The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1919-06-05
BANKER WARNS Of
WILD CAT STOCKS

BALTIMORE. June "a caution
airy feature in the purchase or wild
cat" oil stocks, or. indeed, any other
class OF stocks which have no sub
stantiaI basis back or them. has been
broughat out by Baltimore invest
ment banker. IL Is one well worthy OF
consideration, especially by thoseGho
have tangible property from which
collection can be made on bona fide
contract.
This banker pointed out that not all
Of these fake" issues, particularly
those which are issued in proper legal
form. have a prOviso that the stock
is worcestershire" Therefore, those
who make the sale may demand an as
sessment of the sharek olders in the
event more capital is needed. This
they will either collect or VIII put
those who hold the shares and who
have tangible property to a great
deal of trouble before they. may be
able TO prove the fraudulency OF the
stock and the company issuing II.
Therefore the credulous, who are
determined to take chance on the al
Turing prOspectuses held out by the
promoters Of getting rich over night
should be careful to note whether or
not the shares they subscribe to can
be assessed in case the company
should need money.
A ShreTd Banker "StunE."
A consideration OF this factor in
these hy-by-night" concerns may be
further aroused by statement
made many years ago by the lete
+. ank Sherwood Hambleton, who was
one of the shTewdest and most sue
cessful of Baltimore bankers. HIS
experience shows how even the ex-
perienced may be caught in the net
and "stung" when seeking to get
something for nothing. The incident.
as related by Mr.. Hambleton, was as
follows:
when L first entered the banking
business. soon after my return from
college, the stocks OF gold mining
companies, in North Carolina espe-
scially. were in full swing in the Bal
timore market. There was great
promise of gold discoveries in the
State. and those who based their con-
fdence on the ultimate finding OF
gold in paying quantities secured
, land in the supposed gold-producing
sections They would then form
companies, issue stock, and sell it for
from 81 TO S. a share.
These stocks were active on the
Baltimore Exchange when 1 was a
young man, but as an investment
neither | nor my Arm paid any at
tention to them. We always sought
, to steer our clients away from these
promotions. which we looked upon as
purely wild cat and unworthy Of con-
sideration. However. they continued
to multiply and were traded in daily
both on the local stock exchange and
eTs on the street.
Speculation Was wild.
Their price movements were wide
and frequent, and the speculation was
wild. The whole city seemed to have
gone crazy over the speculation in
| the Carolina gold mining stocks. II
was not infrequent that a stock
would open in the morning at 81 OF
| 50 a share and close at 81 and IS.
! About this period l had occasion to
make a, trip to New York on business
On looking over my needs for the triE
! found that 1 was shy an umbrella
II occurred to me that / ought to b
able to obtain one without cost BY
buying 100 shares of some of the
promising North Carolina gold mining
stocks and making its appreciation
I pay the bill.
. Acting on this impulse, l bought
] 100 shares Of Gold Knob or Colo
| Acre or some such name. paying So q
share. Before leaving 1 gave instruc-
| lions that the stock be sold il IL went
| TO 81 a share. ! confidently expected
| this TO happen within a day or the day
after, as the craze was on and the
/ shares were moving fast.
Umbrella Cost 500.
with this comfortable feeling
paid So for silk umbrella. A great
! surprise awaited me on my return
| In my absence the stock I had bought
had gone TO practically nothing, and
| found in addition a notice that / had
been assessed 81 share to make VI
| for the company's expense OF opera
| ton. | had to pay this, but ! imme'
diately disposed Of the stock-whethel
! | sold it or gave it away ! do not
|