The next morning I strayed through the diggings. Sacks of ore in which gold was visible to the naked eye were piled high on every side. The Stray Dog, the Jumping Jack and the Dexter were the three principal producers. They honeycombed one another. I questioned some of the prospectors as to the names of the single claims adjoining the Stray Dog, Jumping Jack and Dexter. They informed me that there was one group of claims adjoining that could be bought for $5,000. With $10 in my pocket I proceeded to purchase it. I gave a check for $100, signed a contract to pay the balance of $5,000 in 30 days or forfeit the $100, and immediately started back to Goldfield to induce the president of the bank to honor my check on presentation. He did.
When I returned to Goldfield I carried with me many specimens of high-grade ore. They were placed on display in a jewelry store. There was great excitement, and before night a stampede from Goldfield to Manhattan ensued which in magnitude surpassed the first Goldfield rush.
A few days later I returned to Manhattan and sold my option for $20,000 cash. While I was there I met C. H. Elliott. Mr. Eliott had "cleaned up" in Bullfrog. He told me that he had formed a corporation partnership in Goldfield with L. L. Patrick, one of the owners of the great Combination mine—which was later sold to the Goldfield Consolidated for $4,000,000—and Sol. Camp, a mining engineer from Colorado. The name of the concern was Patrick, Elliott & Camp, Inc. It was organized to promote mining companies. Mr. Patrick is now president of the First National Bank of Goldfield.
Mr. Elliott asked me to stay in camp for another day until he could pick up a good property. He made a deal with some cowboys for a large acreage embracing the April Fool group of claims, scene of the original gold discovery. Twenty leases on this property were in operation, and the surface showings were promising. If the ore "went down," the mine would prove to be a bonanza. Mr. Elliott incorporated a company known as the Seyler-Humphrey to own and operate the ground.
We returned to Goldfield. My publicity bureau telegraphed the news of the Manhattan discoveries to a long chain of newspapers East and West. Then I put out a big line of "display" advertisements in the big cities, offering for sale stock of the Seyler-Humphrey. The entire issue of 1,000,000 shares of Seyler-Humphrey was oversubscribed at 25 cents a share within two weeks. This was the result of $15,000 worth of advertising, and the profits of the firm were $100,000. In quick succession Mr. Elliott promoted the Manhattan Combination and the Manhattan Buffalo. Within six weeks the firm's promotion profits amounted to approximately $250,000.
HOW ABOUT THE PUBLIC'S CHANCES?
I asked Mr. Elliott one evening, shortly after Patrick, Elliott & Camp earned their first $250,000 from their three Manhattan promotions, whether he did not think the public was entitled to subscribe for this stock at a lower price and at a smaller profit to his corporation.
I recall that he said: "The article we sell is something that somebody wants and is willing to pay for. What we have sold them is worth what we have charged. The fact that we are on the ground and have endured hardships entitles us to a good profit, provided the gold showings on the surface of the properties are not exaggerated. The sale of the stocks has been accelerated by your gift of presentation through advertisements. Big department stores and advertising specialists in the cities pay from $15,000 to $30,000 a year for that kind of talent, and we on the desert also have a right to avail ourselves of it."
"But suppose the properties don't make good?" I queried.
He answered: "It is not a case of excessive optimism for one to expect that Manhattan properties will make into mines, in the presence of such wonderful surface showings; and so long as we are not knowingly guilty of deception, no harm is done. If the Manhattan stocks we have promoted make good, $5 will be a reasonable price for them, and if they don't make good, one cent will be too high for them. So why question the ethics of charging 25 cents per share for Seyler-Humphrey when we might have sold it for 15 cents and still have made money; or of charging 15 cents for Manhattan Buffalo when we could have sold it at a profit for 10 cents? The public knows it is gambling. If people want to buy stocks where they won't lose all of their investment under any circumstances, they know they can buy Union Pacific, Pennsylvania Railroad or New York Central. The profits there, however, are limited, just like the losses. In the case of mining stocks, representing prospects under actual development, the public can lose or gain tremendously."