The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1910-09-11

II n
IugS against purchases of United Wire
less stock. \ month later the whole
scheme was exposed as gigantic fraud
but the promoter IS best Judged by
MS methods. In support OF the aror-
neHts &C ono who has been onararino
extensively throughout the Islands. =
paper Las been forwarded to the pros
pectlve subscribers This paper was
devoted 10 oil news. where dissertations
OF the Lakeyiew gusher and glowing
accounts of the operations of the com
pany IN which stock was being offered
were spread all over the page. On the
strength OF all this. hundreds were in.
vested n absolute disregard to the fact
that the paper was printed bv the COM
pany dlspOsing of the stock for the par
tlcular purpose of boosting it, Such
ldlocv is deserving of any misfortunes
that might follow. This is not a knock
at the companies which are exploited
n lt-some Of them are known to have
producing wells and the prospects of
others are not so rosv-but il is CON
demnatlon of the procedure of invest
! ors. For all the guarantee the investor
had, the stock might be worthless paper.
and the company might actually own
! Of getting any. There was a company
tioated in Los Angeles wear ago to
! sell lots in "North GoIdfeld.'' a
l"prosperous mining REGION Tie land
| was in the middle of the Moiave Desert.
| fifty miles from water. and belonged
! TO the government But the promoters
/ made ten thousand dollars in ten weeks
! before they We're exposed by the news
papers.
| Another thing-selling stock is sup
! posed to be means by which a com
/ panv raises sufficient money to develop
| an industry. 1t is working on a basis
and the prospectus even says So
that if II sells a certain amount of
stock. the money. thus raised will de
velop that industry. Let Us see-the
company puts the stock into the hands
OF a broker or selling company. This
broker or selling company gets COM
mission and nearly always employs
agents who get salaries and more COM
missions. This comes out OF the stock
sales They spend hundreds of dollars
IN newspaper and prospectus advertls-
ing. This comes out of the stock sales
The promoters are meanwhile drawing
fat salaries for their work This
and a dozen other things comes out OF
the stock sales. In other words it comes
out Of the lambs of stock subscribers
This must not be misunderstood. In
vestment for development has been the
making of America and is advocated
here-not knocked. 4 certain amount
of advertising is absolutely necessary
hut fve-plate polychromes are not
Commissions are allowable but the sub
scrlber should ascertain what commits
: sions are being paid. For their private
information it might be said that fake
schemes pay twenty per cent. on stocl
; sales when it is selling at ten cents 6
, share. This is outrageous. The promo
/, ter is entitled to no salary until tn
: company is operating and he Is earn
| ing II.
: Now the fourth and last thing Il
: be looked ont for. The capital of :
. company is set at a figure which i
| calculated to be sufficient TO develop
. the companv's holdings and leave
: little in the treasury. Nineteen stock
, out of twenty which are sold at tel
= cents share are fakes. For instance
: company needs fifty thousand dollar
/ 10 develop. They would have TO sci
I five hundred thousand shares at te'
, CENTS to raise it and another hundre
: thousand to- pay promotion expenses
? even If thew were honest and dldn
draw salaries. At the end of two year
, rbay- have ten thousand dollars to spen
IN dividends out Of which they tax
. half for culture development. Th
= dividends would be less than cent
share.
The trouble Is with America that
wants to get rich too quick.
This lengthy exploitation of fact
which are already known IS only set Oh
Q bac,usa paople occasionally forget the1
Y ana Ho1oIuIu seems to have lost a
: aco1aiu-ance with them. The Adve'
. +isar advocates the investment OF HI
4 walls surplus cash in foreign channel
: = necessary. L won't exactly help
T tmerrranize the Islands quicker. bu
= -lara i no reason whv Il won t retur
? money on the investment. The . knocE
= mo, i not done in a destructive splrl
= on he other hand it i made as baS
r for 4 constructive suggestion. the earl
= as- consideration Of which this papf
r strongly advocates.
r IT IS:
r That Honolulu emulate the exampI
= o@ ali other cities whore money Is forti
i COMING for investment purposes; to WI
have one Of its commercial or merca'
tie bodies preferably the merchant,
association). appoint a committee,
- mass on all investment proposition tnf
ARE about TO he offered to the pQoill
This committee could consider all IN
;ndacem antS which are TO be advertise
/ and nudge them from a business man
e standpoint. It IS to the benett or e'
n arv husiness man TO protect those OF n
y community who are not business poop
,, and who support the stock seilIn
" scheme.
in favor Of or against the propose
COMPANY. impartially. Il would ce
= +afrlv he hard on great many coi
NAMES but It would save money nome nome
nd ban,iness for a great many peopl
Paonle are more important than con
panies. -bo ba
. bona fde proposition which ne ma
: faith in would refuse to submit II :
h sncb committee Every American 1
1es+or < willing TO play against &c
1o-,,a,+ of chance or he wOuIdn