Pine Bluff daily graphic. (Pine Bluff, Ark.) 1893-1942, 1919-08-03
Considerations Which Determine
Whether the Buyer is Investing,
Specializing or Gambling.

Whether the Buyer is Investing,
Specializing or Gambling.
(By William B. jackson, in Leslie's
Weekly
The United States is in the midst
of an oil boom that in many respects
resembles the great California and
Klondike gold booms of former years.
Millionaires are made overnight,
towns spring up in places that were
previously barren wastes, and almost
Immediately become fair-sized cities.
The tales of sudden wealth read like
fairy-stories. To appreciate the ex-
tent of the boom it is necessary to
visit the oil fields, to go through the
towns and cities where the excite
ment is the keenest, to talk to the
people who are living through this
magic period. In such places you
will find that everyone is an optimist
and has something to sell. Tele-
phone girls, bootblacks, messenger
boys, bank presidents, merchants,
clergymen, one and all seem to have
contracted the speculative fever.
But it is not only in the oil dis
tricts that the boom has made it's
presence felt. Throughout the entire
country the story has been told, and
feeding upon this publicity the stock
promoter has followed with his
wares. It is this phase of the boom
that is just beginning to receive at
tention from public officials and the
people. For many Of the new COM
panies that have sprung up as re-
suit Of the boom are palpably fakes,
others are simply gambling PROPOSE
tions, while still others are highly
speculative, but at the same time pos
sessing more or less merit and thus
giving to the purchaser Of such Sc
curities at least chance for his
money. A few are strictly invest
ment in character, but these are
greatly in the minority.
From Village to City.
Thousands of new companies have
been organized since the boom first
started. In one Texas city, about
nine hundred companies have come
into existence. This city two years
ago is said to have had population
Of less than LOO. Today it is est
mated that there are $4,000 persons
living there, and practically the en-.
tire increase is due to the oil boom
It is there that most of the com
panies operating in the town Of
Burkburnett are organized and pro
NOTED, and of the 900 such companies
80 are now paying dividends. Some
Of the companies have been started
as out and out fakes by the most no.
torious takers in the country, many
OF whom have picked nm bag and
baggage and moved to Texas. Others
\ have been organized by inexperienc.
and*absolutely unqualified to conduct
business demanding the training
and knowledge required.
That the takers in the oil territory
as well as in the financial centers
such as New. York and Chicago, have
been successful, is evidenced by the
. ease and quickness with which new
companies are financed The I'M
fortunate side Of this is that it is diff
ficult to reach the faker by law, and
this is not due so much to the fault
Of the law as it is to the ignorance of
the investor. There are many states
that have excellent blue-sky laws
covering the selling of securities, but
It has been almost as easy to sell the
stocks of fake companies in such
states as it has in states that make
little effort to protect the investor
Active campaigns have been carried
on by responsible oil journals, by
commercial organizations. and by
reputable bankers and brokers to
curb the oil faker, but it has seemed
to date to be practically impossible
to stamp him out.
The one successful way to put the
faker out Of business is for the indi-
vidual investor to use little COM
mon sense in turning his money over
to stock salesman. In the first
place he or she should understand
the difference between investments
speculations and gambling. In the
next place knowledge of the indus
try apd the principles governing the
profitable operations Of the industry
should be acquired.
Ask Yourself Three Questions.
What is an investment? What is
speculation? And what is gambl.
ing? If those questions were put to
Thousand persons each one would
give an answer, and probably all
would be wrong. There are few sub
jects Of which people know SO little,
even bankers and brokers, as they
do Of what constitutes investment,
speculation and gambling. The rea-
son is doubtless because no defini-
ton applies equally to any two per-
sons. What is an investment for one
NAV be speculation for another and
plain gambling for third. To illus
trate this, it might be well to cite the
case Of an oil company organized to
develop a small lease in developed
field. The company is financed with
sufficient money to drill one we'll. IT
it is successful the stockholders will
make many. times their capital in d.
vidends. II it fails everything put in
to that company is lost. Now one of
these stockholders may be man who