Goldfield had been the mining emporium—the security factory. New York was the recognized market center. Market handling had been my weak spot. I now had a chance to witness the performance of some past-masters in the art of market manipulation, and I tried to make the best of the opportunity.
I watched intently the daily sessions of the New York Curb. I was in and out of brokerage offices hourly. Nothing that transpired escaped me.
Within a month I heard enough and saw enough to convince me that, daring as were the operations of the mergerers and waterers of Goldfield Consolidated, in that they ballooned the price of their security at its inception some $29,000,000 (400 per cent.) above the accepted intrinsic worth and were able to get the public in at top prices, their activities were but amateurish when compared with the stock-market campaign in Nipissing, which was now transpiring on the New York Curb.
In the Nipissing campaign tens of millions of the public's money went glimmering, several great promoters' fortunes were reared as by magic, some big names and big reputations were tarnished, and dollars in $1,000,000 blocks were juggled like glass balls under the touch of sleight-of-hand performers.
AN ORGY IN MARKET MANIPULATION
This market melodrama was well staged. It had a sensational start-off, and action was at high tension every minute. The performance had covered a period of seven months when I arrived in New York, and was reaching its climax. It was a wild orgy in market-manipulation and money-fleecing that had no parallel in history from the early Comstock days up to and including Greenwater. As a mining-stock boom it was a dizzy, bewildering success—full of red fire and explosions to the last curtain climax.
W. B. Thompson, Montana mine promoter and money-getter; Captain Joseph R. Delamar, famed as a daring adventurer on land and sea, and recently a highly successful financier, mine-owner, stock-market operator and art collector; John Hays Hammond, mining engineer, promoter, politician and ambitious society leader; A. Chester Beatty, millionaire mining engineer, and the seven Guggenheim brothers, were in the all-star cast. Mr. Thompson, by reason of the fact that he was market manager, was most under the spotlight, although at times he was obscured by the others.
Mr. Thompson was a product of Butte, Montana. Early in the game he had learned the Wall Street lesson that "stocks are made to sell." Born and reared in Butte without the aid of a silver spoon, he had never been "in the money" before coming East. The great pay-streak in the East apparently looked better to him than the pay-streaks that some of his Butte neighbors had missed in their deep-mine operations. He was an ideal man for the Nipissing job, as subsequent events in his career thoroughly confirm. Of a school that believes money in hand to be worth more than mining certificates in the box, Mr. Thompson's route from Montana to Broad Street was via Boston, where he made his first visible stake by marketing stock in the Shannon group of mines.
When the Cobalt excitement was in its infancy Mr. Thompson took a run up to the camp. The Nipissing mine was about the best thing in sight. It was producing real silver. The company was owned by a little club consisting of E. P. Earle, specialist in rare metals, Captain Delamar, millionaire soldier of fortune, E. C. Converse, banker and steel magnate, Ambrose Monnell, R. M. Thompson, Joseph Wharton, since deceased, of Philadelphia, and Duncan Coulson, a rich Canadian lawyer. Considerable silver was being produced. The veins, however, were exceedingly narrow, not more than a few inches wide. It was impossible to block out ore to an extent that would warrant any opinion as to the real measure of the mine's riches. The gentlemen owners were not averse to giving Mr. Thompson an option on 100,000 shares of treasury stock of the 1,200,000 five-dollar shares ($6,000,000), at $2 a share, when he made the proposition, and another 100,000 shares at $2.50. Later, they sold him a call on 50,000 or 100,000 shares around $7. All of this happened in the Summer of 1906, six months before I reached New York and at a time when the country was giving indication of going mining-stock crazy, Nevada stocks having advanced on the New York Curb in the Goldfield boom hundreds per cent.
After the Goldfield boom had gained terrific headway, during the Fall of 1906, when Mohawk was climbing from 10 cents per share toward the $20 mark, which it reached during the climax, the Cobalt mining-stock excitement spread like wildfire. A sudden demand sprang up for Nipissing shares. Mr. Thompson, about this time, connected himself with the old established and conservative banking house of C. Shumacher & Company on Wall Street. The affiliation was calculated to give the promoter of Nipissing stock much standing. The move served well its purpose. The public grabbed at the shares. The price jumped to $4.50 in a jiffy. Mr. Thompson began to let go of stock after the $4 point was reached. He was making a killing, but fed out his optional stock very cautiously at the rate of about 5,000 shares daily, each day at an advance. By the time the price reached $7 Mr. Thompson got suspicious. There was something about the play he could not understand. He had not found it necessary to do much "laundry" work on the Curb market. Every time he offered stock it was lapped up silently and completely. Every time his brokers opened their mouths to sell the certificates they were gobbled.