Up to date these have turned out LOT
public consumption literally nun
dreds of millions (face value) IN
stock issues, only an infinitesimM MI
nority of which are now dividend pay
ing.
A specialist in these Nevada gold
issues estimated that out OF 300 miles
in one camp fully one-thlrd were
foated without any basis OF ore val
ues. These stocks have had little
mi NJ n a