When B. H. Scheftels & Company, with whom I was identified, were raided by the United States Government in September, 1910, a wail went up from the Western mine operator to his Representative in Congress. The best sentiment of the Far West, as I was able to gather it, favored the idea that the last hope of the small Western mine owner had been shattered. During the short period of B. H. Scheftels & Company's activity in New York it raised directly nearly $2,000,000 for Western mining properties and indirectly influenced in that direction at least $10,000,000 more.
The raid was a body-blow to the small Western mine owner who needs capital to develop his properties and has no affiliations with capitalists. Since the raid I do not know of a mine owner of any of the great Far Western States who has successfully financed a mining proposition in the East except by delivering his property in its entirety into the hands of some big interest, which has taken it over for a sum insignificant by comparison with what the public may ultimately be expected to pay for it when the stock is finally marketed on the curbs and exchanges.
I BUCK THE WALL STREET GAME
After I had conducted the big camp publicity campaign of Rawhide, which I had done with a view to centering the attention of the American investing public on the speculative possibilities of the stock of the Rawhide Coalition Mines Company, and in that way endeavored to finance the proposition—after I had failed by this method, in the teeth of the bankers' panic of 1907-8, to dispose of enough stock to finance the company for deep mine development, mill equipment and the payment to the original owners of the price for the control agreed upon, I came to New York, late in October, 1908, bent on trying to succeed in the encompassment of my original purpose both by direct appeal to the public through display advertisements in the newspapers and by making a deal for part of the enterprise with the "big" fellows.
I found Rawhide Coalition stock listed on the Curb, and the market quiescent. Public interest in the East had been aroused to some degree, but the market was not absorbing stock. An effort to induce leading stock brokers to mention the issue favorably in their market letters failed. Those who were willing to give the stock some publicity exacted either a "call" on stock at a low price or an out-and-out reduction below the market quotation for such stock as they disposed of.
Such concessions were not to be thought of. It was the intention of Nat. C. Goodwin & Company to support a rising market for Rawhide Coalition. My Goldfield experience with mining-stock brokers convinced me that few might be expected to protect the shareholders' interest in such an enterprise. Commission mining-stock brokers of that period, who put their customers into a stock at, say, 30, were tempted to advise profit-taking when the price advanced to, say, 50, because by the operation they made another commission and often earned an additional, or third, commission by getting their customers out of the stock at a profit and into another one, levying a commission on each transaction.
Nat. C. Goodwin & Company decided to "try it on" direct with mining-stock speculators by appealing to them through the advertising columns of the newspapers, asking them to purchase the stock on the New York Curb through their own brokers. Also, Hayden, Stone & Company, the Boston and New York banking firm, were induced to agree to raise $1,000,000 for the company for railroad and mill purposes, if their engineer would report favorably.
Provided with money with which to buy advertising space and furnished with stock certificates to supply the market, Nat. C. Goodwin & Company inaugurated an active campaign on the New York Curb.
What happened will be found instructive to the reader in several particulars; among them these:
(1) The free-lance mining promoter does not always "get the money" when he succeeds in creating a buoyant market for his stock.