Show TWO KINDS OF MINING STOCK assessable ind bonah ses sable 1111 1 alf T ill aai 1 loriet l toila i tot 1 ilist fitt fo fici OIL III tile the alid lil vh kinn ns IN tit A riter to tho the chicago mining i world orld contributes a rely reit strong analysis illy leof of the relative merits of assessable stock toek iu in mining companies and draws the conclusion the oula ool reason ible one that an all assessable able stolk stock compau company has at great over a non assessable one the abe entire article is well borth and the reaper e per re reproduces produs it as is follows nine out of ten non assessable mining comp anies fail 1 aca ise mm MILI ing como ames arlies selling treasury stock for development purpose experience tr times tries when sales cease and they an t even gle gine it asa atsuchi at such time they must most either run into do debt bt or 01 hilt down their mine either lour course li I 1 SUIL suicidal idal ahe company that is not noticing cannot sell stock abany at any price it dips of dr rut rot 12 i in aery every mining promotion some come mau man or set of men get stock tor lor prati call nothing for one reason or another one or more of these men to sell his big stock mock after the company hits has established a market for its stock one of the cheap follos fellows otters offers his big holdings tor for sale it dt a ad iscoui t thus the companas comp anys rudi mai let is killed result the company can sell hut but little if any stock and it is soon in trouble inere are other reasons ali mining companies fall fail it is the practice of com companies paules selling treasury stok stock to advance the price from time to time ibi course la ib fraught with peril when the price is advance somebody and there is always that somebody bant to realize an apparent profit and so sells under the companas comp anys market these filings Lon conspire spire to block the plans of legitimate promoters tit in financing mining Lomp companies anies the best promoter in the world can at times be beaten by those these conditions he is helpless and is blamed and abused for failure allure ONLY SOURCE OF REVENUE it costs money to sell mining stock aud and in order to meet this expense aul and 1 to raise sufficient capital from the he treasury allotment to develop the property treasury stock must be sold for much more than it is actually worth there is no other burce of 0 revenue than the aleff stock when the treasury stock is all bold before tile the property begins to pi aduce something radical must be done as for in tance by bv increasing the capital stock soliciting from stockholders contributions which they are not generally disposed to make or the stockholders are asked to i ote the stock assessable which they invariably refuse to do the property iti in consequence hes lies idle the company liquidates and finally loses its mine because the assessment men work to hold the locations is not done usually the promoter of the nou non company takes halt half tho the stock part of which goes tor for the property ertrand ert yand and the other half is held as treasury stock As a rule the promoter in fairly honest holds 25 per cent of the capitalization which costs him nothing and he makes a good profit from the sale of the treasury stock in addition tile the buyers of area treasury ury stock bear the burden of development and equipment expense the promoter beers bears ilone of this expense in case of success in addition to ins big profits from selling the treasury stock the promoter makes Is fortune out of 0 his interest in the company having contributed nothing ta 0 the expense of making it the 8 property valuable this is inequitable PROMOTER REAPS BENEFIT purchasers of treasury trea eury stock take all the chances of developing a mine t the he promoter takes none it if the venture ventura vent nent is the promoter makes enormous profits and in case casa of failure he makes good profits and the buyers of the treasury stock lose their money non assessable companies are not obliged to make reports of their condition at any time As a rule the man mail who buys stuck in one of these companies never again hears from them until ho he Is ia either asked for his has proxy for or the annual meeting to be voted to perpetuate the existing management or to buy more stock such soch companies finally have to give up the ghost and mr stockholder naturally thinks he has been swindled ansome in some oases he has been in others he be has not no assessable company honestly and intelligently managed ever failed in the promotion and development ot of a meritorious property I 1 challenge a successful contradiction of this thia statement under Bi si millar bious the non assessable company will fail for the reasons already stated assessments INCREASE V klue ALUE assessable stock if nearly always so sold id f for or tt IN list hat it is worth it Is IR not necessary to s sell 0 1 1 it for more ai the teal money r realized z e d is spent on the erty the property prop eity becomes more valuable when it is necessary to assess the stock the intelligent stockholder is willing to pay his assessment because he knows that his stock is N orth north more by reason of the advance in the development of the property prop eity the intelligent expenditure of the proceeds from each assessment increases the value of the stock far beyond the tha amount of the assessment and the prudent stockholder knows it the word intelligent in this case means mining intelligence the time corner comei when the promoter of an assessable company bear his shire of the expense of development or sell his stock to some one who will he cannot lie back in ease and have a tree free ride all the time at the expense expanse of the other stockholders PREVENTS rS underselling neither the promoter nor any other holder of cheap stock can dab club the company to death by gome into its market a and underselling it T the b e 0 corn om pany having the power to raise money by assessing its stock can undersell the cheap man compel him to keep his stock and ultimately pay his just share of the assessments or let it go rhe time will come when be must do one or the other this fact should appeal in the strongest terms to the buyer of treasury stock ile he gets a square deal every well informed I 1 mining man knows of numerous comp companies allies that have tailed failed because low offerings of their own stock block interfered with their markets and prevented them from selling their treasury a took stock no one can cite the case of an assessable company tailing failing tor for this reason the non assessable resort to pooling to prevent cheap offerings fermEs oI from spoiling their market this plan is at best befit only temporarily off effective ettive when a man pools his stock he has some kind of evidence that he is entitled to stock this evidence is salable the pool may hold for a time but sorrie some time it must break and when it d does break like the flood suddenly released it sweeps away everything before it and leaves ruin in its path A dam for a time will hold back a stream but sooner or later it must either eithe r overflow or give way under onder the strain LIMITS HOLDINGS no sane promoter will undertake the development of a worthless property he will hold no more stock than he is willing to pay hla his a assessments edg ii on he knows that he be will soon have to bear his share of the development expense and he dos does not relish the idea of paying assessments on worthless stock the assessable company is forced to mike statements to its ato block holders giving an account of its stewardship it must tell them how bow much money it lids has raised what it has been scant for and what there is to show for the expenditure it must tell them how much mach money it has in the treasury whether it has any debts and obligations sad and what it proposes prop oies to do with the proceeds of the next assessment ses in this way the stockholders are always informed ot of the the status of their investments and the progress the company in making development of its property the non nou assessable camany leaves its stockholders in igon rance WIN IN THE END but objects the believer in stock the directors of the assessable company om pany will freeze me out with assessments the answer to this objection is easy an honest continued on seventh page TWO KINDS OP OF MINING STOCK continued from second page board of directors will riot not barlly assess stockholders if the directors are not honest whether the company be assessable or non assessable the stockholders will realize nothing on their stock with an honest bonest board of directors in an assessable company intelligently handling a meritorious property the stockholders are sure to wn in the end and their stock will be ba worth something even with an honest board of directors in a non assessable company handling bundling a meritorious property the chances are ut at least seven neveu to ten that the company will tall fall the stock will be worthless wort liless promoters of 0 non assessable assa sable companies complain that the brokers interfere with their market b trading in their stock it is true that the brokers do hurt the market of 0 the non assessable treasury stock it is 19 not the ot of brokers the stock has been sold in most oases cases tor for many times its actual value the man who buys stock has i right to sell cell it it he be can when he be offers obera it tor for sale he be can only get tor for it what it will till bring on the open market the broker acts as his bis sales agent he is engaged in a legitimate business buei neEs often the man who wants to sell his stock needs the money and his bis stock may be the only asset he has upon which he can hope hop to realize anything ile he turns to the broker for h elp I 1 am borry to say that the stock of 0 hundreds of companies cannot be given away grves GIVES information the brokers always benefit the market tor for assessable stocks in most moat cases those these stocks have bare been sold in the first drat instance at their real value they can be sold on the open market often for much more the ordinal price the first buyer usually makes a profit on oa his investment honest brokers give five more or less leas reliable information about the sto stocks ks of the mining companies they are handling the client is told nce about the conditions of the company and its pr property the assessable company gives information as well the result is that the information information becomes general in well informed circles and the stock always has a market value and that market in a r ket value is generally the real value va 1 e of the stock many times it will sell tor for more than its actual value being forced up by buying orders the wise buyer and seller of mining stocks makes money the brokers generally give more information about mining g stocks than the mining 9 companies do especially the non aels able companies I 1 IN A summed up tip tile the situation is it us fol lows iowa assessable companies RUB information to their stockholders stoLk holders non NOD asse companies do not assessable stocks are sold at their real value non stocks are sold for more thuu they are worth assessable i amp anies honestly and intelligently managing mun aging meritorious properties succeed in the end non assessable companies under si millar conditions will fail seen times out of ten tho the holder of cheap non don assessable asses bable stock cun can club a man to death the assessable company carries the he club the non assessable company is driven to pooling as a last resort the assessable company needs no pooling the non assessable company tears fears the broker the assessable company calls him friend nou non assessable stock spells failure assessable stock spells success the sooner the buyer 0 of mining stock learns bis big lesson the better |