The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1919-07-23

Ranger, German, Desdamona, Burk-
burnet have offices of promoting and OPP
Grating companies All over the country
are other organized companies having
holdings and proceeding with stock sales
and sales and preparations for develop
ment.
A favorite method of getting into the
oil game, and one of the safe ways, too,
is to deal in leases. That is, acquire
acreage in or near proven territory, ter
ritory in which oil is already being pro-
duced, and hold for speculation. Acreage
is in great demand. Land that
was obtained only a few months ago for
a few dollars per acre and which has
since proven in prospects has been resold
for thousands of dollars per acre. No
price seems too large if the prospects are
good People are born every second, and
no more land in the Texas field is being
created. The price is continually golnS
up.
Another very popular method, also quite
safe, is to deal in royalties" And TINS
, method will require some explanation u
the uninitiated. According to the Texa
law the actual owner of acreage is en-
titled to a one-eighth interest to the pro-
duction of any land on which he leases
the oil and mineral rights. In due legal
parlance the lease reads to cover GER
tain period usually five years, for which g
certain initial price is paid by the lessee
Within a certain period development must
be started, after which, no development
having begun. the title reVerts to the
owner But if development is made, ano
emoluments save one-eighth, is the prop
erty of the lessee for as long as profitable
production continues. This participation
in oil is very easy for the farmer or
owner of acreage in favorable territory.
His profits are assured, if any accrue
and he does not lose his land. Many
such owners, without any effort on their
part, have become owners of sudden anu
great wealth, even millionaries in the
Texas oil field.
THE LESSEES PART
And what of the lessee! He may be
right at or near production now Or
he may be just beyond production,
that is. where wells are being drilled
and some have come in and are profit
ably producing. He secures lease title
as close I'D as he can get and either
waits or, if able to finance an enter
prise, organizes company or pro.
ceeds himself with development IL
company is to be organized, tnere
are two methods. He may invite
number of friends to join him in dec
laration of trust. each putting Up an
amount of initial capital, not neces-
sarily an equal amount, and they is
sue stock Such an organization may
boast that none of it's officers draw
salary and that the purchasers or
shares will share pro rata the profits
of development. That seems falr, ana
is fair if an honest administration OF
the business is had. Many of such or
PLANTATIONS have proceeded, struck OIL
in paving quantities and paid div
idends. But the method affords an OPP
portunity for skinning the stock buy
| ers that should be understood ana
carefully investigated before purcnds-
ing. How? Simply because the ad-
ministration of affairs remains in the
| hands of the original promoters who
| can make whatever disposition they
please of their operations, reportin
any amount of cost of development,
even selling out at pleasure and 'di-
| viding'' with the stockholders. Here
| in lies the danger TO those invested
with crooked promoters: Development
may proceed large funds may be re
ported expended in covering OF TOOLS
in drilling, cave-ins and the crushle
of casing in the hole and thousaEi
other unforeseen accidents that must
be bridged Finally a dry hole may
be reported or poor production an
nounced The original issue of stock
is exhausted and the company Is
busted" If any final report is pre-
scented to stockholders, 1t probably an
nounces regrets and thanks the suck
ers for sharing with them the long
chance which has proven so disastrous.
But few such promoters have evec
reported to their stockholders. 1t
would be too expensive. Their stocks
have been issued in shares of as Ut
tie as 10 cents to rs cents each and
the mail list, would be too large ana
postage too much for such an unlm-
portant expenditure. Take another
| angle of it Gin the case of the crooked
promoter). Allow that he has actually
| "sighted" paying production-is down
| to oil sand and has only to tap in or
| go a. few feet further. He can ADVISE
| his stockholders that as matter Oh
protection for them, with very poor
| prospects in sight, the company mad
| decided to accept an offer 10 puy
which afforded profit to the com
pany, and they had sold out theii
holdings, and herewith find your pic
rata share of the profits" And tre
company actually pays a small DIV
idend But what becomes of the hole
and to whom did the company sell
! Why, to another company, of course
in which they have silent partner
ship. Development proceeds, gushel
comes in, and the original partners dr.
rolling in wealth, but not the STOCK
proposition.
KNOW YOUR MEN
The one safest way to play the CT
game, from an investors point o
! view. and the one as safe as can b'
in gambling on the yes or no" in strik
| ing oil. is first, above all things, know
| the men behind the company offerln-
| to sell you stock. Satisfy yoursel
| that they are men of honorable reputa
| ton and achievement who can b
| trusted to give you a square deaf
! Such men do not hesitate to have thel
| company incorporated, thereby placlnr
| their worth, their intentions and the,'
| transactions on record with the sta''
| and government They are bound 0.
| law to keep an accurate record of eA
penditures and receipts and report OF
| it to stockholders. Their operations
and their books are open at all times
| to investors in their company. If 20.
| are not personally acquainted with tn'
men themselves. they are on record
| and it will be an easy matter to looi
| them up. Somebody, somewhere NJ
some institution of reference, can CIV
you desired information. BY investlns
with them you are eliminating all o.
the risk except tina, of actually get
ting oil in paying quantities, and ever
on this careful investigation of tns
company's holdings will furnish a feel
ing of safety.
Investigation of holding should b.
made. 1t may be easily done. Get {
map of the territorY-an oil map-an.
ask to be shown the leases of the com
pany in or near producing acreag'
which it is proposed to develop. Oi
pools in Texas cover large acreage All
many counties The locations hav,