Ben Bryan, the active member of this firm, was in Goldfield at the time. He asked as to our finances. There was present Cashier J. L. Lindsey of the State Bank & Trust Company.
"How much would your bank loan the Sullivan Trust Company on its unindorsed paper and at a moment's notice?" I asked Mr. Lindsey.
"A quarter of a million or more," answered Mr. Lindsey.
This apparently satisfied Mr. Bryan.
Our rating in Bradstreet's and Dun's was "AA1." A private statement issued by Bradstreet was to the effect that while our rating was only $1,000,000 and we claimed a capital and surplus of only $1,000,000 at the time the rating was given, it was believed in Goldfield that we were worth much more, and that we had actually understated our resources because we considered it bad policy to divulge the great profits in the promotion business.
By December 15 the condition of the Sullivan Trust Company had become about as follows:
Our $3,000,000 surplus had been reduced to $2,000,000 and all of this $2,000,000, plus the loss, was represented by our own bought-back stocks. We had no money, except about $50,000, remaining of the $300,000 borrowed from the State Bank & Trust Company. We were committed in excess of this $50,000 to brokers for stocks in transit, but by the "crossing" process we were able to maintain a chain that kept intact our reduced cash balance. We figured that a fresh loan of $300,000, additional to the $300,000 already obtained from the State Bank & Trust Company, would enable us to take up all of our paper and to discontinue the "cross" trades. We promptly arranged for the loan, which Cashier Lindsey of the State Bank & Trust Company informed us would be immediately credited to our account whenever we required the money. Interest charges were at the rate of 1 per cent. a month in the camp at that time, and for that reason I did not ask that we be at once credited with the amount. I sent over to the State Bank & Trust Company another big batch of stocks, to be held as collateral against the promised loan, and got a receipt for it stating that it was accepted as collateral on our "open loan" account.
The market in Sullivan stocks had now steadied itself and it appeared that it would be impossible for any further selling of consequence to take place. We had bought back in the open market fully 50 per cent. of all the stocks promoted by the trust company. Distribution of the stocks of our early promotions had originally taken place in such a broad way that it now appeared as if selling must necessarily become scattered. We felt somewhat crippled, but in no danger, and were "still in the ring."
DOWN WITH THE SULLIVAN TRUST COMPANY
By this time I was "all in" physically. I had a cyst, of fifteen years' growth, on the back of my head. It had become infected. I was threatened with blood-poisoning. I suffered much pain. I had been on the desert for nearly three years, without leaving it for a day. My associates insisted that I go to Los Angeles immediately for treatment and a rest. Believing that the trust company was secure, I made preparations to go. Before leaving I busied myself with the preparation of a dozen full-page reading-matter advertisements on Sullivan properties, which the Salt Lake Tribune and Salt Lake Herald had contracted to publish in their New Year's Day editions. These are an annual feature of those newspapers. I decided to "make" Salt Lake on my return trip from Los Angeles and be there on New Year's Day with our mailing-list, to superintend the mailing of the papers to all stockholders in Sullivan properties. On account of the great value which we attached to the mailing-list, I would not trust anybody but myself with the job. I spent Christmas in Los Angeles and arrived in Salt Lake on New Year's Day, ready for work.