Iron County news. [volume] (Hurley, Wis.) 1913-1950, 1920-05-15

! as anything else. The trouble comes
in knowing when a mines a mine. and
when it's swindle. and l guess you
have to be a metaliurgical 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"
I beg YOUR pardon" said billiard
quickly. There's been mighty little
speculation in metals, Mr.. Cullen; but
there's been 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, ths-the East,
the outsider and the gambler buy
| stock; the West, the insider and the
capitalist buy mines. Buy them out
| right and develop them first and eX-
plot them afterward. II they're good,
the West keeps them to itself and
pockets the profits; if they're shaky,
gets its profit that way. and calmly
steps out from under. The art and
science of underwriting :"
Now you just wait second" in
terrupted Angela, who had been fidget-
ing and playing with her wrist watch.
"Dad-Mr. billiard This is awfuly
interesting. but dinners in just a few
minutes. and"
"Plenty of time" said Cullen. wav-
ing her Off. plenty of time Go
ahead, Mr.. billiard. This is too good
to miss. Smoke a cigarette for an
appetizer"
Thank you" Hilliard, having de-
cided to take complete advantage of
the present opportunity, marshaled
salient details as he held a match Cor
his host. well, perhaps l can show
You best by an actual example. I'm
out of the game entirely, as l said,
bat l was invited a day or two ago
to Join a New York syndicate in
financing a property l appraised my
self in 1914. It's owned al present by
| four boys with a ShOe-String apiece.
They can't finance it themselves so
they need help, and they've come TO
Wall street and whispered their Sc
cret through a megaphone. Now sup
/ pose, just to make it clear all around,
that you and and Angela are TO form
syndicate to underwrite the com
/ rany." He was sustained by the re-
Election that even though he came in
the euise 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 atrectionate remon-
STRANGE, and billiard gave her little
smile of affeetionate esteem.
Now the boys who own It," said
| billiard. are in such straits that we
can practically dictate our own terms.
/ don't mean to imply that we'd take
100 great an advantage of them but
its a plain case of supply and de-
/ mand. and we're naturally Interested
in a bargain. We 90 over the mine
very carefully. and find that although
it isn't actually producing any copper
| lust yet. because the owners ran out
of money before they could get that
/ far. ii has enough ore reserves 10
| guarantee at least ten thousand tons
a year for twenty years, provided the
| necessary equipment is bought and put
into operation. That tonnage, with the
| price of copper where 1t is now
around thirty cents-and the cost Of
| production what II is now, and other
| factors what they are now would
| eventually mean net profit Of about
a quarter OF a million dollars a year
So first we have these present owners
organize corporation, capitalized at
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 to 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 can't figure it the same way. be
cause a factory runs on indefinitely.
and if you simply replace the ma
chinery whenever it wears out, there's
nothing TO prevent the same plant
from keeping on making the same sort
Of product for a hundred years But
every pound Of ore You TAX" out Of a
mine leaves that much less for the
I future, and eventually your ores go
ing to be all gone. And If this par
ticular mine is going to be exhausted
In about twenty years, 1t stands TO
reason that It's being exhausted at the
rate of one-twentieth, or five per cent.
a year. You Inst take that always
into consideration. And therefore,
every stakeholder is entitled 10 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
is another five per cent Otherwise