All Goldfield fell for this, and the camp went broke as a result.
Within eighteen months thereafter Goldfield Consolidated sold down to $3.50 in the markets, and margin-traders and borrowers who had put up the stock as collateral to purchase more were butchered. Loans were foreclosed by the bank as rapidly as margins were exhausted. The carnage was awful.
It must be evident that Wingfield and Nixon, both of whom became multimillionaires as the result of their mining-stock operations in Goldfield, were directly and indirectly important factors in the loss by the public of $300,000,000, as set forth above. It is admitted that less than $7,000,000 worth of ore had been developed as a reserve at the time $35,000,000 worth of stock in the merger was issued and a market manufactured to dispose of the stock at this fictitious price-level. It is not of particular interest that Goldfield Consolidated, by reason of sensationally rich mine developments at depth, has since given promise of returning to stockholders an amount almost equal to par for their shares, and that it now appears that those who were able to weather the intervening declines may in the end be out only the interest on their money.
This fact stands out: Although Goldfield Consolidated owned at the outset a bonanza gold mine, stockholders had just two chances. They could break even or lose—break even on their investment if the mine made good in a sensational way, which was a big gamble at the time, or lose if the mine didn't. They could not win.
Mr. Nixon was a United States Senator from Nevada. He was also president of the Nixon National Bank of Reno, Nevada. He held both of these positions at the time the merger was made, and it was largely because of Mr. Nixon's political and financial position that the daring ballooning market operations, which were staged as a curtain-raiser for the merger, proved so successful.
In the Nevada Mining News of May 25, 1907, circulation 28,000, an interview appeared with United States Senator Nixon of Nevada, vouched for as follows:
The manuscript of the interview was submitted to, and approved by, the Senator. Unchanged by one jot or tittle, it is printed just as it came from his hands. Even now the Senator holds a carbon of the original manuscript and may brand us with it if we have broken the faith we pledged.
I quote from the Senator's interview, as it appeared in that issue of the Nevada Mining News:
"What do you estimate the ultimate earnings of Goldfield Consolidated will be?" was asked.
"Consolidated will be a bigger producer, I should say, three or four years from now than it will be one year from now," Senator Nixon replied, "and I believe I am conservative when I say that the property will be eventually earning $1,000,000 net monthly."