The Washington herald., 1913-05-24
WHERE INVESTORS
BURY DEAD HOPES

(CopyTight 1913, By c. NJ. Keys. New YORK;
A few weeks ago the Secretary of
State of New Jersey published list of
5000 corporations which were about to
forfeit their New Jersey charters be-
cause they had failed to pay the State
corporation tax.
The great majority of those corpora
tons were dead long before the list was
published. Many Of them never were
anything but name, never had any
business, any assets. any good viii. or
any property. They were incorporated
with the idea that they would do some
thing. but somebody changed his mind
or something went wrong. and the cor
poration simply stayed in existence as
long as its initial corporation fees al
lowed II to live and then die natural
death.
In the list. however, there were sew
eral hundreds OF corporations which had
been a means whereby stock or bonds
were sold to the public. About 100 OF
them were mining companies which had
gone out of business during the last
year. The majority of these companies
had been capitalized and sold to the
public in one form or another.
OF course the fact that the company
is incorporated in New Jersey does not
mean that its stocks are sold In New
Jersey. That State. as a matter OF
fact, is not a particularly good field
for mining stock. The list of New
Jersey wildcat companies would cover
more securities that have been sold in
the Middle West. up State in New York,
and throughout New England. than COM
panies whose stock had been sold in
New Jersey and in New York City.
New Jersey, in the past, has been sort
of cradle for short lived and ephemeral
mining companies. industrial COM
panies, holding companies, and other
concerns that need a broad and liberal
law to allow them to be born
Alongside the figures showing the list
of mortaIities among the New Jersey
corporations 1t is worth while TO note
that according to the estimate of the
Department of Justice at Washington
the amount of public loss through fake
promotions in 1912 was about s75.ooo.0J
as against something like s1oo,Ooo,ooo the
year before. The inference from the
government figures is that swindlins
through stock promotion is decreasing In
this country as the result of the activity
of the Postofice Department and the De-
partment of Justice. 1t seems to be a
fact that operations of this sort are not
carried on nearly SO openly as tney Wcio
a couple of years ago. particularly by
the class of operators who used very
large space in such of the newspapers
and other publications as would accept
their advertising.
There have been so many records and
stories published by the government, by
the State departments, and by indie
pendent people writing in newspapers
and magazines, about the get-rich-quick
game and its inevitable result. that II
seems almost Incredible that thousands
of such companies should still be fioated
every year in the United States ard that
millions of dollars should be lost by the
public in this way every year. Yet. so
great is the creduiity of the public that
men VINO have been closely In touch with
this business for many years almost
without exception state. as their opinion.
that only very small part. indeed. OF
the public buying worthless securities
has been stopped by the revelations that
have been made. The public never seems
to learn that to buy strange securities
from strange people is essentially a
dangerous pursuit and that it Is the more
dangerous the further away one gets
from the standard markets.