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Show I Kind Of Stocks to Buy H t i Cheap Stock Worthless, Says Mining Re m view, And It Tells Reason Why. I M Tho following article Is from the 1 Salt Lake Mining Review, a mining B publication that enjoys tho contldcncc H , that comes as a result Of real merit. H The Itcvlcw Is a booster for the H ) western mining Interests, but under- H I i stands that the best way to boost Is H J to destroy Illusions In the minds of H j i Investors and to help break up wild- H I I cat propositions. The Review's tcll- H I i torlal columns ever contain advlco of H ' ' ! value to both mining man and Inves- H tor, and the following In reference to H I, 1 the puicha'cof mucks Is Invaluable. H Read It, and pu In by It. The He- view says: H Cheap Stocks. H ' Many fake mining companies, as an H I alluring bait to thu public, advertise H ' and olfcr for sale tieasury stock at H one or two cents a share. The olfcr H seems a temping one and many of tho H unwary are quick to seize It, believing H that because they can get so many H shares In n valuable (?) mining prop- H crty for so little money that they arc H. getting a bargain. iln view ol tho many offerings of this character that are being made by unscrupulous companies through ( equally unscrupulous newspapers, It is H , well to consider for a moment and H . decide If cheap stocks oiler n safe and H ' prolltablu Investment, or whether the H buyer of such shaics docs not run a H j great risk of losing all that he has In- H vested, no matter whether the turns H I so raised by mining companies arc properly employed In mine development develop-ment or diverted to Improper uses. A Few figures. . The object In offcilng treasury stock for sale by a m'lnlng company Is and should be for development and equipment equip-ment purposes. A certain amount of work has to be done before the property prop-erty of a company, no matter how valuable and promising, can hope to reach a paying and producing basis, and all thu way from 25,000 to $100,-000 $100,-000 must bo expended 1 eforc such a result can be attained. Say a company com-pany Is capitalized at l,O00,0C0 shares with r00,000 In Its treasury. Jf this treasury stock Is sold at a cent a share It will bring only $.1,000 If all of It Is disposed of. Five thousand dollars Is a tidy little sum If one desired to use It In the establishment of a candy store, but It will not go far when It comes to mine development. The equipment of the mine with a small amount of machinery and the sinking of a shallow shaft or tho driving of a short tunnel would soon exhaust a treasury fund of this amount, and then the work must bo discontinued or tho company must go Into debt If operations are continued. In either case, failure Is Inevitable, for the com-piny com-piny has exhausted Its resources, unless un-less Its stock Is assessable, (and all companies should be) when the shareholders share-holders will bo called upon to pay more for their stock, or lose what they have. And they generally quit. In disgust. Viewed from almost every standpoint stand-point cheap mining stock is virtually worthless, and for the reason that the sum raised from Its sale Is entlicly Inadequate In-adequate for tho purpose for which it Is Intended. Cheap No Good. Hondsand Mortgages says; "When you buy cheap stocks you get Just what you pay for." It might, have added that onu cannot buy anything cheap and get anything that is good. Tho Wallace and Motuls says: "One of tho potent object objections to cheap stocks raised by tho easterner Is that a mine cannot be developed on cheap stock." lloth papers are right In their premises. Cheap stock Is so cheap that It Is practically worthless, excepting for the promoter, who usually pockets the proceeds from such sales and falls to make an accounting ac-counting to the shareholders, for the company Is generally a myth; or If in actual existence, tho promoter Is tho "whole thing," and knows that tho sale of tho treasury stock at one or two cents will not develop tho company's com-pany's property, If It had any. A Good Investment. It is far better for the Investor to pay twenty-llo or llfty cents, or $10 a shate, for treasury stock In a company of standing and possessed of meritorious meritor-ious property than for him to accept ac-cept onu and two cent stock as a gift, for ho must know that when a company com-pany gets a price for its treasury stock somewhere In keeping with Its pros-pectlve pros-pectlve value, the company has some show of developing a producing and paying mine. Tho money thus Invested In-vested has some show of coming back with heavy Interest. In paying a good price for good stock tho Investor has a good chance of getting heavy returns; but when he Invests In cheap prices ho might is well "throw his money to the birds," for, In nine cases out of ten, ho will never sec It again and would probably not have tho satisfaction sat-isfaction of even knowing where It went to. The company offering Its treasury stock at a good price must have good standing If It hopes to raise money by this means, but this very standing Is a guarantee to tho Investor that the proposition Is legitimate, and therefore there-fore that tho Investment carries with It some asuranco of prollt and success. The moral Is that It Is far better to pay a good price for something that Is good than It Is to pay a pitiful sum for something that Ispractlcal worthless." |