The San Francisco call., 1908-04-05
STOCK JOBBERY
GREAT SCANDAL
OF COMSTOCKS
Men in Control Regulate the
Prices With Endless
Assessments
ManipulatOrs Overcome Law
by Frequent Reorganization
of Companies
Stock Holders Cinched to Pay
Fat Salaries and Extrava-
CANT MANAGEMENT

OF all the scandals connected with
the administration of the Comstocks
the stock jobbery occupies the first
place In an ordinary company,
where control is scattered. no such
coups are possible as in the Com
stocks The stock prices have their
basis on assessments and the men in
control regulate the assessments.
The Comstock rule appears to be to
crowd in year as many assessments =
as the law allows. Some times it is
four, again it is three. A law for
bidding assessments beyond a certain
point is overcome by a reorganization
Thus the company-can begin anew.
climb once more to the limit OF assess
ments and then go through the process
of reorganization again.
CONTROL BY TRUSTEES
One OF the secrets OF the Comstock
control is the trusteeshiI. If Jones
buys say 100 shares OF sierra Nevada
the certificate is not made out IN his
own name. The stock IS carried in the
name of the broker and Charles Hirsh-
| field, the king OF the Comstocks. gets
the proxy from the broker. Thus
Hirshfeld keeps control. Charges OF
very serious abuses are freely made
in connection with the Comstock oper-
ations Charges have been made that
the holdings OF stock holders have been
sold unknown to them. although they
continued to meet assessments. In this
way double and triple assessments
would be paid on the same stock
/ issues.
/ Accusations are also made In regard
to the manner Of disposing OF the de-
Iinquent stock The stock is not Of
/ fered for sale to the highest bidder. but
the public is invited to bid as to the
number OF shares il will take for the
amount OF the delinquency. Thus IL
cent assessment the 1000 shares ara
not put up for sale. That would knock
the market. Instead the bidding Is
based on the least number OF shares
that will be accepted upon payment OF
the amount OF the delinquency.
MANIPULATE THE PRICE
To make this somewhat clearer: In
the case cited above the amount OF the
delinquency would reach 500. The
men interested would bid on the num-
ber of shares they would take for the
s1OO Thus the bidding goes down.
ward. A might open the bidding by
demanding the whole block OF 1000
shares for the 500 delinquency.
would follow and be willing to take
600 shares. So the bidding would range
downward. Say the best bid should
be for 500 shares. The question then
arises what becomes of the other 500
shares? Presumably they go back
into the company.
The advantage of this situation for
the men in control is obvious. With
stock in the treasury they can throw Il
out upon the market as they please
with the desired effect upon tho price.
The Comstocks are very sensitive
stocks. People play them either out OF
an unalloyed spirit OF speculation or
fidence that these treasure stores which
have produced $500. 900 In ore win.
when opened up again In thorough
fashion. yield anew OF their golden
riches.
JUGGLING IS rERY EASY
The Comstocks are 100000 share
companies. The Golddelds, Tonopahs
and other present day mining stocks
are for the most part 100000 share
companies. Deals In the southern
Nsvadas have been upon 1000 share
basis Deals IN the Comstocks were on
a 100 share basis in the old days. This
was natural because OF the high stock
prices prevailing. At the present
time. however. the Comstocks are sold
on the board with the southern Ne
vadas and in price the Comstocks aver
age with the lesser Goldheld and
Tonopah issues. 1t may be seen from
this that the Comstocks may be traded
in by the general public in 1000 share
lots at the present time. whereas in the
old days their high prices made the
100 share lot the popular trading basis
of the general public
This Is explained here at length TO
demonstrate how sensitive the Com
stocks are on the local exchange and
how easily the price may be driven
hither and thither. The purchase of
5000 shares of Comstocks always sends
the price up with a jump. whereas it
requires far heavier operations to affect
the Goldfelds.