The Wallace miner. [volume] (Wallace, Idaho) 1907-current, 1912-08-29
W|lDCATT|NC HAS BEEN
BANE OF THE INDUSTRY
REASON PEOPLE ARE WARY OF
INVESTING IN STOCK NOT
HARD TO FIND.
(Mining and Scientific Press).


1t is common remark these days
that the public Is not in the market fol
mines and this is largely true The
reason Is not far to seek. The public
meaning thereby the general and unin-
formed public, has received but little
return from past Investment and has
but little reason to buy again. 1t was
float off on the public the improbable
ventures and lock in the safe certifi-
in London and Denver differed. but
the game, and game 1t was. was essen
engineers, and some rank high in abil-
lty and accomplishment, who privately
if not publicly, defend the practice.
They say that the risk in mining is SO
great that if it were not possible to
pass on to the public large percent
age of the failures, there would be no
profit left for the insiders. Others point
out that the west has been developed
by eastern money, much of which
would not have left home save in hope
of the unusual gain foretold by the
fanciful tales of the promoter. The in
dividual investor who was usually al
heart a gambler. lost; but real mines
were found and the west was devel
oped. Whatever be the line of argu.
ment however there is general agree
ment that the game is now slow and g
wide fear that it has been stopped for
long period, if not permanently. II
is true that large promotions do now
occur and that the public has full op
portunity to invest in poor as well as
good ventures. There is, however, one
difference. In western
America 1t was for many years pos
sibe for men of no real financial re-
sponsibility to take an option on pro-
perty and, by advertising, by circulars
through solicitors and through wash
sales on the minor stock exchanges, tc
gather the money to pay for the option
for the selling campaign. the develop
mcnt and plant and finally to reserve
to themselves the major share of any
possible profits This is still done, but
not frequently or easily. In any large
and successful mine promotion nova
days. the promoter or his hacker must
usually put up actual cash in consid
cradle amounts at some stage. Where
this is not necessary it is because an
esta blished firm, with several successes
to its credit, UNDERWRITERS the issue OF
stock or buys the bonds and on this
assurance of success in financing thf
the public buys SO promptly
that the underwriters do not need tc
advance the money. This does not hap
pen as often as the brokers would like
the public to believe and it is an open
secret that in a number of successful
ventures, where good mines are pay
ing fair dividends, the campaign O.
distribution has been slow or unsuc.
cessful 1t is clear, none the less, tha'
even at a possibly higher price per
share, the present plan is advantag
eous to the public as compared with
the old. Formerly the buyers Of a few
shares in a new property took all the
risk of mining, plus the risk of thin
ice financing, and paid a heavy COM
mission to the sure thing men who
the deal Conditions are
none too good now. The shares alb
sorbed by underwriters and paid as
are large; but real ser
vice is performed and real risk is
saved the public The security to the
latter is actually greater than 1t seems
since promoting house saddled with
bad venture must often, IL 1t is to
itself with its clients, sustain
the market by buying back securities
with much pains and at
some cost. So heavy is this tax that
some of the most successful mining
In America never go to
the public for funds. The Hagen
Hearst partnership which scored g
number of the biggest successes In
American mining, always preferred to
spend money underground rather than
on stock exchanges. Other men frank
ly accept the situation and by gam
bling in stocks Of established proper
ties that they control recoup losses on
new ventures.
BUSINESS is founded on confidence
The average wage Garner deposits his
money in savings bank because he
has confidence in the management. He
accepts a low rate of interest and the
banker is thereby able to make profit
by buying bonds I'm which he, in turn
has confidence The banker takes his
profit and lends personal funds on the
more risky but more attractive ven
lures. Thus the accumulated funds of
the many make possible the large pro-
fits of the few FROM one point of view
l,,,t 10,