The Goldfield news. [volume] (Goldfield, Nev.) 1904-1911, 1908-12-19

properties are equally good
one at 30 cents and the other at l2Is
cents a share-which would the buyer
usually take!
Having to pay cash for the 3O.cent
stock, or at best buying it in not more
than ten monthly installments. while
there is over three years time allowed
in which to pay for the 12h-ccnt stock.
would be the better propositione
If the promoter of the 30-cent stock
takes no mining chances with the treas
ury buyer, while the promoter of the
l212-cent stock pays practically as much
for stock as the treasury buyer, which
woul be the better propositiona
Would the treasury stock buyer pre-
fer to put up all the money for develop
mcnt instead of half of it, with the
same possible profit in sight in each
case?
If it is doubtful whether the company
selling the 30-cent stock can raise suf.
fcient money to develop its property,
while it is a certainty that the company
selling the 121a-cent stock can, which
stock would the buyer preferg
Questions Answer Themselves
These questions seem to answer them
selves. And they should when put in
this direct form. The fact remains,
however, that the general public, and
especially in the east, has for years in
sisted on taking the expensive stock,
the one in which the promoters take
no mining chances, where the public
has to put up all the miney for develop
mcnt, where in min eases out of ten
the company fails for lack of capital;
and last, but by no means least, the
average mining stock buyer chooses the
kind of stocks promoted by the faker
and wildcatter.
The only purpose in buying mining
stocks is to make money. The more
eheaply the same stock can be bought,
the more money can be made out of it.
Whether bought for a profit resulting
from an advance in market, or to hold
for a larger profit when the property is
developed, the ability of the company
to raise the money with which to develop
its property, determines the question of
profit or loss. If the company is un-
able to secure capital for development
purposes, the property must lie idle or
the company go in debt. In either case
the stakeholder loses.
Lack of capital is the cause of the
majority of business failures. This APP
plies to mining even more forcibly than
to any other business. Therefore, it is
wise to buy stock only in a company
which is certain to be able to raise all
the money it needs. Is any mining
company sure of raising all the money
necessary for development purposes to
equip it's property with the required
machinery?
1t certainly is, and the method is re-
markably simple, with less than half
the usual cost to the buyer of treasury
stock.
Two Companies Compared
Take W mining companies, Zach
with a capitalization of 10000 600 shares.
Each has 500, 900 shares of treasury
stock, and 100000 shares of promotion
stock, so called. Each company must
raise 100000 for development pur-
poses. This is an assumed amount, but
it applies to zach company. Any other
amount will produce the same result.
Comparisons are of no value unless they
deal with similar conditions in each
case.
One company issues worcestershire
stock. To raise 100000 for it's treas
urv, it must sell it's 100000 shares of
treasury stock for $%150,000, an average
of 30 cents per share.
1t costs money to sell mining stock
as well as any other goods. The mer-
chant makes a gross profit of 80 1-3 per
cent. The promoter can not do business
on a less margin than the merchant,
and he must work a great deal harder
to sell his goods.
The promoter makes a profit from
selling the treasury stock, and takes no
mining chances. He makes money
whether the enterprise succeeds or fails.
The treasury stock buyers pay him a
profit for the privilege of putting up
all the money and taking all the risks.
If the proposition should succeed, the
buyers of the treasury stock have made
the promoter s stock worth a great deal
of money. If the company fails, the
promotor has made a good profit from
the sale of the treasury stock while the
treasury stock buyers hold the bag.
In nine eases out of ten, however, the
worcestershire company is unable to sell
enough of its stock to develop its prop
ertv. The countless wrecks of non-as-
sessable companies that have hawked
their stocks from ocean to ocean,, bear
overwhelming testimony that this state
ment is correct.
Faking and Validating
, ,l u,;IJaof nranotors sell