Deseret evening news. [volume] (Great Salt Lake City [Utah]) 1867-1920, 1908-03-13

MILLION DOLLAR BOND ISSUE.
Management Criticized Severely
Stock Tied Up Under Vot-
ing Agreement.

George l.. Walker, In the last issue
of the Boston Commercial tells some
interesting things about the Girous
Consolidated company operating at
Ely, New. This company is issuing
Sl,00O.O0O worth of bonds bearing inter-
est at per cent at IS. stockholders
have the privilege to subscribe to Si0O
bonds for each 100 shares of stock held,
which are convertible into stock at IS
share. after March /, 1910 To pro-
vide for the conversion of the bonds
the company's capital stock has been
increased to 100000 shares, the 30o,-
COO shares being retained in the treas
ury.
"The financial statement. issued with
its report" says Mr.. Walker. makes
1t very plain that the company needs
money. 1t is borrowing s290,1O0 against
10,005 shares OF treasury stock on
which individuals hold an option, and
when the report was issued 1t had
| s32. 769 in cash on hand.
Readers OF these letters will recall
| that l was not especially pleased with
| the management of the property when
| 1 visited Ely last summer. The con-
| contractor. which was completed about
| that time. has not yet gone into COM
| mission, Notwithstanding the denials by
| that supply of water to operate the
| concentration had not been provided.
| THE report just issued reiterates the
| claim of the management that there
| Is water enough IN the mines, or Is
| going to be. to operate the concentra-
! tor. Plans are being shaped UP, also,
| TO install a pumping plant in the Step
| toe valley and pump water to the loca-
! ton against a total static and fric-
! tional head of 1.105 feet. An engineer
| has been found who claims that this Is
| possible and feasible, The manage
! ment also has elaborate plans for a
| townslte. sewerage system, etc, which
| by the way, look rather ambitious in
| an annual report containing state
| ment that lack of funds prevented put
| ting into operation the churn drills
which were owned by the company and
! which are standing idle ON the ground.
| II learned last summer that the AL
| pha shaft. HOO deep, was timbered
for about $50 feet of its depth with AKA
inch timbers. and that mining en-
gineers who had seen 1t considered II
| exceedingly unsafe and likely to cave
in at any moment. j RETAINED from
mentioning this, as l did not want to
believe that a man of the mining eX-
perience claimed by President Giroux
would be guilty of such gross dis
| regard of established mining practise.
When the shaft caved in, killing two
and entombing three more miners for
| long period, | regretted that / had
not made the situation public when
| it came to my attention. The incl
| dent is mentioned here as q part con-
| firmation of my previous statement
| that the management of the property
has been exceedingly bad from the
| start.
| ut viii be recalled that there arc
about $4,000 shares of the company's
| capital stock tied up under n voting
| agreement and evidently for sale to the
| highest bidder. The statement just is
sued indicates that the holders of this
| stock want the market to themselves,
as they have made the bond issue con-
| vertible into stock after March /, 1910.
| two years hence, OF course IL is TO
| the interest OF the company and the
| minority stockholders that these bonds
should be converted at the earliest
| possible date, as after their conversion
| interest payments will stop. In this
| case however the welfare OF the ma
jority stockholders seems to have re-
| ceived attention first. BY deferring tbs
| conversion of the bonds two years. the
| pool is protected from the competition
| of the new stock in the market. This
however, is not the first time that the
Giroux company has seemed to me
more Of stock-jobbing than mining
enterprise.
Had the money which went into the
! construction of its useless smelter ana
concentration been loaned out on good
| collateral. the current interest would
| have paid for n great deal of additional
| development work. and would have en-
! abled the company 10 keep Its churn
| drills going during the past year ana
| ascertaining more definitely the size
| and character OF It's ore bodies. II
would also have paid for the report OF
! an hydraulic engineer on the question
OF water supply before the concentrator
was constructed, According To tho re-
| port. however the concentration was
| constructed first and the engineers re-
| ,.n,.t sncnrnd nffnt,,N.n I'd ~