On arrival at Wonder, I found my former Goldfield partner, L. M. Sullivan, on the ground. He entreated me to allow him to cut in on any deal I made. A bargain was struck. He agreed to advance all the money and I was to receive half of the profits for my work. The corporation of Sullivan & Rice was formed. We purchased the Rich Gulch group of claims, a likely piece of ground with a well defined ledge, and incorporated the Rich Gulch Wonder Mining Company. A company with the usual million-share capitalization was formed to operate the property. A high-class directorate was secured. T. F. Dunnaway, vice-president and general manager of the Nevada, California & Oregon Railroad, accepted the presidency. Hon. John Sparks, Governor of Nevada, became first vice-president. U. S. Webb, Attorney General of California, accepted the second vice-presidency. D. B. Boyd, for twenty-five years successively Treasurer of Washoe County, Nevada, was made treasurer.
The first advertised offering of treasury stock of the Rich Gulch Wonder carried the names of forty leading mining-stock brokers, situated in various cities stretching from New York to Honolulu, who had signified over their signatures their willingness to undertake the sale of treasury stock at 25 cents per share on a basis of 20 per cent. commission. The first thousand shares of treasury stock at 25 cents was sold to Superintendent McDaniel of the Nevada Wonder mine. This convinced us that we had a good "prospect."
I had my doubts about the successful promotion of any Nevada mining company at this period, because of the terrific slump which was transpiring in Goldfield issues and also because of the smack in the face that mining-stock investors had just received in Nipissing. It was my idea that if the Rich Gulch Wonder made any money for us the cashing would have to be delayed until mills were erected and the property became a producer. I was willing to go ahead on that basis.
The sale of treasury stock was slow, but sufficient was disposed of to warrant the expense for mine development of at least $2,000 a month for six months, and that appeared far enough to provide for in advance.
Pending the making good of this proposition in a financial way, I determined I would help finance a newspaper publication at Reno which would give to mining-stock speculators an unbiased statement of mining and market conditions as they existed. In the mining camps it was considered tantamount to financial suicide for the home publication to reflect on the merits of any locally owned property. Strictures were looked upon as "knocks," and "knockers" are taboo in mining camps. Moreover, mining-camp papers could hardly make both ends meet at the time without support from inside interests, and unprejudiced statements of fact that were detrimental to a local property could hardly be expected.
Merrill A. Teague was made editor of the new publication, which was called the Nevada Mining News. Mr. Teague had just blown into Reno from Goldfield where he had been connected with the Nevada Mines News Bureau, a daily market sheet. Before coming to Nevada he had served in an editorial capacity on the Baltimore American and the Philadelphia North American. Mr. Teague is the possessor of a facile pen. At $50 a week, which was his stipend at the beginning, I was convinced that the Nevada Mining News had a cheap editor. When news was scarce he could write more about nothing than any man I ever met before. Incidentally, he could go further without finding a stopping place in a crusade than any man I had ever bumped up against. That was his drawback. However, compared with the work of other newspaper men then employed in Nevada, his stuff was in a class by itself and was commercially very valuable.
TEAGUE ATTACKS SENATOR NIXON
Mr. Teague was on the job just a week when he cut loose with an attack on United States Senator George S. Nixon of Nevada in a front-page story headed "Goldfield in the Grasp of Wall Street Sharks." The article declared that Senator Nixon, needing $1,000,000 to conclude the merger plans of the Goldfield Consolidated, had got it through B. M. (Berney) Baruch of the New York Stock Exchange, factotum of Thomas F. Ryan, at terrible cost. The loan was made at a time when Goldfield Consolidated was selling around $10 per share. In consideration for the loan, Senator Nixon, acting for the company, gave Mr. Baruch an option on 1,000,000 shares of treasury stock of the Goldfield Consolidated at $7.75 per share. At the time Mr. Teague commenced his onslaught Goldfield Consolidated shares had slumped from $10 to $7.50. Mr. Teague alleged that the market on the stock was being juggled and speculators were being milked. Mr. Baruch, he asserted, had sold the stock down to $7.50 per share on the strength of his option, and was now tempted to break the market, sell the stock short and cover all at much lower prices.
Within two weeks after the publication of Mr. Teague's exposé of the terms of the outstanding option to Mr. Baruch, Goldfield Consolidated shares dropped to under $6. The story evidently had its effect.
The issue of the paper which chronicled the break to $6 contained an editorial headed "Nixon in the Rôle of Brutus." It demanded of Senator Nixon that he stand behind the stock and support the market, and also called upon him to declare the payment of dividends which he had promised to stockholders in his annual report dated two months prior.