Bisbee daily review., 1909-05-11
TOO MUCH COIN ASKED FOR
 PROSPECTS

An customer who recently visited Arizona expressed his admiration for the splendid possibilities offered for the future. but at the same tiIae asked some pertinent questions and was open in his criticism of the if nancial methods, as he termed them, employed in the development or at tempted development of some mining propositions in Arizona and Sonora.
 What are these people trying to do?" he asked. Do they want to drive capital away or are they only ignorant of the value of money and utterly unacquainted with finance? A prospector discovers good surface in dications and promptly gets his friends together to organize a com pany with a capitalization of a mil lion dcilars, maybe more. On what? Why. on surface showing on which no work has been done and whirl may not ever develop beyond Mark Twain's definition of a mine. Pos sibly this prospector. or several of them. may do a hundred feet or so of work before incorporating and have a fair prospect In that case they would never think of incorporating for less than 3,000.000 to 5000, 900. Why, they are crazyiT That is no way to get capital interested or to develop a property. How can they ever eX- pect to pay dividends on such capi- talization7
 ''The Calumet & Arizona company is capitalized at s2.500.00 with only S2, ,000,000 Of their stock out. These Arizona and Sonora wildcatters will admit that this company has a few developed properties in the Bisbee dis trict, at Courtland and has a smelter at Douglas It pays and has paid dividends. It has visible assets; it has material properties. Yet these brilliant would-be financiers would capitalize doubtful prospect at higher figure than the total issue of C. & A. stock, a proven proposition.
 "All of the Phelps. Dodge & Co mining and smelling interests have been syndicated into a stock com pany This was not done until long after they had been proven big divi- dend producers. There were their great Warren district mines, others in other parts of Arizona, the great Pilaris and the Crurunubabi in Sonora, the smelter in Douglas. the concentra- tor at Nacozari and their other great properties and tangible assets. They incorporate as a proven proposition, after great dividends have been paid, for $50, 100000. If they had adopted the methods of which I am complain ing. they would have capitalized at a billion.
 "If you Arizonans will come down to normal figures, you will draw in vestment and not drive it away. Your propositions will win admiration and not ridicule.
 "A mining company is different from a railroad company, different from an agricultural proposition. Your dividends must be taken out of the ground and once taken out can never be replenished or restored. They are gene and it is that much of the assets taken out and distributed. Hence fair dividend on mining proposition is 20 per cent, for the investor is entitled to the recovery of his capital with good interest, extra good inter est, because of the risk he nas taken, and will not have made ?. good invest ment unless he does. A railroad, properly administered. is ever increas- ing in value Good real estate grows in value. But the mine in the end will be exhausted and yalueless when ali the ore is taken out
 How do these million dollar, these five million dollar interpretations prospects ever expect to return 20 per cent dividends? How can they ever expect to? No these schemes bear all the ear marks of get-rich- quick-scheme for the promoters-ot bunc0 game, and the sooner the min ing men of this section drop sober consideration of these facts and incor- polate in thousands instead of in mil lions of dollars. just that much sooner will Arizona and Sonora receive the attention which they deserve.
 This is the opinion not infrequent- ly heard advanced by men Of the world and men of affairs who come to Arizona looking for opportunities to invest idle capital, and often re- tu-n to their homes disgusted. not wish what they found, but with the conditions they find.