The Birmingham age-herald., 1906-12-09
CENTERS IN CURB MARKET Adventure of the Guggenheims With Nipissing NOW BEING CRITICISED
 
Sudden Collapse of Nipissing Has Made Spectators Shy of Invest ing Money in New Mining
 Ventures Floated.
BY w. G. NICHOLAS.

New York December S.-The real in- been not in the stock exchange but in the curb market. The big slump in the shares of the Nipissing Mines company the star Cobalt property as a result Of the refusal of the Guggenheims to take up their option on a block of foo, GOO shares of the companys stock has been a topic of greater interest than the Presi- dents message or the renewed tight ness of money. The chief mining expert of the Guggenheims is John Hays Ham, mond who rose to fame in South Africa and whose name was on everybody's tongue at the time of the Jameson raid Hammond's salary as expert for the Gug genheims considerably exceeds that paid by the nation to the President. Ham, monds opinion of the value of mining than that of any other engineer in this country or Europe. Many critics have said that Hammond has been oyer-rated
 Be that as it may, when the Cobalt boom started and the reports of rich strikes of native silver began to come
 
 was offered here for s250,00O That was only few months ago. Hammond did not think the property was worth s25O. O00, and his principals, the Guggenheims did not buy 1t. Captain de La Mar and his associates opened up one crevlce of the property that proved enormously rich in silver. The ore could be kicked up with ones boot heels. The property was again offered to the Guggenhems and Hammond Optnhpr fo look it over. He made a rapid examina- tion of the workings and reported that it was the greatest silver mine that he had ever seen. Captain de La Mar and his associates offered the Guggenheims q third of the capital stock, or 100000 shares par value $2000000 for $10,000,000 that is, at s25 share. Hammond strongly urged his people to accept the offer and so the bargain was made. The Guggenheims agreed to take the 100000 shares in four blocks of 100000 shares each, paying four installments of $2,500,000 The first in stallment was paid and the Guggenheims left 60000 shares with Captain de La Mar and his associates as a forfeit in case they should not make further payment The 10000 shares they received, therefore, represented payment of S62.50 a share
 Hammond said that the single vein from which ore was being shipped at the rate OI of ore in it. All of Hammond's friends and the Guggenheims' friends were told that the Nipissing was a wonderful prop erty and that 1t was really a bargain at $25 share. The Guggenheims invited their banking friends to come in on the option and they parceed out blocks of the stosk at the option price, The stock rose violently in the curb market, sell ing as high as 337s immediately after the news of the Guggenheim deal came out. Those who were not fortunate enough to share with the Guggenheims in their block of stock rushed into the market to buy it at any price that sellers were willing to make, but from the time that the Guggenheims made their first payment of g, 100000 on their option the stock sagged in the m arket It fell back to s30 and then to $25 the option price, and then broke through that
 week ago today the stock broke through S20 on heavy selling, and the at- torneys for the Guggenheims made the statement that John Hays Hammond was more enthusiastic about the property than he ever had been before, and that the Guggenheims would make their second payment of $2,500,000 due that day. In th1 q" moon the attorneys for the Gug- ! leims sent a statement to the news Lapers saying that because they had not
 
 rumors regarding the validity of the company's title that they had refused to pay the second installment on their option. and that they withdrew entirely from the Nipissing property. further precipitious slump in the price of the shares this week was the result. The Guggenheims through their attorneys made 1t plain that they had shoudered all losses taken by those who had participat- ed with them in the option.
 The Guggenheims have always been very proud of their family name and their business record but the malodorous Nipissng incident has naturally stirred up a great deal of adverse criticism and the Guggenheims will have to come out in the open and prove their case before Wall street will concede that they have acted entirely honorable in this affar One of the rumors that Wall street has, and that many unprejudiced persons are inclined to believe is that the Guggen- helms sold a very large block of Nipissing stock when 1t was quoted in the neighbor- hood of $30. The supposition Is that they had no sooner paid the first E. 500,000 than they got cold feet and made haste to get out of their holdings. As one of the To- ronto newspa pers says. 1t was a case of 'buck fever.' Several hours before the Guggenhems announced that they had thrown up the deal, and at time when their attorneys were telling the public what wonderful mine the Nipissing was. the Guggenheims were telephoning around to their intimate friends advising them to get out of their stock. About this there is no question. They acknowledged that they had made a mistake and told their friends that they did not want them to suffer. The original owners of the property who made the deal with the Guggenheims feel very sore over the en- tire incident. They have unbounded faith in the future nf the property and be- lieve that all that John Hays Hammond said about it's enormous wealth of silver Is true. Wall street is inclined to be- leve that the Guggenheims would not have withdrawn from an enormously rich property solely on account of very shadowy dispute over a title. The ques- tion as to the title. Wall street thinks, was merely a subterfuge. The commonly accepted opinion is that the Guggenheims decided they had made a mistake in put ting a $30, 900 valuation on a mining property that had scarcely been opened up. Mining men who have been long in the game say that in the days of the Floods and Fairs and Mackays in Nevada and California it was not the usual course for the big men to buy mines at s5o. .O10 valuations that hrd previously been offered at few hundred thousand dollars. The old buyers bought the mines on the five and six figure valuations and