The Scheftels corporation transacted considerable margin business with its customers in the stocks which it sponsored—Ely Central, Jumbo Extension, Rawhide Coalition and Bovard Consolidated. If the Scheftels corporation was run by rascals wouldn't they have been tempted frequently to throw their weight on top of the market and endeavor to break the price of stocks to wipe out the margin traders? Did the Government find any evidence of this in the books? No. It found evidence—overwhelming and cumulative—that on nearly all occasions the Scheftels corporation actually exhausted its every resource to support the market in its stocks and hold up the price in the interests of stockholders. Evidence was also found in quantity that the Scheftels company discouraged the practice of margin-trading.
The superseding indictment handed down by the Grand Jury late in August, 1911, eleven months after the raid, eliminated the charge of mine misrepresentation regarding the Scheftels promotions and reduced it practically to one of charging commissions and interest without earning them.
Not less than 85 per cent. of the total brokerage transactions of the Scheftels corporation were in their own stocks, and at nearly all times in the Scheftels history it had on hand, put up on loans or in banks under option, anywhere from three million to seven million shares of these securities. It actually bought, sold and delivered in this period over fifteen million shares of stock!
As already stated, the Scheftels corporation made it a practice to sell stocks on the general list as an insurance against declines in the market which might carry down the price of its own securities, and this, in the finality, was what the Government, after the expense of hundreds of thousands of dollars and the employment of the wisest of counsel, was compelled to tie to in order to justify in the eyes of the great American public the use of the rare power of seizure, search and arrest and of its denial of a prayer for a hearing to the victims which was made before the arbitrary power was used.
CHAPTER XII
The Lesson of It All
What is the lesson of my experience—the big broad lesson for the American citizen? This is it:
Don't speculate in Wall Street. You haven't got a chance. The cards are stacked by the "big fellows" and you can win only when they allow you to. The information that is permitted to reach you as to market probabilities through the financial columns of the daily newspapers is, as a rule, poisoned at its fountain. It has for its major purpose your financial undoing. Few financial writers dare to tell the whole truth—even on the rare occasions when they are able to learn it. Most of them are, indeed, subsidized to suppress the truth and to accelerate public opinion in the channels that mean money in the pockets of the securities sellers. As for the literature of stock brokers it is generally even more misleading. Few brokers ever dare to tell the whole truth for fear of embittering the interests and being hounded into bankruptcy and worse.
As for myself, what excuse have I had for catering to the gambling instinct? This is it: I thought the promoter and the public could both win. I now know that this happens only rarely. As the game is now generally played by the big fellows, the public hasn't got a chance.
I have not got a dollar. Who profited?
The answer is: If anybody, the aggregate. The world has been the gainer. It is richer for the gold, the silver, the copper, and other indestructible metals that have been brought to the surface, as a result of this endeavor, and added to the wealth of the nation.