The Salt Lake tribune. [volume] (Salt Lake City, Utah) 1890-current, 1911-04-03
Objection to Calumet & Hecla
Merger on Market Account
Is Discussed.
PRO AND CON OF
LISTING THE STOCK
How Suspicion Is Directed to
Companies Which Are Co.
ing Full Blast.

II was pointed out In these columns
some time ago that the principal ohjec-
ton TO the proposed Calumet Hecia
merger was that il would remove many
stocks dealt In on the eastern exchanges
from the specula tive columns. This idea
is taken on "A broader scale by the En-
gineering md Mining Journal and dis
cussed as follows:
The. recent controversy over the Calu-
met & Hecla consolidation, whcreto the
opposition was apparently based largely
upon the disappointment of some people
over the prospective elimination OF stock
lohbing in certain whllom favorites, in
spires consideration of why there
should he so much stock jobbtns in min
Ing shares. III anyone Is lucky enough 10
find and develop a good mine. he acquires
an enviabe kind of property and thcoret-
lcally he ought not want TO sell H. This
Idea finds eXemplficatlon In some OF our
most important copper-mining companies.
Senator Clark has been we'll satisfied
with the income derived from his United
Verde, So have the chief owners Of the
Calumet & BeCla and of Phelps, Dodge
& Co. GlanciDg around among mining
companies in other fields, II appears that
the owners of such concerns as the New
Jersey Zinc company. the ST, Joseph
Lead company and the Homestake Min
Ing company are in nowise anxious to
sell their shares. Transactions in them
are few and far between.
When Finances Needed
Now there is nothing ilIegitjmate, or
even reprchcnsible, in the effort of some
syndiCates to merchandise stocks through
the medium Of the stock exchange, nor
does the desire to effect n distribution
imply necessarily an idea OF imposing
upon the buyers. An exploration com
pany or a banking house may embark a
large portion OF its capital in the develop
mcnt and promotion of a mine requiring
a great deal OF money. never with any in
tention OF going into the enterprise as an
investment
II is the business OF such entrepreneurs
10 take risks and furnish knowledge that
deserve rates of profit in excess Of what
the investor can reasonably expect and it
Is consequently a part OF the business of
such concerns to turn over their capital
as rapidly as possible. Moreover, the
amount of capital required in these huge
modern mining enterprises is so great
that compare lively few syndlcates are
able alone TO carry on such enterprises
as Copper River and Cerro dc Pasco, and
In general IL is necessary to transfer q
part OF the burden to the public, The
public becomes n rational Darticipator In
the business when it is able 10 buy the
shares upon sound basis. This hap
pens much more frequently than is sup
posed, and II is often the market created
by the shrewder and bolder investors In
their efforts to sell at a profit TO the
less experienced that involves the most
stock iobbery.
When, however, the owners OF mine
that is already developed as a going
ment OF operations, etc. list their shares
and inaUgurate great activity in them.
suspicious are naturally excited. Sup
pose. for example, that transactions in
Homestaite. which normally amount TO
100 shares or so about once week.
should jump to the thousands per day;
or suppose that United Verde should be
listed and made cynosure OF attention;
the natural Inference would be that the
owners desired to unload But If those
securities had ceased TO be good enough
for the owners who had previously been
we'll satisfied with their income. why
should they he good enough for the pub
lie? II IL be II case Of neccssitous IL
qudation. such people usually go about ii
In a different way.
Caution Of Investors.
The purchasers of stocks ought to
inquire whether tho market be represent
ativc of normal transactions from invest
or TO investor; or whether il be made for
the purpose OF distribution by large
owners OF the stock: and II the latter
whether the distribution be q normal
business affair, or whether il be a cash
ing in OF chips" Such inquiries cannot
always be answered definitely. although
sometimes Illuminating information is
available However. the positive answer
TO the broad question Is the relation be-
tween market price and Intrinsic value,
and upon that sound information is gem
orally 10 be had.
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