During the course of our attacks on Senator Nixon in the Nevada Mining News which followed at various intervals, the newspaper accused him of making promises of early dividends to Goldfield Consolidated stockholders which he knew he could not keep; of having been the State Agent in Nevada of the Southern Pacific Company at $150 per month during the Huntington régime when legislatures were bought; of having bilked the investing public out of millions in Goldfield; of having carved his fortune, that made possible the acquisition by him and his partner of control of the Goldfield Consolidated, out of a gambling house in Tonopah; of having gathered his first mining property and mining-stock interests in Goldfield from prospectors who lost money and surrendered their mining claims and stock certificates to the gambling house in lieu of the cash; and of being generally a financial and political freebooter of the most despicable sort. And the Senator never sued for libel nor proceeded in the courts in any way whatsoever to obtain a retraction.
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. That edition contained another editorial on Senator Nixon, headed "Branding a Bilker." It accused him of saying in his annual report a few months previous that payments of dividends on a regular basis would commence within a short time, and contrasted this statement with the signed interview published in the Nevada Mining News, in which he said dividends would be paid "whenever the trustees thought it wise to do so and not before."
Within a day thereafter the stock "busted" wide open to $51/8 bid, $5¼ asked, and the whole Goldfield list smashed farther in sympathy. By June 8th Goldfield Consolidated had crashed to $4.50.
On the dip from $7.50 to $4.50 an opportunity had been offered to Berney Baruch and his associates to buy back in the open market all of the stock they might have sold on the way down from $10 to $7.75, which was the option price. Then the stock was promptly manipulated back to $7. On the way back to $7, the outstanding short interest (of other traders who had accompanied the decline with their selling orders) was forced to cover.
To help along the covering by outsiders up to the $7 point a report was circulated by lieutenants of Senator Nixon in Reno that a dividend would be declared before the end of June, and almost simultaneously the general manager of the mining company in Goldfield put forth a similar tip. As the market began to recover toward the $7 point, Senator Nixon went to San Francisco and was seen often at the sessions on the floor of the San Francisco Stock and Exchange Board. On the day before the bulge to $7 he was quoted in a San Francisco newspaper as saying that Goldfield Consolidated was such a good thing he would not take $20 per share for his stock.
When the stock hit $7 and the shorts were being squeezed the hardest, Senator Nixon was quoted as saying in still another interview that a dividend was not far away. This interview was carried over the telegraph wires to all market centers by the Associated Press. At the same time a story was printed in the New York Times saying that it was reported on the Street that J. Pierpont Morgan, acting for the Baruch-Ryan crowd, had taken over the control of the Goldfield Consolidated. The shorts were successfully driven to cover. Then the price eased off again in a day from $7 to $61/8.
A month later Mr. Teague became editor in chief of the Nevada State Journal and severed his connection with the Nevada Mining News. I succeeded Mr. Teague as editor and my name appeared at the head of the editorial columns. At about the same time the Sullivan & Rice enterprise was abandoned. I discovered that most of the money Mr. Sullivan had put into the corporation had been borrowed by him from a member of my own family with whom he had hypothecated most of his stock in the company. A rumpus ensued which ended in the shutting up of the shop.
By August Goldfield Consolidated had been manipulated back to $8.37½ a share. Mr. Baruch's option could certainly prove of little value to him unless the stock sold higher at periods than $7.50. But he now evidently found it a hard job to hold the stock above $7.50. By September it had receded again to $7.40. At this period it was reported in Reno that George Wingfield, sick of his partner's bad bargain, was beginning to assert himself and demanded that the Baruch option be cancelled at whatever cost.
The erratic price movement of the stock was causing the loss of public confidence. The manipulation appeared to be raw. Without any important transpiration except the news of the Baruch option and the varying statements put out by Senator Nixon from time to time regarding the plans of the company, which was now awaiting the erection of a huge mill before going on a regular producing basis, the stock had dropped from $10 to $4.50, recovered to $7 and eased off to $61/8, rallied to above $8, and was again tumbling.