The Raymer enterprise., 1920-09-16


IN knowing when mines a mine. and
when It's swindIe. and I guess you
have TO be . metallurgicaI shark TO
know that anyway. But the way things
have been going for the last year or
two. with all this speculation In the
metals. and all the fortunes that have
been made. sort Of set me to thinking
that with good advice. you"
Il beg your pardon" said billiard
quickly. There's been mighty little
speculation In metals, Mr.. Cullen; but
there's been q tremendous amount Of
speculation In stock. The difference
between West and East: the differ.
ence between insider and outsider |;
the difference between the capitalist
and the gambler Is ihis-the East.
the outsider and the gambler buy
stock: the West. the inxider and the
capitalist buy mines. Buy them out
right and develop them first and e.
plot them afterward. II they're good.
the West keeps them 10 itself and
pockets the profits; II they're shnky.
the West sells stocks 10 the East. and
gets Its profit that way. and calmly
steps out from under. The srt and
science Of underwriting
Now you just walt second" In
ferrupfed Angela. who had been fidget-
ing and playing with her wrist watch.
"Dad-Sfr. billiard, This Ia swfully
Interesting, but dinners 10 just q few
minutes. and"
PLENTY Of time" said Cullen. wav.
Ing her of. "Plenty OF time! Go
ahead. Mr. Hilliard. This Ii too good
TO miss. Smoke cigarette for an
appetizer
Thank you billiard. having de-
cided to take complete advantage Of
the present opportunity. marshaIed
salient details as he held match for
his host. well. perhaps ! can show
you best by an actual example. I'm
out Of the game entirely. as I said.
but ] was invited day or two ago
to JON q New York syndicate In
financing property appraised my
self In 1914. It's owned at present by
four boys with shoe-string apiece.
They can't finance II themselves. 80
they need help. and they've come to
Wall street and whispered their Sc
cret through megaphone. Now sup
pose. just to make It clear all around.
that you and and Angela are to form
syndicate to underwrite the COIN
pnny." He was sustained by the re-
Election that even though he came In
the auise Of a mountebank. there was
nothing dishonorable about the wares
he had brought to sell.
OOH" said Angela, joyously,
Thanks"
simultaneously her father gave her
little frown Of affectionnte rem0n-
STRANGE. and HIlllard gave her q little
smile Of afiectionat. esteem.
NOW. the boys who own H." said
Hilliard, ARE In such straits that We
can practically dictate our own terms.
don't mean to imply that we'd take
too great an advantage Of them, but
It's plain case OF supply and de-
mand, and we're naturally interested
In Il bargain. We go over the mine
very carefully. and find that although
I, Isn't actually producing any copper
just yet. because the owners ran out
OF money before they could get that
far, II has enough ore reserves to
guarantee at least ten thousand tons
year for twenty years, provided the
necessary equipment Is bought and put
into operation. That tonnage, with the
price Of copper where II Is now
around thirty cents-and the cost OF
production what 1t Is now. and other
factors what they are now would
eventually mean a net profit Of about
quarter OF a million dollars a year.
So first we have these present owners
organize corporation, capitalized ut
two million dollars"
Cullen smoked violently. and looked
puzzled.
You're getting out Of my depth.
How do you arrive at thatT'
That's so as 10 insure ten per cent
dividends. And the mine can pay ten
per cent. provided we can arrange to
get the capital. You see, Mr.. Cullen,
a copper mine isn't like factory. and
you cant figure II the same why, be-
cause factory runs on Indefinitely,
and II you simply replace the ma
chinery whenever II wears out, there's
nothing TO prevent the same plant
from keeping on making the same sort
Of product for hundred years. But
every pound Of ore you take out OF
mine leaves that much less for the
future, and eventually your ores GO
ing to be all gone. And II this par
ticular mine In going to be exhausted
In about twenty years. II stands to
reason that It's being exhausted ut the
rate OF one-twentieth, or five per cent,
q year. You must take that always
into consideration. And therefore,
every stakeholder Is entitled to get
back at least five per cent Of his
money each year TO cover that de-
probation. in addition to whatever he
ought to get for ordinary profits. which
10 another five per cent. Otherwise
"0h! I seer cried Angela.
prove Itw commanded HilIisrd In.