The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1919-06-27

Warning against investments In
wildcat" oil wells, rubber companies.
and other ways TO sudden wealth,
which are now being promoted
throughout the country, was sounded
Thursday by local bankers who urge
small investors to put their money
into safe securities.
The Liberty bonds of the United
States government are by far the bet
ter and safer investments for small
holders than the get-rich-quick
schemes being promoted by oil COM
panies," declared banker. I'VE have
numerous requests for advice from
local persons concerning the invest
ment in these stocks, but the best
advice we can give Is for the investor
to put his money in the United States
bonds.
- These bonds bear interest at the
rate of four and three-fourths per cent,
and are exempt from taxation in small
amounts. whereas the best paying
legitimate oil stock usually brings no
more than seven or eight per cent,
which is not equal to the government
offer, after taxes are paid. Other
stock pays higher but is dangerous.
The initial investment too. is far safer
with the government bonds, which are
without question the best securities
on the market.
Investors should look more to their
principal than to the amount of divi-
dends paid by the investment, and
often, where this part is overlooked.
the principal as well as any chance for
profit is lost"
Oil Wells Risky.
The workings of some Of the large
get-nch-quick oil companies of the
south, are explained in a recent story
which appeared in southern newspa-
pers, parts of which follow:
In Texas there is going on today
the biggest gamble in oil lands and
leases ever known in the history OF
the industry. 1t is the excitement OF
the Klondike, Goldfield and Tombstone
rolled into one big revelry of get-rich.
quick schemes, with crude petroleum
as the basis for the various operations
of the promoters and spectators.
Then there is the conservative, legi
innate and solid oil operators who
usually follow in the wake Of the orig
inal prospectors and place the indus
try on a substantial basis. All these
elements are now intermingling in
Texas.
1t is shown by statistics that have
just been collected that there are ap
proximately 500 wildcat oil wells now
being drilled in Texas. L Is estimated
that the cost of putting down deer
test well, say to depth of 5000 feet
is approximately $4,000. Figured or
this basis, there is being expended a.
this time in prospecting for oil outside
of the areas that have already beer
proved about Sic, 100000. This sun
does not by any means represent the
total wastage as it might be termed. II
this industry but it only represent:
what is expended during an average
period, say of every two months, o.
at the rate of $96.00o,0o0 a year.
Promoters Take Chances
To many promoters, there is d,
greater sport than taking long chances
in their investments, meager as thei
available capital may be. Compare
lively few of them are interested II
the producing, end Of the game. The,
limit their activities to acquiring leas
es of land as cheaply as possible ant
boosting the price to the point wher,
they can dispose of their holding
with good profits.
As the drilling proceeds. however
the promoters manage in atquiet wa.
to have the report circulated tina
splendid oil indications have been en-
countered. This causes both boost