Atlanta semi-weekly journal. (Atlanta, Ga.) 1898-1920, 1919-12-12

gether with in easing destruction of coinage,
causes bankers to fear that we will find our
selves without gol to protect our reserves,
The value of speculation is much-discuSSed
question. Without speculation, some authori-
ties claim, we should not have developed as we
have induStrialy The telephone, many of our
oil wells, Cripple Creek and Goldfield gold
mines are a few out landing examples of sue
ceSSful enterprises based speculation.
Against the notable instances of speculation
that turn out we'll the thousands of cases
of pure SWindle involving loss to the investors
that far over-balance the gains of the brilliant
successes. 1t is these Swindle projects, in which
the investor has not a single chance to gain
anything, that the federal law would attack.
it does not aim to injure legitimate Specula-
ton, as certain amount OF hazard is necessary
in investment The crime of speculation is in
Misrepresentation of facts.
In the Texas oil fields the distribution of the
oil is so peculiar that the only way to locate
it is to dig. AS machinery and labor are ex-
penSive, certain amount of capital must be
collected before a shaft can be sunk. In such
a case, a promoter intent on fraud issues cir
cuarS to describe "giant guSher of oil 900
barrels day-in the heart of the oil district"
The honest proSpectOr who states facts as they
are on his circular stands little chance beside
the INSCRIPTIONS company. What inexperienced
investor would buy stock of a company that
stated frankly it believed oil to be located at
a given spot and would dig there when $4,000
capital was raised, if he could have shares in
an oil we'll Spouting up 1000 barrels a day?
Such incidents the advocates of the federal
blueS-ky law regard as unanSwerable arguments
in favor of legislation. When miSrepreS entation
of facts is penazed, the honest proSpector can
state his project plainly without being placed
at a disadvantage. Thus, they state, legti-
mate speculation will be encouraged by the pro-
posed law.
One test of genuineneSS for the investor is
that the more eloquent and lavish the promises
of stock company selling cheap stock the
less likely they are to be fulfilled. The oil we'll
if the oil gushed forth as claimed
A mine investor, telling of parallel case,
says:
"Out in the gold field man wanted to sell
me stock in mine-eaSy to get at, beautiful
prospects, | said: Have you enough money
to pay your board for month"; He nodded
Then if you were practical proSpector you
would take off your coat, pitch in and dig out
chunk of gold and take it to the bank and
sell it to get your machinery. If your mine was
what you say it is, you would keep it for your
self, instead of begging people to take gold
away from you'll"
That just such propositions as this do get
serious attention and coax the money from men
who boast of the level-headed management of
their business is one of the anomalies of hu-
man nature The word gold mine" is the. open
sesame of the wildcat stock vender.
One clever lOng-remembered scheme which
appealed to this romantic side of the public
was project to operate mine advertised as
"the lOng-loSt bullion mine of Cortez" The
"mine" was merely a cave in western noun
tain but fnincial advertisements, reeking with
illusions to Spanish gold, buccaneers and treas
ure, so thrilled the victims that they fell over
one another in their eagerness to be included in
the deal. Luckily for them, however, the pro-
sale. eye of a government agent fell on the
alluring literature of the Cortez mine. The
government detective was proof against both
romance and promises. The promoters soon
found themselves in court, and admitted the
| fraud.
! mine owner gives small investors this
advice:
! Before investing my money, look up the
man who makes out the company's reports to
see if he is known to mining engineers as an
honest man. The amount of care and time
take in proving the firms character is in pro-
! portion to the amount of money | invest.
"The investor should remember that to sink
his money in speculative project is a
pure gamble, just as to write life insurance on
only one man would be big risk But when
| the company nSureS number, the risk dimin-
iSheS So the man who buys stock in mines
only partly developed has better chance to
make profits if he ScatterS his investment"