Incidentally, Mr. Schwab's mining career points another moral. It is this: Don't think, Mr. Speculator, because a promoter represents the chances of profit-making in a mining enterprise to be enormous, and you later find his expectations are not realized, that the promoter is ipso facto a crook. Big financiers are apt to make mistakes and so are little ones. Undoubtedly grave misrepresentations are made every day, and insidious methods are used to beguile you into forming a higher opinion regarding the merit of various securities than is warranted by the facts. But mine promoters are only human, and honest ones not infrequently are carried away by their own enthusiasm and themselves lose their all in the same venture in which they induce you to participate.
WHY THE BOTTOM FELL OUT
When Montgomery-Shoshone was enjoying its market hey-day the Bullfrog Gold Bar Mining Company was promoted at around 15 cents a share on the usual million-share capitalization. A year later the price jumped to $2.65 on the San Francisco Stock Exchange, and the stock was widely distributed among investors. Recently the company was in the sheriff's hands. The biggest losers in this venture were Alabama people, who had great confidence in the promoters.
Other Bullfrog derelicts in which the public lost vast sums of money were Gibraltar, Bullfrog Steinway, Shoshone National Bank, Bullfrog Homestake, Bullfrog Extension, Denver Rush Extension, Mayflower, Four Aces, Golden Scepter, Montgomery Mountain, Original Bullfrog, etc., etc.
Mining-stock brokers of the cities went into ecstasies over Bullfrog during the height of the boom in that camp. Philadelphia mining-stock brokers fed Tramps Consolidated of Bullfrog to their clients. Pittsburg brokers recommended Montgomery-Shoshone. Butte brokers placed large blocks of Amethyst. Gold Bar was distributed by brokers of the South. New York brokers were behind Gibraltar, Four Aces, Denver Rush, Montgomery Mountain, Eclipse, Golden Scepter, National Bank and a score of others.
Practically every dollar of the millions invested in Bullfrog stocks has been lost.
The cause of the failure of the Bullfrog district to make good was not the absence of gold-bearing rock, for there is much of it in the district, but it has been found that the per ton values are too low to make the mines a commercial success. Bullfrog is situated on the desert and has no timber and but very little water. Promoters and investors did not realize this until mills were constructed. Then it was too late. If the camp were situated on the timbered shores of the Hudson River, the stocks of many of the mines of the district would probably be in great demand at above par.
Probably the most remarkable fact regarding Bullfrog is that its securities were more strongly recommended by Eastern brokers than the Goldfield issues and became more fashionable at this early period in Goldfield's history. Eastern brokers then had little confidence in Goldfield; and at the very time when the stocks of Goldfield representing inside properties, which later made good in an extraordinary way, were being offered, they advised their customers not to buy. The general cry then was that it was a fly-by-night offshoot of the first great Tonopah boom, and the idea prevailed in the East, because of the ascending influence of George Wingfield, then principal owner of Tonopah's leading gambling hell, that Goldfield was a haven for gambler's and wildcatters.
It was during the early days of the Bullfrog boom that my friend W. J. Arkell's career as a mining promoter came to a sudden end. It will be remembered that when he left Goldfield to go to Tonopah to make the Tonopah Home deal his cash capital was $35. He closed the transaction for the option on the million shares of Tonopah Home's capitalization at a price around five cents a share. Then our "partnership," of three days' duration, came to an end. Arkell journeyed back to San Francisco and there declared me out.
Arkell was a prominent figure for a while as a San Francisco mining-stock promoter. He listed Tonopah Home on the San Francisco Stock Exchange. Then he started in to sky rocket the price. The rise continued until the stock sold at 38 cents, an advance of about 700 per cent, in a few months.