My Adventures With Your Money - free ebook by George Graham Rice

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My Adventures With Your Money

George Graham Rice

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MY ADVENTURES WITHYOUR MONEY

MY ADVENTURES WITHYOUR MONEY

BY GEORGE GRAHAM RICE RICHARD G. BADGER THE GORHAM PRESS BOSTON Copyright, 1911, by The Ridgway Company Copyright, 1913, by Richard G. Badger All rights reserved The Gorham Press, Boston, Mass., U.S.A. To The American Damphool Speculator, surnamed the American Sucker, otherwise described herein as The Thinker Who Thinks He Knows But Doesn't— greetings ! This book is for you! Read as you run, and may you run as you read. G. G. R. New York , March 15, 1913....

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FOREWORD

FOREWORD

You are a member of a race of gamblers. The instinct to speculate dominates you. You feel that you simply must take a chance. You can't win, yet you are going to speculate and to continue to speculate—and to lose. Lotteries, faro, roulette, and horse-race betting being illegal, you play the stock game. In the stock game the cards (quotations or market fluctuations) are shuffled and riffled and STACKED behind your back, AFTER the dealer (the manipulator) knows on what side you have placed your be

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THE BIRTH OF AN IDEA TO COIN MONEY

THE BIRTH OF AN IDEA TO COIN MONEY

"Do these people make money?" I asked Campbell. "Yes, they must," he answered, "because the ads have been running every day for months and months." "Well, if poorly written ads like these can make money, what would well-written ads accomplish, and particularly from an information bureau which might give real information?" I queried. A moment later the ticker began its click, click, click. "Here come the entries," said Campbell. He went to the tape and ejaculated, "By Jiminy! Here's Silver Coin e

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THE HIGHER MATHEMATICS OF THE OPERATION

THE HIGHER MATHEMATICS OF THE OPERATION

But it was really sophistry. If the horse lost, the inserter of the Maxim &amp; Gay advertisement would be out exactly $7. If the $7 was used to bet on the horse, the most that Maxim &amp; Gay could win would be $70. I was taking the same losing risk as the bettor, with a greater chance for gain. By investing $7 in the advertisement, it was possible for me to win much more money from the public by obtaining their patronage for the projected tipping bureau. I recall that the experimental

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HOW "THE ONE BEST BET" WAS COINED

HOW "THE ONE BEST BET" WAS COINED

Our methods of advertising were unique. We used full pages whenever possible, and it was a maxim in the establishment that small type was never intended for commercial uses. We used in our big display advertisements a nomenclature of the turf that had never before been heard except in the vicinity of the stables, and we coined words and phrases to suit almost every occasion. The word "clocker," meaning a man who holds a watch on horses in their exercise gallops, was original with us, and has sin

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REAL INSIDE TURF INFORMATION

REAL INSIDE TURF INFORMATION

Maxim &amp; Gay repeated the "Silver Coin" method of advertising only once during the entire career of the company. This happened in the spring of 1902, when John Rogers, trainer for William C. Whitney, sent to the post a mare named Smoke. Our information was that the mare would win, and our selections for the day named her to win—and she did. Two days later, she was again entered, against an inferior class of horses, and the handicap was entirely in her favor. Notwithstanding this, we inser

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THE PUBLIC ASKS TO BE MYSTIFIED

THE PUBLIC ASKS TO BE MYSTIFIED

The judges were apparently satisfied, but the public could not readily understand the truth, and we didn't point it out in our advertisements, because our policy was always to appear as mysterious as possible as to the source of our information. Mystery played an important rôle in our organization, and it would have been better had we never succeeded in the Smoke coup. Up to this time my personal identity had not been revealed at the race-track, and even the bookmakers did not know who was the g

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PRESTIGE RESTORED BY A CLERK'S RUSE

PRESTIGE RESTORED BY A CLERK'S RUSE

In the Summer of the second year of Maxim &amp; Gay's great money-gathering career, the Information Bureau was "out of luck" and the patronage of the Bureau fell away to almost nothing. At this period I was seriously ill and confined to my home. A man in my office decided to take advantage of my absence from the scene to improve business a bit on his own hook. It was the habit of our track salesmen, dressed in khaki, to appear at the office at noon every day and receive a bundle of envelopes

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A BOASTFUL RACE PLAYER GIVES AID

A BOASTFUL RACE PLAYER GIVES AID

I was not present, but I learned as soon as I became convalescent that on the afternoon of the day the advertisement appeared claiming credit for May J. at 200 to 1, the office was thronged with new customers who enrolled for weekly subscriptions at a rate that put new life into the business. A few of the customers expressed some doubt as to whether Maxim &amp; Gay gave out the 200 to 1 shot or not. That afternoon there appeared on the scene a race player who, laying $5 down on the desk, sai

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FORTUNE CHANGES HER MOOD AND SMILES AGAIN

FORTUNE CHANGES HER MOOD AND SMILES AGAIN

Peculiarly enough, the May J. advertisement was followed by a series of brilliant successes for Maxim &amp; Gay in the selection of winners at big odds, and, within a month our net earnings again reached $20,000 per week. Horse owners, horse trainers and society people who frequented the club-house at the race-track were our steadiest patrons. The women particularly were most loyal to our bureau. The wife of a young multi-millionaire of international prominence was one of our most ardent fol

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THE KENTUCKY COLONEL FALLS IN LINE

THE KENTUCKY COLONEL FALLS IN LINE

After separating himself from much cash, while one of his very intimate friends was "cleaning up" plenty of money on our selections, he finally strolled into our office one morning and sheepishly stated that one of his "fool friends" had asked him to step in and get our "fool selections" for him. We explained that it was against our rule to give out our choices before 12:30 P.M., whereat he grew exceedingly wroth. He finally agreed to our conditions, paid his money and was given an order to get

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BETTING THE PUBLIC'S MONEY AT GREAT PROFIT

BETTING THE PUBLIC'S MONEY AT GREAT PROFIT

The Eastern racing season was about to close and it was decided to remove the entire force of clerks to New Orleans for the Winter and there to depart from the usual practice of selling tips only, and to bet the money of the American public on the horses at the race-track in whatever sums they wished to send. The company employed Sol Lichtenstein, then the most noted bookmaker on the American turf, to bet the money, and made him part of the organization, giving him an interest in the profits. Th

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$130,000 IS LOST AND WON IN A DAY

$130,000 IS LOST AND WON IN A DAY

That incident is not easily forgotten by several. On this day the entry which we selected was one of Durnell &amp; Hertz's string. The horse was known to be partial to a dry track. The "dope" said he could not win in heavy going. It was a beautiful sunshiny morning when we selected this horse to win, and at noon the envelopes containing the name of the horse were mailed in the post-office, as usual. Something happened. Half an hour before the race was run it began to rain in torrents and the

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A DISASTROUS NEWSPAPER WINDUP

A DISASTROUS NEWSPAPER WINDUP

During the progress of the New Orleans meeting, I purchased a controlling interest in the New York Daily America —a newspaper patterned after the Morning Telegraph —from a group of members of the Metropolitan Turf Association, who had sunk about $75,000 in the enterprise. The Morning Telegraph was in the hands of a receiver. I calculated that, by transferring the Maxim &amp; Gay advertisements from the Morning Telegraph to the Daily America , I could make the Daily America pay and force the

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A PARTNERSHIP OF PURE NERVE

A PARTNERSHIP OF PURE NERVE

"Jack Hornaday" discontinued business. I began to like San Francisco and the Coast. Being thrown among Arkell's associates in the Palace Hotel lobby, from time to time I naturally heard a great deal of talk about the new Nevada mining camp of Tonopah. "Rice," said Arkell one evening, "come with me up to Tonopah and be my press agent. We will get hold of a mining property up there, promote a company and make a barrel of money." "What do you know about mines?" I asked. "Well, I've lost enough in '

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BUCKING THE TIGER ON THE DESERT

BUCKING THE TIGER ON THE DESERT

Arriving In Tonopah after dusk, we sought hotel accommodations. The best we could get was a bed in a forbidding looking one-story annex, walled with undressed pine and roofed with tarpaulin. It was located 100 feet to the rear of the hotel, which was already crowded with miners and soldiers of fortune drawn from all quarters of the world by the mining excitement. Its aspect was so inhospitable that Arkell and I decided not to retire for a little while. We gravitated out toward the barroom, where

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BIDDING $3,000,000 WHEN BROKE

BIDDING $3,000,000 WHEN BROKE

After breakfast, which consisted of mountain trout, the flavor of which was more delicious than anything I had tasted in many years—probably because of the artificial hunger which an empty purse had created—we returned to the office of the bank. There Arkell explained to Mr. Macdonald that he wanted "a big mining proposition or nothing." He said he represented big Eastern capital and that he was prepared to pay from one to three millions for the right kind of property. Mr. Macdonald named some m

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MILLIONS IN THE VISTA HELD NO CHARMS

MILLIONS IN THE VISTA HELD NO CHARMS

Arkell wrote a dispatch to the East in the presence of our newly-made friends, describing the offering. Then he and I held a consultation, and he vouchsafed the information that we would certainly get a free automobile ride to Goldfield and have a chance to see there the new boom mining camp. I got "cold feet." Arkell's talk of visionary millions in that bleak environment of snow-clad desert and wind-swept mountain didn't enthuse me at all. I protested against the proposed trip to Goldfield, and

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"HUMAN INTEREST" VERSUS TECHNICAL MINING

"HUMAN INTEREST" VERSUS TECHNICAL MINING

After Arkell's departure for Tonopah I went to the office of the Goldfield News and asked for a job. I got it, at $10 a day. My first assignment was to interview an old miner named Tom Jaggers. I wrote what I considered a first-class human-interest story, and handed it to the owner and editor, "Jimmy" O'Brien. He thought it was fair writing, but not the sort of matter the Goldfield News wanted. It wanted technical mining stuff. Of course I didn't know a winze from a windlass, nor a shaft from a

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BEGINNING THE ADVERTISING BUSINESS

BEGINNING THE ADVERTISING BUSINESS

The idea of applying to the American Newspaper Publishers' Association for recognition did not occur to me. I did not know that such was the practise of agents. I did believe, however, from my ad-writing experience with the Maxim &amp; Gay Company, in New York, that I could write money-getting advertising copy. Further, my experience in making contracts with advertising agents for the publication of Maxim &amp; Gay's advertising in the newspapers throughout the land had, it seemed, conve

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SOME ADVERTISING THAT PAID

SOME ADVERTISING THAT PAID

My second best customer was January Jones, the noted Welsh miner, and later, when the corporation of Patrick, Elliott &amp; Camp swung into business as promoter, I placed its advertising. I held it, too, until the death of C. H. Eliott, when the control of that firm fell into other hands and it ultimately went out of business. In the course of three years my advertising agency inserted in the neighborhood of $1,000,000 worth of advertising in the newspapers of the United States, chiefly thos

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BUILDING GOLD MINES WITH PUBLICITY

BUILDING GOLD MINES WITH PUBLICITY

A little later I organized a news bureau as an adjunct of the advertising agency. It is acknowledged that this news bureau accomplished much for Nevada. As a matter of fact, it is generally conceded by Goldfield pioneers and by mining-stock brokers throughout the country that the news bureau was directly responsible for bringing into the State of Nevada tens of millions of dollars for investment, and was indirectly responsible for the opening up of the Mohawk and other great gold mines of the Go

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HAIR-RAISING STORIES FOR DISTANT READERS

HAIR-RAISING STORIES FOR DISTANT READERS

That news bureau, with its headquarters on the desert, at a time when water was commanding $4 a barrel in Goldfield and coal could not be obtained in the camp for love or money, was operated with as much calculating judgment as it could have been were it subsidized by the most powerful interests in America. Human-interest stories that were written around the camp, its mines and its men, were turned out every day by competent newspaper men. These were forwarded to the daily newspapers in the big

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THE MERCURY OF SPECULATION

THE MERCURY OF SPECULATION

Mining-stock speculators and investors at a distance who responded to the red-hot publicity campaign which marked those early days of Goldfield rolled up enormous profits, and I made no mistake. Terrific losses came eighteen months later, as a result of a madness of mining-stock speculation which followed on the heels of the great Mohawk boom and the merger of various Goldfield producers into a $36,000,000 corporation. This was taken advantage of by "wild-catters" in every big city of the countr

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THE BIRTH OF BULLFROG

THE BIRTH OF BULLFROG

At this juncture the new mining camp of Bullfrog, 65 miles south of Goldfield, was born. My publicity facilities were sought by owners of properties in Bullfrog "to put the camp on the map." C. H. Elliott, a Goldfield pioneer, put an automobile at the disposal of myself and my stenographer, and we departed for Bullfrog. Elliott and his associates had staked out a townsite which they called Rhyolite. I was presented with seven corner lots on my arrival, to help along my enthusiasm. There, on the

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ENTER, CHARLES M. SCHWAB

ENTER, CHARLES M. SCHWAB

Engineer Macdonald incorporated a company for 1,250,000 shares of the par value of $1 each, to own and operate the mine. Investors were permitted by him to subscribe for small blocks of treasury stock at $2 per share. Shortly afterward Mr. Macdonald and the owner of the other half interest, Bob Montgomery, sold a controlling interest to Mr. Schwab and associates for a sum which has never been made public. Mr. Schwab at once reorganized the company, took in two adjoining properties that were unde

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WHY THE BOTTOM FELL OUT

WHY THE BOTTOM FELL OUT

When Montgomery-Shoshone was enjoying its market hey-day the Bullfrog Gold Bar Mining Company was promoted at around 15 cents a share on the usual million-share capitalization. A year later the price jumped to $2.65 on the San Francisco Stock Exchange, and the stock was widely distributed among investors. Recently the company was in the sheriff's hands. The biggest losers in this venture were Alabama people, who had great confidence in the promoters. Other Bullfrog derelicts in which the public

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HOW ABOUT THE PUBLIC'S CHANCES?

HOW ABOUT THE PUBLIC'S CHANCES?

I asked Mr. Elliott one evening, shortly after Patrick, Elliott &amp; Camp earned their first $250,000 from their three Manhattan promotions, whether he did not think the public was entitled to subscribe for this stock at a lower price and at a smaller profit to his corporation. I recall that he said: "The article we sell is something that somebody wants and is willing to pay for. What we have sold them is worth what we have charged. The fact that we are on the ground and have endured hardsh

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JUMPING JACK MANHATTAN

JUMPING JACK MANHATTAN

I was again in funds as the result of my profits in the Manhattan boom, and it was again my wont, for want of any other pastime, to play faro at night. I found myself gossiped about with men like January Jones, Zeb Kendall, C. H. Elliott, Al. Myers and others who rolled in money one day and were broke the next. The second largest gambling-house in Goldfield was owned by "Larry" Sullivan and Peter Grant, both from Portland, Oregon. Sullivan claimed that he was attracted to Goldfield by the storie

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TRYING IT ON THE STRAY DOG

TRYING IT ON THE STRAY DOG

The Stray Dog Manhattan mine was furnishing daily sensations in the way of frequent strikes of fabulously rich ore. I urged that, no matter how small the profit, the Sullivan Trust Company should begin its corporate career with the promotion of a property as good as the Stray Dog. The Stray Dog was for sale—at a price. One interest, of 350,000 shares, owned by Vermilyea, Edmonds &amp; Stanley, the law firm of highest standing in Goldfield, could be acquired at 45 cents a share, and another i

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ADVERTISING FOR THINKERS

ADVERTISING FOR THINKERS

Having "tried on the dog" my methods of advertising for nearly two years, that is to say, having conducted an advertising agency for mine promoters, and learned the business with their money, I had passed through the experimental stage and now marshalled a cardinal principal or two that I decided must guide me in the operations in which I had become more directly interested. I resolved never to allow an advertisement to go out of the office that was unconvincing to a thinker. If my argument conv

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YES, "BUSINESS IS BUSINESS"

YES, "BUSINESS IS BUSINESS"

The offices of the trust company were furnished on an elaborate scale, resembling the interior of a banking institution of a large city. The offices became the headquarters of Eastern mining-stock brokers whenever they arrived in camp. One morning J. C. Weir, a New York mining-stock broker, whose firm held an option from the trust company on 100,000 shares of Stray Dog stock, was ensconced in one of the two luxuriously furnished rooms used as executive offices. Mr. Weir's firm was one of our sel

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FORTUNES THAT WERE MISSED

FORTUNES THAT WERE MISSED

Soon the Mohawk of Goldfield began to give unerring indications of being the wonderful treasure-house it has since proved to be. Hayes and Monnette, who owned a lease on a small section of the property, had struck high-grade ore and were producing at the rate of $3,000 per day. A few weeks later it was reported that the output had increased to $5,000 a day. The Mohawk being situated only a stone's throw from the Combination mine, the idea that the Mohawk might turn out to be another Combination

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THE TALE OF BULLFROG RUSH

THE TALE OF BULLFROG RUSH

Following the Eagle's Nest promotion, the Sullivan Trust Company became sponsor for Bullfrog Rush. I had met Dr. J. Grant Lyman, owner of the property, on the lawn of one of the cottages of the United States Hotel in Saratoga a few years before, where he raced a string of horses and mixed with good people, and I knew of nothing that was to his discredit. Dr. Lyman bought the Bullfrog Rush property for $150,000. I was present when he paid $100,000 of this money in cash at John S. Cook &amp; C

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PRIZE FIGHTS AND MINING PROMOTION

PRIZE FIGHTS AND MINING PROMOTION

For a fortnight there was a lull in news of sensatorial gold discoveries, but the approaching Gans-Nelson fight, which was arranged to be held in Goldfield on Labor Day, September 3, furnished sufficient exciting reading matter for the newspapers throughout the land to keep the Goldfield news pot boiling. The Sullivan Trust Company had guaranteed the promoters of the fight against loss to the extent of $10,000, and other camp interests put up $50,000 more. Gans, the fighter, was without funds to

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THE YEAR OF BIG FIGURES

THE YEAR OF BIG FIGURES

I soon recouped these stock-market losses. At about four o'clock one afternoon, a few days afterward, a miner who had been at work during the day on the Loftus-Sweeney lease of the Combination Fraction, called at the office of the trust company and asked me to buy 1,000 shares of Combination Fraction stock for him. He divulged to me that just as he was coming off shift he had learned that a prodigious strike of high-grade ore had been made at depth. Combination Fraction had closed that afternoon

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THE STORY OF GOLDFIELD CONSOLIDATED

THE STORY OF GOLDFIELD CONSOLIDATED

Rumors were rife in Goldfield of a merger of mammoth proportions which was said to be on the tapis. Great as were the gold discoveries in camp, they did not justify the terrific advances being chronicled in the stock-market, and it was apparent that something extraordinary must be hatching to justify the market's action. George Wingfield, who had enjoyed a meteoric career, rising within five years from a faro dealer in Tonopah to the ownership of control in the Mohawk and many other mining compa

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AT THE HEIGHT OF THE FRENZY

AT THE HEIGHT OF THE FRENZY

The difference between the market price of listed Nevada stocks on November 15, 1906, and that of to-day is in excess of $200,000,000. A fair estimate of the public's real-money loss in the listed division is $150,000,000. Nor was this all of the damage that was done. When excitement in Goldfield's listed stocks reached a frenzy, wild-catters operating from the cities got into harness, and within three months in the neighborhood of 2,000 companies, owning in most instances properties situated mi

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GETTING INTO THE GAME

GETTING INTO THE GAME

The birth of the $25,000,000 merger, to take in two properties that had not yet matriculated even in the baby-mine class and were actually suspected at the outset by mining men in Goldfield to be wildcats, was the signal for an outpouring in quick succession of Greenwater promotions from all centers, of which the annals of the industry in this country chronicle no counterpart. At the height of the boom there was promoted out of Los Angeles and New York the Furnace Creek Consolidated Copper Compa

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ALL THE COPPER IN THE WORLD

ALL THE COPPER IN THE WORLD

UNITED STATES Senator George S. Nixon of Nevada lent his name, along with H. H. Clark, William Bayley and H. J. Woollacott, as a director of the Greenwater Furnace Creek Copper Company, with a capitalization of $1,500,000. The prospectus of this company announced that the ores were "melaconite, azurite, chalcocite, and occasionally chrysocolla, averaging 18 to 36 per cent. (copper) tenor." "Taking the lowest percentage of ore reported by the company," says Horace Stevens in the Copper Handbook o

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THE COLLAPSE OF GREENWATER

THE COLLAPSE OF GREENWATER

THE offering turned out to be a "bloomer," the first the Sullivan Trust Company had met with. E. A. Manice &amp; Company did not dispose of as many as 30,000 shares. Neither did the stock offered later by the Sullivan Trust Company through brokers in other cities sell freely. Just at the moment when we announced our offering of Furnace Creek South Extension the Greenwater boom began to crack. Oscar Adams Turner, who promoted the Tonopah Mining Company of Nevada, which has paid $8,000,000 in

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THE SHAME AND THE BLAME

THE SHAME AND THE BLAME

I CITE the instance of the Sullivan Trust Company "falling" for Greenwater, after hesitating about embarking on the enterprise for weeks, and I am convinced that others fell the same way. The Sullivan Trust Company did not touch a Greenwater property until its clients and its clientele among the brokers throughout the Union had burned up the wires with requests for a Greenwater promotion, and when it did finally "fall" it lost its own money, the only other sufferers being a handful of investors

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THE RISE OF WINGFIELD AND NIXON

THE RISE OF WINGFIELD AND NIXON

ANY one in Goldfield who was willing to admit that stocks were selling too high at the time was decried as a "knocker." You could borrow freely on all listed Goldfield stocks at John S. Cook &amp; Company's bank, owned by the promoters of the Goldfield Consolidated, and the men of the camp for that reason felt that there must be concrete value behind nearly all of them. Brokers in Eastern cities reported that few of their customers were willing to take profits even at the prices to which sto

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THE WINNINGS OF A TENDERFOOT

THE WINNINGS OF A TENDERFOOT

What about me? Where did I stand and what was my position at this conjuncture? Did I have foresight? Did I realize that stocks were selling at much higher prices than were warranted by intrinsic worth and speculative value? Was not the fact that the mergerers and waterers of Goldfield Consolidated were in command of the mine, market and bank situation sufficient to make me suspect that possibly the cards might be stacked and that maybe cards were being dealt from the bottom of the deck? Was I, i

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I AM LANDED HIGH AND DRY

I AM LANDED HIGH AND DRY

The Nevada State election took place in November. The Democratic ticket, headed by "Honest" John Sparks for Governor and Denver S. Dickerson for Lieutenant-Governor, was victorious. The Republican ticket, headed by J. F. Mitchell, a mining promoter and engineer, backed by United States Senator Nixon, the Republican political boss, suffered humiliating defeat. Denver S. Dickerson was the candidate of the labor unions. During a former labor war in Cripple Creek Mr. Dickerson had been confined in t

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THE BEGINNING OF THE RAID

THE BEGINNING OF THE RAID

Soon it was reported to me that Senator Nixon was advising people at all points who held Sullivan stocks, or knew of anybody who held them, to unload. From San Francisco came word that a clique of brokers was operating for the decline. On the following Monday the market on the San Francisco Stock Exchange opened strong and buoyant, and it looked for a moment as if the selling movement had collapsed. I felt relieved. My 'phone bell rang. A stock broker of Tonopah called me on the long distance. "

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SOME PERTINENT PERSONALITIES

SOME PERTINENT PERSONALITIES

The same stuff has recently appeared without signature in a Goldfield paper which originally came into possession of George Wingfield through foreclosure proceedings, and in a Reno evening paper which is controlled by Senator Nixon, who owns a large slice of the paper's mortgage. It has also appeared in other papers "friendly" to Wingfield and Nixon. Tens of thousands of copies of the Goldfield publication containing the anonymous libel have been sent broadcast. Other newspapers have reproduced

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THE TIME WHEN MONEY TALKS

THE TIME WHEN MONEY TALKS

Some of our brokers in San Francisco now demanded an independent bank guaranty that the drafts on us would be honored. We asked for a line of credit at the State Bank &amp; Trust Company. It was promptly given. As fast as the brokers asked for a guaranty, the State Bank &amp; Trust Company telegraphed them formally that it would honor our paper to the extent of $20,000 or $30,000 in every case. To protect the bank and in order to be able to borrow a large sum of money, should we need it

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CLOUDS IN THE WESTERN SKY

CLOUDS IN THE WESTERN SKY

A new black cloud showed itself on the horizon. A labor war was threatened in Goldfield. It was very apparent, from the conduct of George Wingfield, that he was baiting the miners, and it appeared to be the general opinion of the people of Goldfield that he was trying to precipitate trouble. The miners had asked for higher wages. The Sullivan Trust Company, which was operating seven properties with a monthly pay-roll of $50,000, was the first to express a willingness to grant the terms. Wingfiel

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FROM CREDIT TO CRASH

FROM CREDIT TO CRASH

To convey an idea as to the standing of the L. M. Sullivan Trust Company during this crucial period, I cite an instance. Logan &amp; Bryan, members of the New York Stock Exchange, Chicago Stock Exchange, Chicago Board of Trade, New Orleans Cotton Exchange and all other important exchanges, who conduct a leased-wire system from coast to coast at a cost of $300,000 per annum, and who have over 100 correspondents in nearly as many cities, all of high standing as stock brokers, made a tentative

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DOWN WITH THE SULLIVAN TRUST COMPANY

DOWN WITH THE SULLIVAN TRUST COMPANY

By this time I was "all in" physically. I had a cyst, of fifteen years' growth, on the back of my head. It had become infected. I was threatened with blood-poisoning. I suffered much pain. I had been on the desert for nearly three years, without leaving it for a day. My associates insisted that I go to Los Angeles immediately for treatment and a rest. Believing that the trust company was secure, I made preparations to go. Before leaving I busied myself with the preparation of a dozen full-page r

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SOME HINDSIGHT THAT CAME TOO LATE

SOME HINDSIGHT THAT CAME TOO LATE

I attribute the destruction of the Sullivan Trust Company to six factors, namely, (1) politics; (2) blackmail; (3) lack of wide distribution of our later promotions, we having sold most of these stocks in large blocks during the exciting boom days through brokers to speculators instead of disposing of them in small lots direct to investors; (4) my lack of knowledge of markets and inexperience in market manipulation; (5) my own stubborn pride and optimism, and (6) the failure of the State Bank &a

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AN ORGY IN MARKET MANIPULATION

AN ORGY IN MARKET MANIPULATION

This market melodrama was well staged. It had a sensational start-off, and action was at high tension every minute. The performance had covered a period of seven months when I arrived in New York, and was reaching its climax. It was a wild orgy in market-manipulation and money-fleecing that had no parallel in history from the early Comstock days up to and including Greenwater. As a mining-stock boom it was a dizzy, bewildering success—full of red fire and explosions to the last curtain climax. W

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THE GUGGENHEIMS ENTER NIPISSING

THE GUGGENHEIMS ENTER NIPISSING

Boom! Boom! Boom! went Nipissing. By the time the price crossed $20 the gamblers and speculators of two continents were on fire with excitement. Presently it became noised about that the Guggenheim family had taken an option on 400,000 shares of Nipissing stock at $25 a share, making the investment $10,000,000, and putting a valuation of $32,000,000 on the property. Furthermore, it was announced that the deal had been made on the report and advice of John Hays Hammond, the international mining e

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NIPISSING ON THE TOBOGGAN

NIPISSING ON THE TOBOGGAN

The price of Nipissing tobogganed from $33 to under $6 with terrific speed. W. B. Thompson and his associates, who had unloaded their holdings on the way up, were reported to have taken advantage of the Beatty report and to have sold the market short on the way down, making another "clean-up" of millions. The stock hit a few hard spots on the descent, but when the wreckage was cleared away and the dead and wounded assembled, there wasn't hospital or morgue space to accommodate half of them. The

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WHO GOT THE $75,000,000?

WHO GOT THE $75,000,000?

But what of the public? It played $75,000,000 to $100,000,000 into the game, and has never yet learned who got it. Who did get it? Some of the details of the grand separation scheme have been set forth in the foregoing, but nothing like enough to satisfy the curiosity of the public who footed the bill, paid the freight, contributed sucker-toll for the whole prodigious sum. Did the author of the report on the strength of which tens of millions were plunged on Nipissing by an army of deluded inves

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THE WONDER MINING-CAMP STAMPEDE

THE WONDER MINING-CAMP STAMPEDE

I was back in Nevada just a week when a stampede into a new mining camp called Wonder took place. I was quick to join in the rush. The Philadelphia crowd who owned control of the big Tonopah mine had annexed a property there which they named the Nevada Wonder. It boasted of a big tonnage of low-grade silver-gold ore. On arrival at Wonder, I found my former Goldfield partner, L. M. Sullivan, on the ground. He entreated me to allow him to cut in on any deal I made. A bargain was struck. He agreed

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TEAGUE ATTACKS SENATOR NIXON

TEAGUE ATTACKS SENATOR NIXON

Mr. Teague was on the job just a week when he cut loose with an attack on United States Senator George S. Nixon of Nevada in a front-page story headed "Goldfield in the Grasp of Wall Street Sharks." The article declared that Senator Nixon, needing $1,000,000 to conclude the merger plans of the Goldfield Consolidated, had got it through B. M. (Berney) Baruch of the New York Stock Exchange, factotum of Thomas F. Ryan, at terrible cost. The loan was made at a time when Goldfield Consolidated was se

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"CALLING FOR A SHOW-DOWN"

"CALLING FOR A SHOW-DOWN"

When Mr. Teague finished narrating to me what had transpired I was beside myself. Presently I gave him these instructions: "Write out the interview with the Senator. Have two carbon copies made. When finished, take the three copies over to the Senator and have him read them and put his O.K. on them. After you have done that, give the Senator one copy, give the printer a copy, and put the other copy in the safe. As soon as the copy of the interview is in the printer's hands, sit down and write an

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MANIPULATING GOLDFIELD CON

MANIPULATING GOLDFIELD CON

About a week after the publication of the editorial headed "Nixon a Senator with a Blackmailing Mind," when Goldfield Consolidated stock had slumped to around $7, the Nevada Mining News in big bold-faced type urged its readers to place their buying orders for Goldfield Consolidated at $4 a share, saying that New York mining-stock brokers advised their clients that the stock would almost certainly go down to that figure because of the Senator's mistakes in the financial management of the company.

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ENTER, NAT. C. GOODWIN & CO.

ENTER, NAT. C. GOODWIN & CO.

A mining partnership between Nat. C. Goodwin, the actor, and Dan Edwards had been formed at Reno a little before this time. Dan Edwards was a hustling young mining man who had engaged in the business of "turning" properties to promoters. In August, when Goldfield Consolidated was selling around $7.50, Mr. Edwards had asked me to give him a good market tip. I told him to sell Goldfield Consolidated short. When it hit $6.50 around October 1st he saluted me thus, "Got to hand it to you. I have been

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THE STORY OF THE GOLDFIELD LABOR "RIOTS"

THE STORY OF THE GOLDFIELD LABOR "RIOTS"

A large force of miners was discharged from the Goldfield Consolidated properties. The action of the company in laying off its men at such a distressful period was denounced. It was alleged that Senator Nixon's Goldfield bank could not afford to pay out the money on deposit to the credit of the company because it was required for bank purposes. The money was apparently being hoarded during the money stringency to help the bank out of a tight place. After-events appeared fully to confirm this the

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THE DEATH OF GOVERNOR SPARKS

THE DEATH OF GOVERNOR SPARKS

Feeling under a weight of obligation to Governor Sparks, who had headed nearly all of the Sullivan Trust Company promotions as president, I tried editorially in the Nevada Mining News to justify the Governor's action. But it was a wee voice drowned in an ocean of adverse opinion and was entirely without echo. It didn't even soothe the Governor. The Governor, honest, simple old man, broken in purse, in health and in spirit, grieved over the President's denouncement, took to bed, and died of a bro

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REAL GOLD AT RAWHIDE

REAL GOLD AT RAWHIDE

Half a day's tramp over the hills seemed sufficient to convince anybody that the best of the practical miners of Nevada had put the stamp of their approval on the district. Most of the hundred or more operating leases of Rawhide were owned by these hard-rock miners. More than half a dozen surface openings on Grutt Hill showed the presence of masses of gold-studded quartz. At the intersection of Rawhide's two principal thoroughfares a round of shots in a bold quartz outcrop revealed gold-silver o

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THE RAWHIDE COALITION MINES COMPANY

THE RAWHIDE COALITION MINES COMPANY

Grutt Hill, Hooligan Hill, a part of Balloon Hill, and the intervening ground, forming a compact group of eight claims, 160 acres, were owned by a partnership of eight prospectors. The area formed the heart and backbone of the whole mining district. I soon "tied up" this property for Nat. C. Goodwin &amp; Company of Reno, with whom I was identified. A company, with 3,000,000 shares of the par value of $1 a share, was incorporated to take title. It was styled the Rawhide Coalition Mines Compa

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A RACE OF GAMBLERS

A RACE OF GAMBLERS

Prior to the birth of Rawhide I had for seven years catered to the speculative (gambling) instinct of the American public, chiefly in building mining camps and financing mining enterprises. I now realized that in order to make a success of the undertaking before me, namely, to put the new camp of Rawhide on the investment map, I must again appeal loudly to the country's gambling instinct. Maybe you think, dear reader, that a man who caters to the gambling instinct of his fellow men, be his inten

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PUBLICITY VIA ELINOR GLYN

PUBLICITY VIA ELINOR GLYN

At this early stage in Rawhide's history the reigning literary sensation of two continents was "Three Weeks." Nothing, reasoned the correspondents, would attract more attention to the camp than having Mrs. Elinor Glyn at Rawhide, particularly if she would conduct herself while there in a manner that might challenge the criticism of church members. Sam Newhouse, the multimillionaire mining operator of Utah, famous on two continents as a charming host, especially when celebrities are his guests, w

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"AL" MILLER'S SIEGE

"AL" MILLER'S SIEGE

Elinor Glyn's experiences in Rawhide were by no means the most interesting that newspaper readers of the United States were privileged to read during the course of the press-agenting of the camp. "Al" Miller was one of the first experienced mining operators to get into Rawhide. He landed in camp in the early part of 1907. After a thorough inspection of the mine showings throughout the district, he hit upon the Hooligan Hill section of the Rawhide Coalition property as a likely-looking spot to de

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THE FUNERAL ORATION FOR RILEY GRANNAN

THE FUNERAL ORATION FOR RILEY GRANNAN

In April, 1908, Riley Grannan, the noted race-track plunger, died of pneumonia in Rawhide, where he was conducting a gambling house. He was ill only a few days and his life went out like the snuff of a candle. When all the gold in Rawhide's towering hills shall have been reduced to bullion and not even a post is left to guide the desert-wayfarer to the spot where was witnessed the greatest stampede in Western mining history, posterity will remember Rawhide for the funeral oration that was pronou

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AMONG THE "BIG FELLOWS"

AMONG THE "BIG FELLOWS"

If you don't think the character of the press-agent's work during the Rawhide boom was comparatively high class and harmless, dear reader, you really have another "think" coming. At a time when Goldfield Consolidated was wobbling in price on the New York Curb and the market needed support, just prior to the smash in the market price of the stock from $7 to around $3.50, the New York Times printed in a conspicuous position on its financial page a news story to the effect that J. P. Morgan &am

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THE REVERSE ENGLISH

THE REVERSE ENGLISH

Now, about the "reverse English" in this line of press-work. Similar ways and means, dear reader, that are just as scientific in their insidiousness have been used upon you to poison your mind against the value of mining investments of competing promoters, when it has been found to the interest of powerful men to bring this about. When the offices of B. H. Scheftels &amp; Company, with which I was identified, were raided in seven cities by Special Agent Scarborough (since permitted to resign

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THE POWER OF THE PUBLIC PRINT

THE POWER OF THE PUBLIC PRINT

In the Saturday Evening Post of December 31, 1910, there appeared an article headed, "Launching a Corporation. How the Pirates and Merchantmen of Commerce Set Sail. By Edward Hungerford," from which I quote, without the omission or change of so much as a comma. Referring, in my opinion to Ely Central, promoted by myself and associates, Mr. Hungerford says: Here is a typical case—a mining property recently exploited on the curb market, the shipyard of many of these pirate craft: a prospect locate

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RAWHIDE AGAIN

RAWHIDE AGAIN

To return to Rawhide. As a result of the "scientific" press-agenting which the camp received, a frenzied stampede ensued. The rush was of such magnitude that it stands unparalleled in Western mining history. Not less than 60,000 people journeyed across the desolate, wind-swept reaches of Nevada's mountainous desert during the excitement. Not less than 12,000 of these remained on the ground for a period of several months. Mining-camp records were broken. The maximum population of Goldfield during

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GOOD BIG FISH VS. BAD LITTLE FISH

GOOD BIG FISH VS. BAD LITTLE FISH

Ask the casual newspaper reader to define offhand the compound adjective Get-Rich-Quick and he will tell you it is applied solely to professional promoters who employ flamboyant advertising methods, promise great speculative profits, use other devices which are calculated to separate the public from its money, and are in every instance dishonest. That is the idea which powerful "interests" have inculcated in the public mind by subtle, insistent press-agenting. Time and again during the progress

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RIGHTEOUS WALL STREET AND THE "SUCKER" PUBLIC

RIGHTEOUS WALL STREET AND THE "SUCKER" PUBLIC

The New York Stock Exchange member will tell you that the evil of bucketshopping is that the bucketshopper is tempted when the public is long on stocks to depress the market by heavy short sales. On the other hand, the bucketshopper urges upon you that his business is gambling against fluctuations which he has no hand in making and that the financial powers of Wall Street resort to the same trick that he is occasionally accused of. The "interests" know at every hour in the day approximately how

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THE MARKETING OF MINING STOCK

THE MARKETING OF MINING STOCK

As a rule, it takes much money to make a paying mine out of a promising prospect. Later on in the mine's progress, through the constructive period, other very large sums are generally required to pay for the blocking out of an ore reserve and to supply milling facilities for the reduction of the ores. The peripatetic mining prospector of our Western mining empire—the dauntless finder of mines who laughs at hardship and ridicules the thought of danger, who makes companions of Gila monsters and th

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I BUCK THE WALL STREET GAME

I BUCK THE WALL STREET GAME

After I had conducted the big camp publicity campaign of Rawhide, which I had done with a view to centering the attention of the American investing public on the speculative possibilities of the stock of the Rawhide Coalition Mines Company, and in that way endeavored to finance the proposition—after I had failed by this method, in the teeth of the bankers' panic of 1907-8, to dispose of enough stock to finance the company for deep mine development, mill equipment and the payment to the original

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THE "DOUBLE-CROSSING" OF RAWHIDE COALITION

THE "DOUBLE-CROSSING" OF RAWHIDE COALITION

At the close of the day's business on December 7th, our brokers, a single firm, members of the New York Stock Exchange, reported the purchase of 17,100 shares in the open market at an average price of about $1.39, and the sale of 1,800 shares at a little above this average. For the first time in the campaign there appeared to be selling pressure. We had quit "long" 15,300 shares. The sum of $21,000 in cash was required to pay for the "long" stock. On December 8th, the day following, the same fir

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"INSIDE" MARKET SUPPORT

"INSIDE" MARKET SUPPORT

The removal to New York of B. H. Scheftels &amp; Company, Chicago stock brokers, representatives there of Nat C. Goodwin &amp; Company of Reno, and a merging of brokerage and promotion interests of the two firms took place. There was precedent for the move. There are a thousand other corporation interests in this country that are closely affiliated with Stock Exchange and other brokerage houses, through one or more of their directors or owners being partners in the business. As a matter

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MORE TRUTH ON THE "MINING FINANCIAL NEWS"

MORE TRUTH ON THE "MINING FINANCIAL NEWS"

WHEN the Mining Financial News removed to New York Mr. Scheftels used much persuasion to get the owners to transfer title to the Scheftels company. Admittedly, if the Scheftels company could boast ownership of the newspaper at the head of its editorial page, it would be a great feather in the Scheftels cap and might lead investors to think that an organization which could own and publish a first-class, metropolitan newspaper of the Mining Financial News variety must for that reason alone be wort

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THE SCHEFTELS PRINCIPLES

THE SCHEFTELS PRINCIPLES

When the corporation of B. H. Scheftels &amp; Company opened its doors in New York it had no affiliations with any other Wall Street interests. It had no axes to grind except its own. It was practically a free-lance. It cracked up its own wares, careful always to keep within the facts, and never minced words about the quality of the goods of its contemporaries. The principle of both the Scheftels corporation and the Mining Financial News was to be always right in their market forecasts. The

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THE SCHEFTELS COMPANY AGAINST MARGIN TRADING

THE SCHEFTELS COMPANY AGAINST MARGIN TRADING

The Scheftels company did not encourage margin trading by its customers. In fact, it railed against the practice. Time and again the Mining Financial News , editorially, denounced the business of margin trading. The Weekly Market Letter of the corporation sounded the same note. On several occasions, in large display advertisements published in the newspapers, the Scheftels company decried the practice and urged the public to discontinue trading of this character. There were selfish reasons for t

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THE FIRING OF THE FIRST GUNS

THE FIRING OF THE FIRST GUNS

Before the Scheftels corporation was on the Street three months it almost came a cropper. On the strength of excellent mine news it purchased nearly 300,000 shares of Rawhide Coalition in the open market, up to 71 cents per share. A determined drive was made against the stock by mining-stock brokerage firms which had sold it short. Bales of borrowed stock were thrown on the market by the crowd operating for the decline. The Scheftels company took it all in. Letters and telegrams were sent broadc

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THE STORY OF ELY CENTRAL

THE STORY OF ELY CENTRAL

By keeping speculators out of stocks that were selling at inflated prices, the Scheftels corporation and the Mining Financial News became endeared to a great popular moneyed element. The public was saved huge sums of money. This, however, only carried out the negative end of a grand idea. The affirmative demanded that the Scheftels corporation must put its followers into a stock or stocks where they could actually make money. The Scheftels corporation was on the eager lookout for a genuinely hig

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THE ASSAULT ON ELY CENTRAL

THE ASSAULT ON ELY CENTRAL

The 6th day of November fell on a Saturday. The New York Sun of that morning published under a scare head a vicious attack on the Ely Central promotion. The attack was based on an article which was credited in advance to the Engineering &amp; Mining Journal and appeared in the Sun ahead of its publication in that weekly. The Sun had been furnished with advance proofs. The Ely Central project was stamped as a rank swindle. Everybody identified with it was raked over and I, particularly, was p

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THE CLASH OF BATTLE

THE CLASH OF BATTLE

With a line of defense carefully outlined, I approached the fray. First, the Scheftels corporation placed with reliable brokers written orders to sell at the opening the stocks that were specified in the stop-loss and good-till-cancelled orders of customers. Not an order to sell a share of inside stock was given. It was also decided not to place any supporting orders until after the market opened and it could be determined with some degree of accuracy what the volume of stock amounted to that wa

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A BOMBSHELL IN THE ENEMY'S CAMP

A BOMBSHELL IN THE ENEMY'S CAMP

As soon as the Scheftels corporation was able to obtain a copy of the corroborative report of Dr. Walter Harvey Weed, which the great copper geologist made to the C. L. Constant Company, it filed a libel suit against the Engineering &amp; Mining Journal for $750,000 damages. Simultaneously Mr. Scheftels filed another suit for an additional $100,000 in his own behalf. The filing of the Scheftels libel suits against the Engineering &amp; Mining Journal was a bombshell. It was formal notice

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A GOVERNMENT RAID IS RUMORED

A GOVERNMENT RAID IS RUMORED

Out of a blue sky late in the month of June came news to the Scheftels office that a newspaper reporter on the New York American had stated that he had seen a memorandum in the city editor's assignment-book to watch out for a Scheftels raid by the United States Government. The information was reliable and it gave us a shock. Yet the thought that the powers of a great government like the United States could be used to crush us without giving us a hearing seemed unbelievable. To be on the safe sid

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THE RAID ON B. H. SCHEFTELS & CO.

THE RAID ON B. H. SCHEFTELS & CO.

The destruction of the Scheftels structure was consummated on the 29th day of September, 1910. I was standing on the front stoop of the Scheftels offices, watching the markets for the Scheftels specialties. A broker with San Francisco connections made me a bid of 68 cents for 10,000 shares of Jumbo Extension. I promptly refused. At that very moment my attention was called to the violent slamming of a door behind me. Turning to a Scheftels employee who was standing by my side, I learned that a nu

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A TOOL'S CONFESSION

A TOOL'S CONFESSION

The signed confession of the Tool of the Special Agent, who appeared before Assistant Attorneys Dorr and Smith at the United States Attorney's office in New York, which says he gave false testimony, and the voluntary statement of John J. Roach, a stock broker who was employed by the now defunct firm of Frederick Simmonds, regarding the relations between the Special Agent and that firm, while Special Agent of the Government, reveal the weak foundations of the Government's charges. The Tool, prior

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THE GUGGENHEIMS

THE GUGGENHEIMS

Probably the most surprised branch of the Government at the time of the Scheftels raid was the Post-Office Department. The crime charged was misuse of the mails. Why, if the Scheftels aggregation were guilty, didn't the Post-Office Department do the raiding? Why didn't it issue a fraud order? The Scheftels company has since been declared solvent by the courts and the temporary receiver discharged. To this day no fraud order has been issued. Only a short period before the raid, a presentation on

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CHAPTER XII The Lesson of It All

CHAPTER XII The Lesson of It All

What is the lesson of my experience—the big broad lesson for the American citizen? This is it: Don't speculate in Wall Street. You haven't got a chance. The cards are stacked by the "big fellows" and you can win only when they allow you to. The information that is permitted to reach you as to market probabilities through the financial columns of the daily newspapers is, as a rule, poisoned at its fountain. It has for its major purpose your financial undoing. Few financial writers dare to tell th

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