The Irish standard., 1920-05-08

quietly. eThere'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
eace between insider and outsider;
the difference between the capitalist
and the gambler is this--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 sfterward. II they're good.
the West keeps them to itself and
pockets the profits; II they're shaky,
the West sells stocks to the East. and
gets its profit that way. and calmly
steps out from under. The art and
science of underwriting Z.
"Now you Just wait second" in
tsrrupted Angela, who had been fidget-
ing aud playing with her wrist watch.
"Dad--Mr. Hilliard! This is awfully
interesting, but dinners tn just few
minutes, and"
''plenty of time" said Cullen, wav-
ing her Oft. "Plenty Of time! Go
ahead, Mr.. Hilliard.a 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 rs he held match for
his host. "Well. perhaps can show
you best by an actual example. I'm
out Of the game entirely. US I said,
but I was invited day or two ago
to Join a New York syndicate tn
financing a property l appraised my
self in 1914. It's owned at present by
four boys with 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 megaphone. Now sup
pose. just to make it clear all around.
that you aud I and Angela are to form
syndicate to underwrlte the COIN
pany." He was sustained by the re-
Election that even though he came in
the guise of a mountebank, there was
| nothing dishonorable about the wares
he had brought to sell.
"Ooh!' said Angela. joyously,
"Thanksl"
simultaneously her father gave her
little frown of affectionate remon-
STRANGE, and Hilliard gave her little
smile of affectionate esteem.
"Now, the boys who own It," said
billiard, "are in such straits that we
can practically dictate our own terms.
1 don't mean to imply that we'd take
too great an advantage of them, but
it's a plain case Of supply and de-
mand, and we're naturally interested
in bargain. We go ever the mine
very carefully, and find that although
1t isn't actually producing any copper
Just yet, because the owners ran out
| Of money before they could get that
far, it 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 It is now
around thirty cents-and the cost Of
| production what It is now, and other
| factors what they are now would
eventually mean a net profit Of about
a quarter of million dollars 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 that7"
"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,
q copper mine isn't like factory, and
you can't figure it the same way, be-
cause 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 hundred years. But
every pound of ore y0n take cut Of q
mine leaves that much less for the
future, and eventually your ores 60
ing to be all gone. And n this par
ticular mine is going to be exhausted
| In about twenty years. It stands to
reason that it's being exhausted at the
rate of one-twentieth, or Ave per cent,
| q year. You must take that always
into consideration. And therefore,
every stockholder is eAtitled to get
back at least five per cent Of hts
| money each year to cover that de-
| probation, In addition to whatever Ao
ought to get for ordinary profits, which
is another five per cent. OtAerwise-"
"Oh! I see" cried Angela.
"Prove It'll" commanded Rnliard IN
diligently.
''Why, If the company Just paid i've
per cent for twenty years, and at the
end Of It, your ore was sli gone, the
people would only just have got their
money back, and they wouldn't have
made any real profit at aDr
":Exactly" said HilHar1 80 the