The peripatetic mining prospector of our Western mining empire—the dauntless finder of mines who laughs at hardship and ridicules the thought of danger, who makes companions of Gila monsters and the desert rattler, whose only relief from the everlasting silence of the untrodden reaches of arid wastes is the sex-call of the coyote—has the choice of just two markets for the sale of his "find." He may either accept a comparatively small sum from the agent of a powerful mining syndicate for his prospect or he may receive a fair speculative price from the professional promoter.
The great mine financiers of this country rarely compete with one another for the purchase of any mining property. This is particularly true if one of the others happens to be operating in the district where the small mine owner's property lies.
As a rule, the original owner, whose entire fortune is perhaps tied up in the property, then finds himself in the position where he must either accept the first offer, however small, which is made to him by one of these dominant interests, or find that market closed to him.
His alternative, as mentioned, is a sale to the independent mine promoter of comparatively small means, who incorporates a company to own and develop the property and finances the operation from start to finish by selling stock in the enterprise to the general public.
The method of this class of professional promoter—the hope of the small mine owner—in marketing stock, usually involves the liberal use of the advertising columns of newspapers. He lacks "pull" or power sufficient to get his stock and mine talked of favorably in financial literature of the day to a degree that will excite public interest, and so he must construct his own publicity forces.
Advertising costs money and the public foots the toll. But if the promoter is honest, this item of cost is not in itself an argument in favor of stock offerings of the multi-millionaire mine capitalist who does not patronize the display advertising columns of the newspapers. Nor does it establish a case against the wares of the promoter who does. The promotion expenses incurred by the advertising promoter do not nearly approach in their totality the difference between cost price and the price at which the magnate promoter usually invites the public to participate in similar enterprises.
For example: A few years ago a certain man bought a certain mine for $1,000,000 on time payments. He has been making a market for the stock of that mine on the New York Curb at an average of above $8 per share, or more than $8,000,000 for the property. His firm, members of the New York Stock Exchange, have been advising people in their widely circulated market literature to buy the stock at this figure. And yet the property is without a reduction works, will need $2,500,000 to $3,000,000 in excess of money now in the company's treasury to erect one, which money must yet be raised somewhere and somehow, and the producing era of the company can not possibly begin for two years yet at the very earliest. I could cite many such instances.
When Nat. C. Goodwin & Company of Reno purchased the control of Rawhide Coalition, during the exciting Rawhide camp boom early in 1908, the valuation agreed upon for the property was $700,000. This was considerably more than the original owners could obtain for it at that time from any big interest. It, too, needed milling facilities.
As a matter of fact, but for the success of mine promoters of the Nat. C. Goodwin & Company and B. H. Scheftels & Company class, the great Comstock lode, which produced over $600,000,000 in gold and silver bullion, would have likely remained undeveloped. The big public demand in the early 70's for Comstock mining shares of all descriptions was created by a series of flamboyant flotations and aggressive stock-market campaigns. If the Con. Virginia mine had not opened up into a bonanza ore-body at a depth of 1,400 feet, the frenzy of speculation in Comstock shares might have gone down in history as another South Sea bubble.
The "brass-band" promoter, be it understood, is therefore not without honor in the Far West. Deprive the mine prospector of the services of this style of enterprise projector, with his operating machinery, namely, facilities for appealing to the speculating-investing public, and you hit the small Western mine man a solar-plexus blow. Conversely, every obstacle placed in the way of the mine promoter of loud methods and moderate means is an added cause for rejoicing on the part of the Wall Street multi-millionaire mine capitalist.