Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1910-08-02
OIL CONCERNS
NEVER EXPECT TO
PAY DIVIDENDS
California Cite lining Bureau
Issues Tin Warning TO
Possible Investors in Com
paaies That Are fraudulent,

fr%Hitduient pragtices resorted TO b,
fake oil companies operating In CAL.
fornia resulting IN continuous com
plants to the state mining bureau. i
is believed that investors at large mal
HI benefited 70 an extent BY the pub
l~ication ~ q few suggestions from th'
bureau. covering the initial points II
IL advisable 10 consider before de-
livering their money, never to return
into The hands Of operators OF these
fake companies, where the intention
il purely and simply 10 sell stock.
and without tho first idea or expecta-
tion u ever paying dividends.
The following are q few Of the
principal points suggested BY Lewis
E. Aubury, state ~mineroloeist.
Has the advertised OF company un-
der consideration a title 20 the al
3 lcGed oil land being exploited In
what manner and for what considera-
tion WAS title acquired, and is II ac-
tnaily within proven or %unproven ter
ritory@
Many companies operating In UNI
proven territory, advertise that they
Gown or tlav secured" such and
nnch tracts Of land; that they are
within proven territory and that tho
purchase wma made for SO much Of
the eumpany's stock in addition to q
cash eonsideration-~frequently quite
n large one~-and added thereto Is the
payment 81 Il royalty 10 the owner or
owners when production IL reached
the latter the only consideration
against which the locator Of the land
VIII ever have any claim, and that a
remote one.
This is Of course an extreme but
NOT al unusual case Of imposition,
cited for the purpose OF illustration
and with a view 20 opening up 70
prospective stockholders nm avenue
Of thought which In turn may suggest
many other material points not re-
ferred 70 herein.
Lands advertised Ia this manner are
more often merely locations of gov-
ernment land. subject TO numerous re-
auirements Of lnw ana open 10 att
tack and litigation that may event
uaily render acquisition OF title from
the government 10 the company in
question an imposHihilitY~~Hnd under
HIiN tAfANilANttAl iffM Wv pay iffNfA ~
such a large and disproportionate
consideration ~ the promoters Of the
company, stamps It on ~ fare ~
Il proposition purely Tor the benefit
OF the operators AZ the expense of the
stockholders,
The promotion stock is OF course
unloaded tsince It Is not intended
that the project shall prove q sue.
cessl and The proceeds pocketed, ~
addition 70 the cash payments due ae'
count of having discovered the land,
and which afp derived from the sale
Of the balance OF the stock, The liher'
al promoter. in the goodness OF his
heart, also allows q grateful and eager
public 10 acquire with the under
standing that The opportunity Of q
lifetime IL presented and under no
circumstances should be permitted 70
escape even though all else IL sacri-
fioed. This, u IL q matter OF record,
81 done IN only too many instances to
inc everlasting sorrow OF the pur-
chaser Investing his or her all
Continuing upon this subject OF
payment. for example. a company in
corporated for s1.o0O, 000 par value
per share st,00, advises ia It's pros
nectus that 6a0.000 shares have heer
paid for its property which mean'
literally tina one helf OF the capitaii'
cation OF h company benefits only
the promoters who discovered thi'
valuable CD tract ia question ol
more 20 the point. that the tract "
question would answer their purpose
Possibly IL ia IA location very close e
the edse Of productive oil lands &C.
quired from the locator for a merl
song or solely upon an agreement e
pas u royalty from the production de.
rived from operating the land, their
beng many locators upon the edge o
production. and on lands the g%eologi
cal formation Of which precludes am
possibility uf striking oil in paying
quautiurs. or at am. but who have th'
miners underlying faith Ia "a hrigh
u paving future Tor their claims
These claimants. usually having litu'
on no money are readily annexed h'
the fake promoter under such term
ns above indicated and operations oi
the land are borun and carried ol
upon am extensive scale, since thes0
WIG promoters Boz many Instances *
tend their persuasive % couvlneiul
abilities to tie supply companies, whN
furnish on credit an the nccessar.
cquipm nt and eventually seize II go
failure OF paymcnt-hut al that
desired hHs been accomplished hy th
fake promoter and permits him To he
Gin Immediate and elaborate opera
tions which Dee sdrrrtises Go the full
est extent and more 81 possible. q,
.H L..M L 4E.