Fix the responsibility here if you can. The job is not easy. Let me attempt it. The buccaneers who took Greenwater & Death Valley down to New York and allowed the public to subscribe for it with the name of Charles M. Schwab as a lure, at a valuation for the property of more than $3,000,000, and then ballooned the price on the curb until the shares sold at a valuation of $16,500,000 for the property, without an assured mining success in sight in the entire camp—these men, in my opinion, were criminally responsible. They have never been called to account.
Members of the New York Stock Exchange who aided and abetted them by lending their names to the transaction, and Charles M. Schwab, who permitted the use of his name and that of his brother-in-law, are morally responsible. Not for an instant do I entertain the thought that the Stock Exchange crowd and Mr. Schwab realized that the mines of the company were absolutely valueless, but I do maintain that men of their standing and prestige have opportunities which men of smaller caliber do not enjoy and that their conduct for this reason was reprehensible to an extreme.
THE SHAME AND THE BLAME
I CITE the instance of the Sullivan Trust Company "falling" for Greenwater, after hesitating about embarking on the enterprise for weeks, and I am convinced that others fell the same way. The Sullivan Trust Company did not touch a Greenwater property until its clients and its clientele among the brokers throughout the Union had burned up the wires with requests for a Greenwater promotion, and when it did finally "fall" it lost its own money, the only other sufferers being a handful of investors who at the tail-end of the boom subscribed for a comparatively small block of treasury stock.
Not all of the promoters "fell" innocently, however. There were half-baked promoters and mining-stock brokers in almost every city in the Union who had witnessed the enhancement in values during the Goldfield boom, and whose palms had itched for the "long green" that for so long came the way of men on the ground. These, at the first signal that the Greenwater boom was on, with Charles M. Schwab in the saddle, lost no time in annexing ground in the district with the single view of incorporating companies and retailing the stock to the public at thousands of per cent. profit.
The Greenwater mining-boom fiasco stands in a class by itself as an example of mining-stock pitfalls. The only Greenwater stock which at this time has a market quotation is Greenwater Mines & Smelters, which reflects the true state of the public mind regarding all Greenwaters by actually selling at a valuation of less than the amount of money in the company's treasury—6 cents per share on an outstanding issue of 3,000,000 shares—there being $189,000 in the treasury along with an I.O.U. of C. S. Minzesheimer & Company, the "busted" New York Stock Exchange house, for $71,000, of which the company will realize 27 cents on the dollar through the receiver.
CHAPTER V
On the Eve of the Great Goldfield Smash
It was early in November, 1906. Indian Summer held Goldfield in its soft embrace. Nature wore that golden livery which one always associates with the idea of abundance. The mines of the district were being gutted of their treasures at the rate of $1,000,000 a month. Under the high pressure of the short-term leasing system new high records of production were being made. The population was 15,000. Bank deposits totaled $15,000,000. Real estate on Main Street commanded $1,000 a front foot. The streets were full of people. Every one had money.
In years gone by men had died of thirst on that very spot. Three years before there were no mines and the population numbered only a corporal's guard. The transformation was complete. Within three years the dreams of the lusty trail-blazers, who had braved the perils of the desert to locate the district, had become a towering reality. The camp, which two years before was dubbed by financial writers of the press as a "raw prospect" and a "haven for wildcatters and gamblers," had developed bonanza proportions. The early boast of Goldfield's press bureau, that Goldfield would prove to be the greatest gold camp in the United States, was an accomplished fact.
Listed Goldfield mining issues showed an enhancement in the markets of nearly $150,000,000. Stocks of neighboring camps had increased in market value $50,000,000 more. The camp rode complacently on the crest of the big boom, than which history chronicles no greater since the famous old days of Mackay, Fair, Flood and O'Brien on the Comstock.