Investigation showed that dilatory message service was responsible for the bank's delay in certifying. Our deposits did not reach the bank as promptly as they should have. As a special favor to us that afternoon, while the tumult in front of our doors was greatest, the bank continued to certify checks until 3:30 o'clock, extending the closing time 30 minutes. Then they reported that a comfortable cash balance was still on hand.
The next morning the newspapers started a jamboree. First-page, last-column, double-leaded, scare-head stories greeted every New Yorker for breakfast, telling him about the panic among Curb brokers to sell the Scheftels checks the afternoon before. Needless to say it was the kind of notoriety that was likely to do greatest injury to the House of Scheftels. If anything half as bad had been printed about the strongest bank in New York, that bank would have been forced to close its doors before the day was half over.
Nor did I for a moment underrate the danger of our position. Between two suns I managed to assemble $50,000 in addition to our cash reserves, with promises of as much more as was needed. We easily held the fort. At the end of the day's business I created a diversion by appearing in the Scheftels board-room, flourishing a handful of $1,000 bills before the newspaper men. The scribes found the Scheftels corporation meeting all demands, and, at the end of the session, with a small bale of undeposited money in its possession.
The strain, however, was great. Confidence was again impaired. Many accounts were withdrawn by customers. We were compelled to ease our load by selling accumulated stocks at a loss. The price of Ely Central and other Scheftels promotions dropped. The decline was assisted by general weakness in other Curb stocks.
Peculiarly enough, at the time when the market for Ely Central shares was lowest, during the latter part of September, fourteen months after the Scheftels company had taken hold of the proposition, mine reports were most favorable. Underground development work and churn drilling had set at rest for all time the question of whether or not mineralized porphyry underlies the rhyolite cap or flow extending eastward through Ely Central ground from the steam-shovel pit of the Nevada Consolidated. Upward of $240,000 had been paid out for administration, mine equipment and for miners' wages to make this demonstration.
The Scheftels company was now informed that the Nevada Consolidated was actually meditating a trespass on the Juniper claim of the Ely Central company, in order to secure an outlet from the lower levels of its giant steam-shovel pit. Warning in writing had already been served on the Nevada Consolidated officials against such a course. On September 25th attorneys of the Ely Central Copper Company secured from a Nevada court an order restraining the Nevada Consolidated from proceeding with this trespass and citing it to show cause why it should not cease to trespass on other Ely Central ground.
The attorney telegraphed to New York that a bond was required before the injunction could be made operative. On September 27th and 28th telegrams were exchanged between the Ely Central offices in New York and the Nevada attorneys of the company at Reno as to providing sureties for the bond.
The sureties never qualified. A catastrophe befell us and brought to an earthquake finish the house of B. H. Scheftels & Company and all its ambitious plans.
The constant turmoil in which the House of Scheftels had found itself, from the day the Engineering & Mining Journal's attack appeared, had made it impossible for the Scheftels company to hold the markets for Ely Central and Rawhide Coalition. Impairment of credit, money stringency and a general declining market were partly responsible. But there was another important factor. Because of the time-limit of its options, the Scheftels company was forced, from time to time, to throw stock on the market at prices which showed an actual loss.
It had one market winner which showed customers and the corporation itself a large profit, namely, Jumbo Extension. I held an option on approximately 450,000 shares of this stock at an average price of 35 cents, which I had turned over to the corporation. The market advanced to 70. Following the tactics employed in Ely Central at the outset of that deal, the Scheftels corporation had urged all its customers to buy Jumbo Extension at the very moment when I was negotiating for the option in Goldfield, with the result that purchases were made in the open market by readers of our market literature at from 25 cents up, with accompanying profit-making.