Show why so many mining investments are losses by letson balliet E M if a should come to the average person pers and ask lil him to invest in some soine stock of a proposed bank of which lie was to be the president with the corner grocer elgar cigar merchant t and local tin etc as the directors lie he would be 1 laughed at but strange to say these same gentlemen could get up a mining coni company pani generally with one or more men who I 1 have a ave ninde made business failures in other lines and the public would gleefully dig up lip though not one of them understood the technicalities of mining or drilling for oil why some time ago the publisher of one of americas great magazines expressed a preconceived idea that all mining was risky or worse being a mining engineer I 1 disagreed with him and he asked me why are so many mining investments failures I 1 considered that a fair legitimate question of public interest and I 1 told him he then said 1 I wish you would write an article on that subject for me I 1 replied 1 I will if let me be fair to mining and state both sides of the subject in the same article but with your preconceived ideas blue pencil the article if there is one word favorable to mining return the article with a printed slip saying we are sorry but your article does not fit in with tile the present program of any of y Ys our publications his answer was startling we are just like a theatre owner we have to produce what the people want in other words I 1 said you admit that your publication is one that reflects preconceived public opinions right or wrong and makes no attempt to mold it along correct lines he denied that of course but bu t nevertheless he refused the article I 1 ill tell you why so many mining investments result in losses to the investor if let me start with a paragraph or two in defense of real mining not stock selling mining is basis of industrial progress every man woman and child in the civilized world it is the greatest mining 6 depends directly or indirectly upon factor in civilization and in industrial du progress t in fact the primitive primitive tive we without mining we would revert to P and be in in the i illiterate iterate ll would become cold idle hungry b dark there would be no printing presses nor type no school books telegraph telephones railroads steamships steamship fuel ss coal avs carp carpenter e anter tools tool s automobiles automobile sp electricity oil quarries for stone sulphur for matches stoves you would compasses factories looms nor industries bridges fire live in in h animals with a club cook over 0 ver a an n open eaves ves and have no means of transportation or communication but the of the world i is s bec becoming eming too dense to population lived hence hen c e furnish anish a living to so many as the primitives primitive notwithstanding s without mining the masses would starve no the popular sentiment that the farmer is the first man mail in in line of necessity permit me to point out the fact that p primitive rim man first became a quarryman making stone implements with which to hunt and kill his game later he progressed into making metal instruments of the chase and for scratching the ground in search of roots and still later into cultivating them with the cultivation of foods they became more easy to obtain less time was devoted to hunting food and more time was devoted to research science industrial progress and civilization without the cultivation of foods the female took over the large part of labor in supplying food and the male had more time for thinking his mind grew to envy conquest and desire to possess he invented instruments of defense and offense to be used against others whose greed envy and desires were the same perhaps say it elevating ro gress but nevertheless it was inventive mental progress he dug for ornaments made slaves of his enemies and made them dig he then invented agricultural hoes and tools so that the slave could produce more As the minds of man thought of new t breeds they made plans to possess to obtain food easier and as mining and invention progressed agriculture followed the farmer today plow harvest transport nor sell his products without the mines why mining investments sometimes fail with that much in defense 0 of f mining I 1 will attempt to show why mining mining investments too often result in losses b from the ve very ry be beginning ginning i a ambition and greed have influenced fluen ced all ages of mankind it is a pot potent ent influence today with every human being every one wishes to acquire greater comfort better conditions easier ways of liv living things of beauty or wealth from the savage to civilized man ambition or greed has been and always will be a dominating influence in human nature this ambition is fanned to a flame by stories of sudden w wealth fortune hunting t stirs more or less in the blood of all of us the chance th the e gamble with tile the ambition behind it destroys 0 our ur sober and saner reasoning 1 when we read the story of some one striking it rich we envy him we crave the excitement of a similar experiences experience and we rush for it without any knowledge of where or how to obtain it it is upon this thin element in human nature that the stock salesman depends when unloading incompetently conceived illy advised and wilfully ily nefarious promotions business is a game of confidence you do business with your ban banker ker your merchant if you had no confidence doctor or your lawyers lawyer your subscribe for anew a news in him you do not even paper or magazine without vit hout you have confidence in its policies why then should anyone invest in mining stocks promoted and handled by men you do not know and never heard of and in whom you can have no confidence there was a time when certain parts of the world were unexplored that pioneers into new regions found nugget gold in the gravel bars on certain streams thousands rushed to the vicinity of every new find A few found fortunes and many did not As the world became more densely populated much of this surface 6 gold old was picked up washed out and the lands became privately owned until 1 most opportunities for fortune hunting have passed except perhaps for possibilities in remote parts of mexico central america south america and siberia this was fortune hunting not mining as we know it today if we produce metals today we must disabuse our mind of the get rich quick idea of the fortune hunters and realize that making snaking a mine is a slow tedious job requiring heavy initial investment great technical skill and executive ability to delve into the interior of the earth and remove ini mineral deposits with financial success websters dictionary defines mining as an underground tunnel or excavation where ores and minerals are produced the dictionary does not say its a hole in the 6 ground nor a place where someone hopes to find ore or is is 1 it hunting for ore such a place is a mere prospect most of the so called mining companies that are offering in Z 1 stock for sale are not mining 15 companies at all they are merely prospecting or developing companies they are capitalized hopes dreams or ambitions the best blue sky law that could be passed would be one that would prohibit the use of the word mining in the name of prospecting companies if the ahe am ambitious bilious bit ious promoter was obliged to call his company the dig more prospecting company instead of the dig more mining company the deception would be removed from the name undoubtedly the deception of calling a company a mining company when it is only a prospecting coin company pany should be construed ipso facto as fraudulent intent how mining companies get started mining companies have two sources of origin first the adventurous roving prospector discovers a prospect or a good indication as he calls it he digs one or more holes on it determining its size and extent as well as he can by himself he then tries to sell it he brings specimens of his best ore to town has them assayed and shows them to merchants bartenders bankers lawyers doctors loafers newspaper reporters and everyone who will look at them its his method of advertising some one becomes interested and goes to see it perhaps he takes some practical miner or friend along with him if it looks good 6 he will take an option on it for a few hundred or a few thousand dollars with possibly a small payment down this new owner will then hire a cou couple P le of men and sink the prospect holes somewhat deeper if the size and quality maintains its appearance or improves the prospector is paid the balance of his money then some reputable geologist and engineer is employed to make a careful study of the formations and estimate the expense of developing tl it until it can become a mine where ores and metals are produced after that a company is organized incorporated which is in reality a development company to develop this prospect into a mine or as mining men say to make a mine out of it such promotions generally have honest intentions but are frequently incompetently financed and managed and result in failure until they fall into competent hands and are reorganized all mining is a moving job permit me to call your attention to the fact that from the very nature of the business there can be only one crop in any mine no matter how rich it is or how big it 1 s it cannot be replaced when it is mined out it is gone it is a deposit of mineral placed in the ground by nature and all mining is therefore a moving b job no mine ever pays a dividend all the ore in the ground is the mines asset the problem is to move the assets from the ground separate the metal from the ore and transport the assets to a deposit in the bank with the least expense in order that the greatest amount of the assets may reach the bank to be divided amon among b the stockholders A mining 6 company therefore merely divides its assets when it pays what are popularly called dividends the moving job is one that requires great engineering skill and ability the deposit may be in an inaccessible or remote section of the country wagon roads railroads brid bridges brides Z es trestles cable tramways etc may be a part of the problem A power plant on a river a hundred miles away with the necessary damming of the river and transmission lines may be a factor to consider in comparison with a steam plant or cesiel engines transportation of fuel oil and other supplies must be considered hoisting equipment air compressors compress and pumps must all be figured Z and the labor situation handled as well vell as the chemical problems of separating the metal from the ore in short the greatest skill of the civil engineer mechanical engineer electrical electrical engineer and the chemical engineer is required in n every big mine together b with an intimate knowl knowledge edae of geology and executive ability these are the problems that face the mining b engineer for the novice to attempt it is not enterprise there is nothing in law or medicine that can compare with mining questions for the investor to ponder over the investor in any mining company should ask himself three questions 1st ast has the mine sufficient assets ore to justify the moving ad has the company competent engineering skill and management to move them economically and efficiently ad has it sufficient financial backing to competently carry out the engineering plans of equipment de development and operation failure to answer any one of these questions in the affirmative can result only in losses no matter how rich or how big the deposit may be even a foolproof fool proof mine as we call some of the rich mines can waste 60 to 75 of their assets in getting them out such managers it gut the I 1 mine of its richest ore and fail when they have to fall back on the lower grade ores that would be highly b profitable under competent management most of the failures of meritorious properties are due to two interlocking causes cause s incompetent in comp e tent finances or incompetent it management not infrequently we find big financial backing wasted by an incompetent manager who has pulled the wool over the eyes of the directors by affability and words of self praise A reputation gained on a foolproof fool proof minet may wreck a good mine that would be a great success under competent management emerson said two ships came into harbor one with sails all tattered and torn and one all and span and yet I 1 cannot judge the masters until I 1 know from whence they came and through what kind of weather they had passed J B hag haggin gin ogin o once said 1 I have a mine that will not stand mismanagement but I 1 cannot imagine henry ford or john D rockefeller or the owner of any other business making such a statement and yet the owners of a mine that produces eight to ten million dollars a year are satisfied with one million in dividends with the balance of the production in excuses and explanations the wide publicity failures now we come to the second source of ori origin b in of mining companies these are by far the greatest number and with few exceptions are failures these the se are the ones that have the widest publicity and catch the unwary investors dollars many men who have made business failures in their own home town rush into the mining business to recoup their fortunes no matter how incompetent he may be as a business man how lacking he may be in technical skill or how incompetently conceived or illy advised the scheme may be many of his former business acquaintances atances nt ances who trust him with a dollar to re embark in the business he understands will fall over themselves to give him money for his mining stock such organizations frequently form a board of dir directors actors of their own home town well meaning honest neighbors and business men not one of whom knows the first thin thing t about the business of mining there is only one result possible for such organizations and that is ultimate loss for incompetent management cannot interest competent capital and incompetent finances cannot obtain competent management no really competent engineer will accept employment when he can see from the start that the proposition must of necessity fail for lack of finances A few rich specimens to excite the prospective investor mean nothing no mine produces tonnage day after day of rich specimens A list of assays essays does nt mean anything either for a wheelbarrow full of rich specimens will make a thousand assays essays any old prospect hole can supply a few be a good prospect specimens or a few assays essays it even if it could not every mining district in the west where good mines are operating has a number of broken down business men the east t han haning hanging ing around town or ambitious pro promoters motors from aas za waiting for a chance to get hold of soniat something hino t they may chay at times work in the mines clerk in a store drive a kind of job for a meal truck wait on table or get some ticket lickei until something opens up when comes to town w with ith the report some prospector and stake on off of a new strike they rush out to the vicinity ground as their mining claims round around the e on often for a radius of five or ten miles a the inal al discovery the ground will be staked or located as claimants call it these are the mining b claims that are of the e 01 purpose durpos for usually dually put into mining companies stock selling tricks of the trade blue 0 sky permits is paid a little cash W payment sometimes the locator t himself of f stock for but block 0 more often he takes a huge he doean doesn does t and d claims to the comp company any deeds the claim or wants tse the he van turn his claims over for stock just because but gantse because idock or thinks it will ever py produce any his P profit stock w while hile esie the ile he can immediately begin to peddle boom is on |