My Adventures with Your Money

People began to flock into the camp in droves. The town was a scene of bustle and life. Motley groups assembled at every corner and discussed the great production being made from the Mohawk and the terrific market advances being chronicled by mining stocks representing all sorts and descriptions of Goldfield properties. Whenever Hayes and Monnette, owners of the Mohawk lease, appeared on the streets, they were followed by a mixed throng of the riffraff of the camp, who hailed them, open-mouthed, as wonders.

The madness of speculation in mining shares in the camp itself was beginning to exceed in its intensity the exciting play at the gaming tables. There was a contagion of excitement even in the open spaces of the street.

At each meeting of the Goldfield Stock Exchange the boardroom was crowded. The sessions were tempestuous. Every step and every hallway leading to the room was jammed with men and women over whose faces all lights and shades of expression flitted. The bidding for mining issues was frantic. Profits mounted high. Everybody seemed to be buying and no one appeared to be willing to sell except at a substantial rise over the last quotations. Castle-building and fumes of fancy usurped reason.

Bank deposits were increasing by leaps and bounds. The camp was rapidly becoming drunk with the joy of fortune-making.

Manhattan now shone mostly in the reflected glory of Goldfield, but Manhattan stocks were booming. This enabled the Sullivan Trust Company to dispose of nearly all of its Manhattan securities which had been carried over after the San Francisco catastrophe and to pile up a great reserve of cash.

A big demand was developing for shares in Fairview companies. Nevada Hills of Fairview was selling on the stock exchanges and curbs at $3 per share, or a valuation of $3,000,000 for the mine. Only a few months before it had fallen into Goldfield and Salt Lake hands for $5,000. Fairview Eagle's Nest, for which subscriptions had been accepted at 35 cents per share by the Sullivan Trust Company, was selling at 70 cents on the San Francisco Stock Exchange.

The Sullivan Trust Company announced the offering of 1,000,000 shares, embracing the entire capitalization of the Fairview Hailstone Mining Company, at 25 cents. The stock was purchased by us at 8 cents. We sold out in a week. San Francisco and Salt Lake were the principal buyers, and it was unnecessary even to insert an advertisement offering the stock. The brokers fell over one another to underwrite the offering by telegraph.

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 put up his forfeit and make the match, and the Sullivan Trust Company had also advanced the money for that purpose. Mr. Sullivan became Gans' manager. When Gans arrived in town Mr. Sullivan interviewed him to this effect:

"Gans, if you lose this fight they'll kill you here in Goldfield; they'll think you laid down. I and my friends are going to bet a ton of money on you, and you must win."

Gans promised he would do his best.

"Tex" Rickard and his friends wagered on Nelson. The cashier of the Sullivan Trust Company was instructed to cover all the money that any one wanted to bet at odds of 10 to 8 and 10 to 7 on Gans, we taking the long end. A sign was hung in the window reading: "A large sum of money has been placed with us to wager on Gans. Nelson money promptly covered inside." Mr. Sullivan was in his glory. Prize-fighting suited his tastes better than high finance, and he was as busy as a one-armed paper-hanger with the itch.

An argument arose about who should referee the fight. "Tex" Rickard nominated George Siler, of Chicago, and Battling Nelson promptly O.K.'d the selection. Mr. Sullivan openly objected. He thought it good strategy. He sent for the newspaper men and gave out an interview in which he declared that Mr. Siler was prejudiced against Gans because he was a negro, and he did not believe Mr. Siler would give Gans a square deal.

"Rice," whispered Sullivan after the newspaper men left the office, "I am four-flushing about that race-prejudice yarn, but it won't do any harm. Siler needs the job. He's broke and I'll make him eat out of my hand before I'll agree to let him referee the fight. They've already invited Siler to come here, and I won't be able to get another referee, but I'll beat them at their own game. When Siler gets here I'll thrash matters out with him and agree to his selection, but first I want him to know who's boss."

Mr. Siler arrived. An hour later he was closeted with Mr. Sullivan in one of the back rooms of the trust company offices. The dialogue which ensued was substantially as follows:

Mr. Siler. You've got me dead wrong, Sullivan. I want to referee this fight, and I want you to withdraw your objections.

Mr. Sullivan. Well, I've heard from sources which I can't tell you anything about that you don't like Gans, and I can't stand for you.

Mr. Siler. I need this fight, and I've come all the way from Chicago in the expectation of refereeing it. I couldn't give Gans the worst of it if I wanted to. He is a clean fighter and I would not have an excuse.

Mr. Sullivan. Gans is a clean fighter, but Nelson isn't; he uses dirty tactics and he is a fouler for fair.

Mr. Siler. If he does any fouling in this fight I'll make him quit or declare him out.

Mr. Sullivan. What guarantee have I got that you won't give Gans the worst of it?

Mr. Siler. Well, I'll tell you, Sullivan, if you withdraw your objections I'll guarantee you that I'll be this fair. If Nelson uses foul tactics, or if he don't, I'll show my fairness to Gans by giving him the benefit of every doubt. Now, will that satisfy you?

Mr. Sullivan. Yes, it'll satisfy me, but, remember, if you don't keep your word you'll have just as much chance of getting out of this town alive as Gans will have if he lays down! You understand?

Mr. Siler. Yes.

On the afternoon of the fight the Sullivan Trust Company cast accounts and found that it had wagered $45,000 on Gans against a total of $32,500 put up by the followers of Nelson.

Mr. Sullivan, after talking it over with me, had accepted the honorary position of announcer at the ringside. Though not of aristocratic mien, "Larry" was of fine physique, with a bold, bluff countenance, and I felt confident that his cordial manner would appeal to that Far Western assemblage.

Just before the prize-fighters entered the ring, "Larry" jumped into the arena. Standing above the mass of moving heads and holding up both hands, he hailed the great crowd thus:

"Gentlemen, we are assembled in this grand areno to witness a square fight. This fight is held under the auspices of 'Tex' Rickard, a man of great accumulations——"

"Larry" did not get much farther. The audience laughed, and then jeered and hooted until it became hoarse. His words were drowned in the tempest of derision. I was informed by friends who were close to the ringside that he went on in the same rambling way for a few minutes more, but I can't testify to that fact from my own knowledge because "acclumuations" and "areno" overcame me and I stopped up my ears.

The fight progressed for twenty rounds or more, when I began to doubt the ability of Gans to win. Mr. Sullivan had a commissioner at the ringside, who, up to this time, had been betting anybody and everybody all the 10 to 6 that was wanted against Nelson. I hailed Mr. Sullivan at the ringside.

"This doesn't look like the cinch for Gans you said it would be," I whispered.

"Wait a minute," Mr. Sullivan replied, "I'll go to Gans' corner as soon as this round is over and find out what's doing with him."

Mr. Sullivan went over to Gans' corner and came back.

"Gans says he can't win this fight, but he won't lose. He's a good ring-general and he'll pull us out. Don't bet any more money. I'm going to stay close to the ringside. Watch close."

It was apparent during the next ten rounds that Gans was availing himself of every opportunity to impress upon the audience that Nelson was inclined to use dirty fighting tactics, and soon Nelson was being hooted for foul fighting. Gans, on the other hand, appeared to be fighting fair and like a gentleman. Soon it was evident that Gans had won the sympathy and favor of the audience.

The fight had continued through the fortieth round, when Mr. Sullivan again repaired to Gans' corner and held another animated whispered conversation with him.

In the forty-second round Gans of a sudden went down, rolled over and, holding his hand under his belt, let out a yell of anguish that indicated to the excited multitude that Nelson had fouled him frightfully.

In another instant Mr. Sullivan had clambered into the ring. Confusion reigned. The audience was on its feet. Pushing his fist into the referee's face, Mr. Sullivan cried: "Now, Siler, you saw that foul, didn't you? It's a foul, isn't it? Gans wins, doesn't he?"

All of this happened quick as a flash. Mr. Siler, pale as a ghost, whispered something inaudibly.

Mr. Sullivan, turning to the assemblage and raising both arms to the skies, yelled:

"Gentlemen, the referee declares Gans the winner on a foul!"

The audience acclaimed his decision with salvos of applause. There did not appear to be a man in the crowd who doubted a foul had been committed, although Nelson at once protested his innocence.

Next day Mr. Sullivan told me that in or near the twenty-fourth round Gans had broken his wrist and knew he could not win the fight by a knockout. He also said that Gans went down in the forty-second round in order to save the day.

"I won that fight," said Mr. Sullivan. "I told Gans while he was in his corner after the fortieth round that if he lost he would be laying down on his friends, that he had the audience with him, and that it was time to take advantage of Nelson's foul tactics."

This was my first experience in prize-fighting, and my last. My sympathies were, however, with the winner. Gans' tactics throughout up to the last round were gentlemanly and those of Nelson unfair. Even the partisans of Nelson who had wagered on him agreed after the fight that the battle put up by the negro up to the forty-second round was a white man's fight and he was entitled to win.

Nelson had been guilty of foul tactics in almost every round, but the probabilities are that Gans was not disabled by a foul blow in the forty-second round and that he took advantage of the sentiment in his favor, which had been created by his manly battle up to that time, to go down at a psychological moment.

I saw Mr. Siler after the contest, and he appeared pleased that his decision was so well received, but he assured me that if he was invited to referee another bout in any mining camp he would decline the job.

The Sullivan Trust Company, of course, won a big bet on the result, but it lost a bigger one as an outcome of the battle on the very next day. The impression created by Announcer Sullivan's attempt to reach lofty flights of eloquence in his speech to the fight-audience was bad for the trust company, and it required the use of over $100,000 on the day following to meet the flood of selling orders in Sullivan stocks which poured into the San Francisco Stock Exchange.

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 on the San Francisco Stock Exchange with sales at $1.15. I went out on the street and proceeded to buy all the Combination Fraction in sight. In half an hour I had corralled about 60,000 shares at an average of $1.30. An hour later the owners of the lease obtained the information on which I was working, and by eight o'clock that night, when the Goldfield Stock Exchange began its evening session, the price had jumped to $1.85. Within a week thereafter the price sky-rocketed to $3.75, and at this figure I took profits of nearly $150,000. Had I held on a little longer I could have doubled that profit, for Combination Fraction a few weeks later sold at higher than $6.

The Combination Fraction strike was followed by a number of others, and the boom gathered force. By October, Goldfield Silver Pick had advanced to $1 per share, up 600 per cent. Goldfield Red Top was selling at $2, Jumbo at $2, and Mohawk at $5, showing profits of from 2,000 to 5,000 per cent. Others had gained proportionately. In fact, there were over twenty Goldfield securities listed on the exchange that showed the public a stock-market profit of anywhere from 100 per cent. to 5,000 per cent.

Mining machinery of every description was being shipped into camp, and for half a mile around the Combination mine the landscape of assembled gallows-frames resembled a great producing oil field. There were signs of mining activity everywhere. For four miles east of the Combination mine and six miles south every inch of ground had been located. Claims situated miles away from the productive area were changing hands hourly at high figures.

The Sullivan stocks kept pace in the markets with the other booming securities, and it was plain that the trust company was riding on a tidal wave of success. Our profits exceeded $1,500,000 at this period, and we were just eight months old.

In a single fortnight the Sullivan Trust Company promoted the Lou Dillon Goldfield Mining Company at 25 cents per share, a valuation of $250,000 for the property, which cost $50,000; and the Silver Pick Extension, which cost $25,000, at the same figure, netting several hundred thousand dollars' profit on these two transactions. Options to purchase the Lou Dillon and Silver Pick Extension, which were situated within 500 feet of the Combination mine, had been in possession of the Sullivan Trust Company for months, and had increased in value to such an extent that on the day the subscriptions were opened in Goldfield for Lou Dillon at 25 cents per share, a prospector named Phoenix, who had received $50,000 from the Sullivan Trust Company for the entire property, subscribed for 100,000 shares, or a tenth interest in the enterprise, paying $25,000 therefor.

It was the rule of the Sullivan Trust Company to open subscriptions in Goldfield on the day its advertising copy left the camp by mail for the East. Newspaper publishers were always instructed to publish the advertisements, which were generally of the full-page variety, on the day following receipt. In the case of Lou Dillon it became necessary to telegraph all newspapers east of Chicago not to publish the advertisement because of oversubscription before the copy reached them, and in the case of Silver Pick Extension the orders to publish the advertisements were canceled by telegraph before the mail carrying the copy reached Kansas City. San Francisco, Los Angeles and Salt Lake subscribed for 50 per cent. of the entire offering of Lou Dillon and Silver Pick Extension, and Goldfield for 25 per cent. As a matter of fact, had we desired, we could have sold the entire offerings in Goldfield, Tonopah and Reno without inserting any advertisements, so great was the excitement in the State itself.

At this period the combined monthly payrolls of the mining companies promoted by the Sullivan Trust Company totaled in excess of $50,000, and excellent progress was being made in opening up the properties.

It was early Autumn in Goldfield, warm, dry and dusty, and never a cloud in the sky. I was at my desk eighteen hours a day, and liked my job. Things were coming our way.

The Sullivan Trust Company was in politics. Mr. Sullivan was popular with the miners, and Governor Sparks was a large asset of the trust company because he had been allowing the use of his name as president of all the mining companies promoted by it. Nevertheless, when the State election approached, the Governor had no money for campaign expenses. He telegraphed the trust company from Carson:

"I will not stand for renomination."

We replied: "You are certain to be elected, and you will be renominated by acclamation if you accept."

"I won't run unless you guarantee my election," he telegraphed.

We answered: "We guarantee."

The Governor was renominated by the Democrats. The Republicans placed in nomination J. F. Mitchell, a mining engineer and mine owner, who was very popular among mine operators.

There were thousands of miners domiciled in Goldfield. The Western Federation of Miners dominated.

"Sullivan," I said, "isn't it a certainty that the miners will vote the Democratic ticket because Mitchell has been put forward by the mine owners? Is it necessary to spend any money with the Western Federation?"

"Not a dollar!" replied Mr. Sullivan. "There's a meeting of the executive committee to-morrow. I'm going to be around when they meet. Without spending a cent I'll bring home the bacon. Watch me!"

Sullivan reported to me the next day that he had succeeded in his mission.

"I didn't attend the meeting," he said, "but I did see the main 'squeeze.' He told me that a contribution to the Miner's Hospital would be gratefully accepted, but that even that was not necessary, and that Sparks would win in a walk."

The only campaign money advanced by the Sullivan Trust Company was given to Mr. Sullivan to go to Reno. He asked for $1,000, and he used it in conducting open house on the first floor of the Golden Hotel, meeting people and greeting them. Reno appeared to be a Republican stronghold, and Mr. Sullivan, by baiting the Catholics against the Protestants, succeeded in holding down the Republican majority to an extent that was wofully insufficient to overcome the Democratic majority rolled up in Goldfield with the aid of the miners. Governor Sparks was reëlected by a handsome majority. Had the occasion demanded it, we would have "tapped a barrel." But it was not necessary.

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 companies and to part ownership of the leading Goldfield bank, John S. Cook & Company, which was then credited with having $7,000,000 on deposit, was said to be engineering the deal. The names of the properties were not given, nor the figures. It occurred to me that in any merger that was made the Jumbo and Red Top, because of their central location, must be included. I sought out Charles D. Taylor, who with his brother, H. L. Taylor, and Capt. J. B. Menardi, owned the control of these properties. He asked $2.50 per share for his stock and that of his partners—all or none. Mr. Taylor had walked into the camp as a prospector. Most of his nights were spent at the gaming tables, and he was reported to be an easy mark for the professionals. His losses were constant and heavy. I put Mr. Sullivan on his trail. Mr. Sullivan reported to me that Mr. Wingfield was hobnobbing with Mr. Taylor.

"Get an option on these properties from Taylor and be quick," I told Mr. Sullivan.

Next morning I met Mr. Sullivan. He held in his hands 20,000 shares of Jumbo, selling at $1.75 per share on the Goldfield Stock Exchange.

"I won it in a poker game last night with Taylor and Wingfield," he said. "I have an oral option on the property good for three days at $2.50, but if you leave it to me, I'll win these properties from him playing cards."

I did not see Mr. Sullivan again for a week. Next I heard of him he had "fallen off the water-wagon" and was reported to be celebrating the event in Tonopah. While Mr. Sullivan was "kidding" himself about his poker-playing ability, Mr. Wingfield had come to terms with Mr. Taylor and had bought the control of Jumbo and Red Top at an average price of $2.10 per share. That explained Mr. Sullivan's lapse. However, I blamed myself. Mr. Sullivan was no match for Mr. Wingfield. In any game from stud-poker to marketing mining stock Mr. Wingfield can outwit, outmaneuver and outgeneral a hundred like "Larry."

Both companies had been capitalized for 1,000,000 shares. The sale required that a fortune be paid over. Mr. Wingfield paid a small sum down, and Mr. Taylor placed the stock of both of these companies in escrow in the John S. Cook & Company bank, the balance to be paid a month later.

The purchase of control of the Jumbo and Red Top by the firm of Wingfield and Nixon signalized the beginning of a stock-market campaign for higher prices that stands unprecedented for audacity and intensity in the history of mining-stock speculation in this country since the great boom of the Comstock lode in 1871-1872.

The market for all listed Goldfield stocks was made to boil and sizzle day in and day out until Jumbo and Red Top had been ballooned from $2 to $5 per share, Laguna from 40 cents to $2, Goldfield Mining from 50 cents to $2, and Mohawk from $5 to $20. Within three weeks the advance in market price of the issued capitalization of this quintet alone represented the difference between $8,000,000 and $26,500,000.

A few days before top prices were reached, it was officially announced that the merger of Mohawk, Red Top, Jumbo, Goldfield Mining and Laguna into the Goldfield Consolidated Mines Company had been made on the basis of $20 for each outstanding share of Mohawk, $5 for Red Top, $5 for Jumbo, $2 for Goldfield Mining, and $2 for Laguna. It was also given out that the promoters, Wingfield and Nixon, had allotted themselves $2,500,000 in stock of the merged companies as a promoters' fee. Right on top of this came an announcement that the Combination mine had been turned into the merger for $4,000,000 in cash and stock, and it was learned that go-betweens had made a profit of $1,000,000 on the deal by securing an option on the property for $3,000,000.

In short, a merger was put through of properties and stocks, the issued capitalization of which was selling in already inflated markets on the day the merger was conceived for $11,000,000, at a valuation of $33,000,000, and in addition the promoters received a $2,500,000 bonus. Had the properties been merged on the basis of their selling prices three weeks prior, the equivalent value of the 3,500,000 shares of merger stock would have been a fraction above $3. As it stood, under the ballooning process, the market value was $10, which was the par.

At the time of the merger these were the conditions that ruled at the mines:

The Mohawk, appraised at $20,000,000, had produced under lease in the neighborhood of $8,000,000, of which less than $2,000,000 had found its way into the treasury of the Mohawk Mining Company, the balance going to the leasers. The leasers had "high-graded" the property to a fare-you-well, and less than $1,000,000 worth of high-grade remained in sight, although it was conceded on every side that the leasers had not attempted, nor were they able during the period of their leasehold, to block out systematically and put into sight all of the ore in the mine. Large, but indefinite, prospective value therefore attached to Mohawk in addition to the tonnage in sight.

The Laguna, for which $2,000,000 had been paid in stock, did not have a pound of ore in sight, and had cost Wingfield and Nixon less than $100,000.

Goldfield Mining, scene of a sensational production during the early days of the camp, appraised at $2,000,000 more, had fizzled out as a producer.

Jumbo, taken in for $5,000,000, for a year previous had produced little or no ore, most of the time being exhausted by the management in sinking a deep shaft, and it had less than $500,000 in sight.

Red Top, valued at another $5,000,000, had in excess of $2,000,000 worth of medium grade ore blocked out.

Wingfield and Nixon were also heavily interested in Columbia Mountain, Sandstorm, Blue Bull, Crackerjack, Red Hills, Oro, Booth, Milltown, Kendall, May Queen, and other Goldfield stocks. No sooner did the five stocks forming the merger begin to show such startling market advances than the ballooning tendency manifested itself in Wingfield and Nixon's miscellaneous list, and all of them showed phenomenal gains. Soon the entire list of Goldfield, Tonopah, Manhattan, Bullfrog, and other Nevada mining securities listed on the San Francisco Stock Exchange and traded in on the exchanges and curbs of the country, felt the force of the terrific rises, and sympathetically they skyrocketed to unheard-of levels.

To convey an idea as to how far the prices of these stocks were moved up beyond their intrinsic worth, as a result of the ballooning process of the merger, I give some comparisons.

Columbia Mountain sold during the boom at above $1.50; it is now selling at 5 cents. Blue Bull, Crackerjack, Oro, Booth, Red Hills, Milltown, Kendall, Conqueror, Hibernia, Ethel, Kewanas, Sandstorm and May Queen sold at an average of 75 cents during the boom; they are now selling at an average of less than 5 cents. A hundred other Goldfield securities, which were in eager demand at the zenith of the spectacular movement at prices ranging from 50 cents to $2.50 can now be purchased at from 1 to 5 cents per share, while many others that were hopefully bought by an over-wrought public at all sorts of figures are now not quoted at all.

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 miles from the proved zone in Goldfield, or in unproved camps near Goldfield, were foisted on the public for $150,000,000 more.

The fact that Mohawk, which in the early days of Goldfield could have been purchased at 10 cents, had advanced to $20 and had shown purchasers a profit of 20,000 per cent.; that Laguna had advanced in less than two years from 15 cents to $2; that Jumbo and Red Top, selling at $5, could have been purchased a year or two before at around 10 cents; that Goldfield Mining, which had in the early days been peddled around the camp at 15 cents, had moved up to $2, etc., gave the wild-catters an argument that was convincing to gulls in every town and hamlet in the Union. And the harvest was immense. Not one of the 2,000 wild-cats has made good, and every dollar so invested has been lost.

It will be noted from the reckoning as given that about as much money was lost in the listed stocks of the camps as in the unlisted "cats and dogs."

As a matter of fact, veteran mining-stock buyers, in camp and out of the camp, lost as much hard cash as did the unsophisticated. San Francisco, which owes its opulence of years gone by to successful mining endeavor, was probably hit as hard as any other city in the Union. San Francisco thought it knew the game, and it confined its operations to the stocks listed on the exchange where the Comstocks are traded in. But San Francisco did not know the inside of the merger deal as it is now known to every schoolboy in Nevada.

The operation on the inside was this. Wingfield and Nixon owned the John S. Cook & Company bank in Goldfield, and they owned the control of nearly a score of mining companies which were of little account as well as having acquired the control of the biggest mine in camp. During the height of the boom, which they engineered to swing the merger, they disposed of millions of shares of an indiscriminate lot of companies, and used the many millions of proceeds to take over Jumbo, Red Top and their outstanding contracts in Mohawk and other integrals of the merger. They likewise were able during the ballooning process to dispose of much Mohawk at from $15 to $20, much Jumbo at from $4 to $5, much Red Top at from $4 to $5, that cost them very considerably less than this, and in this way were enabled to finance their deal to a finish.

I have just pointed out that in order to accomplish the merger it was necessary that the market in all Goldfield securities, in which the promoters were interested, be stimulated in order to enable unloading by the insiders before some of the very large payments became due. This being accomplished, and the payments having been made, the promoters sought to establish a market for merger shares at or around par. In order to accomplish this the Goldfield bank, in which the promoters were heavily interested, stimulated speculation and managed to spread a feeling of security by announcing its willingness to loan from 60 to 80 per cent. par on merger shares.

All Goldfield fell for this, and the camp went broke as a result.

Within eighteen months thereafter Goldfield Consolidated sold down to $3.50 in the markets, and margin-traders and borrowers who had put up the stock as collateral to purchase more were butchered. Loans were foreclosed by the bank as rapidly as margins were exhausted. The carnage was awful.

It must be evident that Wingfield and Nixon, both of whom became multimillionaires as the result of their mining-stock operations in Goldfield, were directly and indirectly important factors in the loss by the public of $300,000,000, as set forth above. It is admitted that less than $7,000,000 worth of ore had been developed as a reserve at the time $35,000,000 worth of stock in the merger was issued and a market manufactured to dispose of the stock at this fictitious price-level. It is not of particular interest that Goldfield Consolidated, by reason of sensationally rich mine developments at depth, has since given promise of returning to stockholders an amount almost equal to par for their shares, and that it now appears that those who were able to weather the intervening declines may in the end be out only the interest on their money.

Mr. Nixon was a United States Senator from Nevada. He was also president of the Nixon National Bank of Reno, Nevada. He held both of these positions at the time the merger was made, and it was largely because of Mr. Nixon's political and financial position that the daring ballooning market operations, which were staged as a curtain-raiser for the merger, proved so successful.

In the Nevada Mining News of May 25, 1907, circulation 28,000, an interview appeared with United States Senator Nixon of Nevada, vouched for as follows:

I quote from the Senator's interview, as it appeared in that issue of the Nevada Mining News:

As to that interview:

Mr. Nixon said that within three or four years (the time limit is up), $20 would be a minimum price for the shares. They touched $10 only once since then, or one-half of his estimate. Shortly after the interview was given they sold down as low as $3.50. Recently the market quotation was $4.

He said, further, that the mines would ultimately earn at the rate of $1,000,000 a month. This statement also has fallen far short of fulfillment.

Soon after George S. Nixon, as president of the Goldfield Consolidated Company, gave out this interview for public consumption he, according to his own later admissions, disposed of all of his holdings, and at an average price, it is believed, of less than $8 a share.

This is only a superficial rendering of the big event in Goldfield's history, but it is sufficient to furnish an example of the effect of Get-Rich-Quick influences that radiate from high places and separate the public from millions upon millions, without being called to account.

The dear American public has been falling for this kind of insidious brand of Get-Rich-Quick dope for years. It is being gulled into losing millions through its fetish worship of promoters with millions, who are really the Get-Rich-Quicks of the day that are very dangerous.

Greenwater, a rich man's camp, in which the public sank $30,000,000 during three months that marked the zenith of the Goldfield boom, is another case in point where a confiding investing public followed a deceiving light and was led to ruthless slaughter.

  CHAPTER IV

The Greenwater Fiasco

When the excitement was at fever-heat in Goldfield over the stupendous rises in market value of Goldfield securities which were being chronicled hourly, news came to town of the successful flotation in New York of the Greenwater & Death Valley Mining Company. The capitalization was 3,000,000 shares of the par value of $1 each. The stock had been underwritten at $1 a share by New York and Pittsburg Stock Exchange houses, had been listed on the New York Curb, and had climbed to around $5.50, or a valuation for the property of $16,500,000. Among the officers of this company were M. R. Ward, brother-in-law of Charles M. Schwab; T. L. Oddie, now Governor of Nevada, and Malcolm Macdonald, later president of the Nevada First National Bank of Tonopah.

Greenwater is situated about 150 miles south of Goldfield, across the State line in California. No one ever went to or fro without passing through Goldfield. If there was a Greenwater boom, how was it that we in Goldfield, who were in touch with all Nevada mining affairs, did not know about it? Goldfield promoters soon began to give attention. Shortly they caught the infection. A stampede from Goldfield into Greenwater ensued. In fact, people flocked to Greenwater from every direction. A bunch of Tonopah money-getters, headed by the indomitable Malcolm Macdonald, were grabbing the money on Greenwaters in New York, and Goldfield was not in the play.

The reports that came from Greenwater as a result of the first stampede from Goldfield were of doubtful variety. Greenwater & Death Valley was described as a raw prospect not worth over 10 cents per share. Goldfield people shook their heads. There was no gainsaying the fact, however, that Greenwater & Death Valley appeared to be a giant success in the Eastern stock markets. Charles M. Schwab was reported to be behind the flotation of Greenwater & Death Valley. Montgomery-Shoshone and Tonopah Extension, two other Schwab enterprises, were selling at hundreds of per cent. profit in the stock markets. The fact that Mr. Schwab was interested in the camp was an argument that appealed with great force to Nevada promoters, for the fraternity had learned to attach just as much significance to having a market as to having a mine before commencing promotion operations.

The Sullivan Trust Company not having had a failure of any kind on the market, I hesitated to commit the trust company to any issue in the new camp. Not to be entirely out of it, however, I sent our engineer, "Jack" Campbell, into the district to report on all the properties.

News came thick and fast from the New York market as to the success of the Greenwaters in the East. Furnace Creek Copper Company, originally promoted by "Patsy" Clark of Spokane at 25 cents per share, with a million-share capitalization, was reported to be getting the benefit of Mr. Clark's personal market handling on the New York Curb, and the shares soon reached a high quotation of $5.50. John W. Gates had been let in by "Patsy" at around 50 cents and was reported to have unloaded 400,000 shares at all sorts of prices from $1 up to $5.50, and down again.

On the heels of this advance came word of the successful promotion of the United Greenwater Company, with C. S. Minzesheimer & Company, members of the New York Stock Exchange, acting as fiscal agents for the company. The promoters were named as Malcolm Macdonald, Donald B. Gillies and Charles M. Schwab. J. C. Weir, the New York mining-stock broker, who was conducting through the mails a nation-wide market-letter campaign in favor of Greenwater, was reported to have sold 150,000 or 200,000 shares at the subscription price of $1. The offering was said to have been oversubscribed twice. The price then shot up to $2.50 on the New York Curb. The market boiled.

Philadelphia was reported to be Greenwater-mad. When United Greenwater had reached $1.50 on its way up and Greenwater & Death Valley had passed the $4 point, the Schwab crowd announced the formation of the Greenwater Copper Mines & Smelters Company to consolidate the Greenwater & Death Valley and United Greenwater companies. This new parent company was capitalized for $25,000,000, with 5,000,000 shares of the par value of $5 each, and the East was reported to be eating up the new stock "blood raw." The president of this company was Charles R. Miller, who was president of the Tonopah & Goldfield Railroad Company, and the vice-president was M. R. Ward, the redoubtable brother-in-law of Charles M. Schwab. The directorate included Mr. Schwab; John W. Brock, who represented Philadelphia interests on the directorate of the very successful Tonopah Mining Company; Malcolm Macdonald, the champion "lemon" peddler of Nevada; Frank Keith, general manager of the Tonopah Mining Company, and others. It was a "swell" directorate.

It was learned that the stock of the new company had been underwritten by New York Stock Exchange houses, principally those with Philadelphia and Pittsburg branches where the Schwab crowd was influential, at $1.80 per share, and that large blocks were being sold to the public at up to $3.25 on the New York Curb, a valuation for the "properties" of more than $16,000,000.

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 Company, with a capitalization of $5,000,000.

From Butte, home of the copper-mining industry, the Furnace Creek Extension Copper Mining Company was promoted, with a capitalization of $5,000,000, and also the Butte & Greenwater, capitalized for $1,500,000. Malcolm Macdonald the "hero" of Montgomery-Shoshone at Bullfrog, hailed from Butte. He it was who interested the Schwab crowd in Greenwater, as he did in Tonopah and Bullfrog.

"Patsy" Clark, the noted mine operator of Spokane, having prospered marketwise with his Furnace Creek Copper Company, promptly headed a new one, the Furnace Valley Copper Company, with a capitalization of $6,250,000. These shares were listed on the Spokane, Butte and Los Angeles Stock Exchanges, but did not appear on the New York Curb.

A San Francisco crowd of brokers and stock-market operators organized the Greenwater Bimetallic Copper Company. "They let her go Gallagher" with a capitalization of $1,000,000.

The C. M. Sumner Investment Securities Company of Denver opened subscriptions for the Greenwater-Death Valley Copper Company. (The title of this company was a play on the name of the Greenwater & Death Valley Copper Company.)

Tonopah citizens, not to be outdone, sallied forth with the Greenwater Calumet incorporated for $1,500,000. Hon. T. L. Oddie, later Governor of Nevada, then of Tonopah, and his brother, C. M. Oddie, followed the lead and headed the Greenwater Arcturus Copper Mining Company, with a capitalization of $3,000,000.

The Consolidated Greenwater Copper Company was fed to the hungry public out of a Pittsburg trough, with general offices in the Keystone Bank Building, and with a high-class Tonopah crowd on the directorate. Eugene Howell, cashier of the Tonopah Banking Corporation, of which United States Senator Nixon was president, was treasurer. John A. Kirby, of Salt Lake City, until recently associated with George Wingfield in the ownership of Nevada Hills, was president.

Arthur Kunze, who had sold the control of the Greenwater & Death Valley Copper Company to Malcolm Macdonald, who in turn had interested the Schwab coterie in the organization, put out a new one called the Greenwater Copper Mining Company, with a capitalization of $5,000,000.

H. T. Bragdon, formerly president of the Goldfield Mining Company, which is one of the integrals of the Goldfield Consolidated, headed the Greenwater Black Jack Copper Mining Company, with a capitalization of $1,000,000.

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 of 1908, "and the company's own figures as to the size of its ore-bodies, the first 100 feet in depth on this wonderful property would carry upward of 20,000,000 tons of refined copper, worth, at 13 cents per pound, the comparatively trifling sum of five billion, two hundred million dollars."

Mr. Stevens goes on: "The fact that a Major is manager of this company, and a United States Senator is vice-president, will prove a great consolation to the shareholders. It is indeed lamentable to note that this magnificent mine, which carries, according to the company's own statements, more copper than all the developed copper mines of the world, is idle, and present office address a mystery."

Donald Mackenzie, of Goldfield, promoter of the successful Frances-Mohawk Mining & Leasing Company at Goldfield, which netted over $1,500,000 from Mohawk ores, and distributed all of 20 per cent. of this amount to stockholders in the shape of dividends, pushed out the Greenwater Red Boy Copper Company and the Greenwater Saratoga Copper Company, with a capitalization of $1,000,000 each. Thomas B. Rickey, president of the State Bank & Trust Company of Goldfield, Tonopah and Carson City, was president of both of these companies, and J. L. ("God-Bless-You") Lindsey, cashier of the State Bank & Trust Company, was treasurer.

Greenwater Consolidated, Greenwater Copper, Furnace Creek Oxide Copper, Greenwater Black Oxide Copper, Greenwater California Copper, Greenwater Polaris Copper, Greenwater Pay Copper, Pittsburg and Greenwater Copper, Greenwater Copper Range, Greenwater Ely Consolidated, Greenwater Sunset, New York & Greenwater, Greenwater Etna, Greenwater Superior, Greenwater Victor, Greenwater Ibex, Greenwater Vindicator, Greenwater Prospectors', Greenwater El Captain, Greenwater & Death Valley Extension, Greenwater Copper Queen, Greenwater Helmet, Tonopah Greenwater, Furnace Creek Gold & Copper, and Greenwater Willow Creek were the names of a score of others with capitalizations ranging all the way from $1,000,000 to $5,000,000 each.

Among these the Greenwater Willow Creek Copper Company boasted of the fanciest directorate. George A. Bartlett, Nevada's lone Congressman, was president, and Richard Sutro, then head of the world-known New York banking house of Sutro Bros. & Co., was advertised as first vice-president. Henry E. Epstine, the popular Tonopah broker, was second vice-president, and Alonzo Tripp, general manager of the Tonopah & Goldfield Railroad, was a director.

Did I fall for Greenwater? Yes, and at the eleventh hour.

On the half-hearted recommendation of the trust company's engineer, "Jack" Campbell, the L. M. Sullivan Trust Company paid $125,000 for a property in Greenwater that boasted of two ten-foot holes. On two sides it adjoined the property of the Furnace Creek Copper Company, the original location in the camp. Our engineer reported that if "Patsy" Clark's Furnace Creek Copper Company, shares of which were selling in the market at a valuation of $5,500,000 for the property, had any ore, we certainly could not miss it. No matter which way the veins trended, our ground must be as good as "Patsy's," because the identical vein formation passed through both properties.

The Sullivan Trust Company thereupon incorporated the Furnace Creek South Extension Copper Company to operate the property. The capitalization was 1,250,000 shares of the par value of $1, of which 500,000 shares were placed in the treasury of the company to be sold for purposes of mine development.

New York Stock Exchange houses having the call as purveyors of this particular line of goods, the Sullivan Trust Company tendered the selling agency of Furnace Creek South Extension treasury stock to E. A. Manice & Company, members of the New York Stock Exchange, whose officers are located in the same building in New York as J. P. Morgan & Company. We offered for public subscription 100,000 shares of treasury stock at par, $1, through E. A. Manice & Company, and this firm advertised the offering in New York newspapers over their own signature. The Sullivan Trust Company paid the bills.

THE COLLAPSE OF GREENWATER

THE offering turned out to be a "bloomer," the first the Sullivan Trust Company had met with. E. A. Manice & 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 dividends on a capitalization of $1,000,000, is responsible for the early bursting of the bubble. Mr. Turner had invested in the Greenwater camp on the reports of an engineer. He organized the Greenwater Central Copper Company. Then he decided that it was advisable for him to take a look at the property for himself. He visited Greenwater. Two hours after arriving in camp he sent a telegram to Philadelphia reading substantially as follows: