You wonder why I criticise statements from Nevada.
Respectfully yours,
(Signed) C. M. Schwab
The general impression in Nevada, as I have gathered it, is that Mr. Schwab's mining enterprises have been great disappointments to him, but that he did not lose any very large sum of money, and that the public did. His enemies go so far as to allege that he, his brother, and his brother-in-law, Dr. M. R. Ward, made millions out of the public.
I have an opinion, and I may be allowed to express it. Mr. Schwab, at the time he became a promoter of Nevada mines, was an expert steelmaker. He knew little or nothing about silver, gold and copper mines. The fact that friends in Philadelphia, who knew as little about the game as he did, had made a fortune in Tonopah (on the advice of a man who did know) should not have influenced him. Because the Mizpah mine at Tonopah, promoted by Oscar A. Turner as the Tonopah Mining Company, had made good in a phenomenal way, Pennsylvania stockholders had rolled up fabulous profits in the venture. Under this hypnotism Mr. Schwab "fell" for Tonopah Extension.
Later, when Tonopah Extension showed a market enhancement of more than $16,000,000, Mr. Schwab was in an ideal frame of mind to succumb to Montgomery-Shoshone.
And when Montgomery-Shoshone in the Bullfrog boom showed a market enhancement of $8,000,000, it did not take much argument to get him into Greenwater, another "bloomer," which is described further on.
Market profits were evidently alluring to Mr. Schwab. He failed to realize that his own great name was in large measure responsible for the rise in price of his securities.
Sam C. Dunham has informed me that Mr. Schwab told him he refunded to his personal friends in Pittsburg, who subscribed for Montgomery-Shoshone stock on his recommendation, between $2,000,000 and $3,000,000. This ought to be convincing that Mr. Schwab was guiltless of any intent to profit at the expense of others.
Mr. Schwab's lack of caution, however, is instructive to the losing speculator. It furnishes a startling example of the danger in banking alone on an honored name for the success of an enterprise, and it also drives home the truth of the adage, "Every shoemaker should stick to his last."