The field is one devised by nature for the trickster. His success does not depend altogether on human gullibility; part of his argument rests on the conditions which surround the industry of mining, one which never can be free of extreme risk. All men know that gold is found far away, where living is high and means of transportation are scarce; that it costs large sums to find and dig it, and that such sums are more easily raised among the many than among the few. None of these attending features has weight to stop the capitalization of bona-fide enterprises. These latter are used as bait by men who have nothing bona-fide to offer, and who make their fattest profits out of their shallowest shafts.
THE "SUCKER LIST" IN WALL STREET
Methods vary among such fraudulent operators, but new victims continually are found. The "sucker list" of one firm in Wall Street numbers 110,000 names, selected as those of persons who will bite more than once at a mining scheme, and whose records show that they have so bitten. This operator proudly declares that the only way a sucker can get his name off that list is to die. In the reorganization of the firm of Douglas, Lacey & Co., of New York City, it was discovered that 20,000 persons had money invested in stocks of the company.
The best bait in this particular operation was a "trust fund" established for the benefit of stockholders. The proceeds of the better-paying mines were to be applied to pay dividends for those which were less successful. In this way, the various directors of the many Douglas-Lacey Companies explained, it was impossible for the investors to lose. But they did lose. The reorganization, intended to save some of the better properties, wiped out more than seventy per cent. of the small stockholders—widows, schoolteachers, stenographers, washwomen, scrubwomen—all who once had a dollar in the stocking.
Burr Brothers, Inc., of New York, used the effective bait of the instalment plan of payment. Their literature and advertising offered sudden wealth at twenty cents a share, payments to be in instalments, "the best twenty offers" to be accepted. It was pointed out that if one made one's weekly payment large enough to be included among the fortunate twenty, one could have a nice, clean certificate sent to one immediately, and pay for it at one's leisure. If you think the operators could not afford to do that, you are ignorant. There was an old negro woman in the South who often importuned her white friends for funds to build a certain somewhat mythical church. They asked her what she received for the time spent in collecting. "I has what I gits," was her frank response. She enunciated a great modern mining principle which has made fortunes in Denver, Butte, New York, Boston, and many other places where handsome lithographic work is done, and where advertising space can be bought in journals considered reputable.
NEW ENGLAND "DONE" BY AN INSANE MAN
Sometimes there are victims in enterprises of this sort where there probably was no deliberate intent to deceive or to defraud. Not long ago, in Boston, one Henry D. Reynolds, formerly president of the Reynolds Alaska Development Company, was brought before the United States Circuit Court on the charge of using the United States mails with intent to defraud. Three alienists are said to have declared him insane. In 1907 ex-Governor John G. Brady, of Alaska, endorsed Reynolds and his schemes, and is reported to have collected in New England about $450,000 for these Reynolds projects. Brady gave "lectures" and stereopticon exhibitions in New England churches. Reynolds took out an excursion of Boston and New England investors to Prince William Sound, at one time, and showed them the seacoast of Alaska, practically all of which he claimed to own. At Boulder Bay he took his party into a long tunnel, the face of which they were told was composed of solid copper ore. When they emerged into the garish light of day, each was given a bright copper nugget, said to have come from the mine.
ALASKA REYNOLDSIZED
Really, according to local report, these nuggets of native copper had been taken from sluice boxes on Chittitu Creek, 235 miles inland. Reynolds, so ran the story, had treated them with an acid bath to brighten them, knowing that bright bait is better. At any rate, the good, sober New Englanders went back home and sent him $300,000 more, which set him entirely "dippy," in local phrase.
Reynolds's scheme was to run all the barber shops, laundries, bars, and pretty much everything else on the Alaskan coast. A certain Sam Blum had a store and bank; Reynolds wanted it; and Blum, it is alleged, annexed $50,000 of the New England money as a forfeited first payment on his property. A steamship company, it was said, got $75,000 of money on a forfeit. So the good New England savings merrily disappeared, in one of the most spectacular farces ever known in Alaska; which latter is too good and valid and valuable a national possession to permit to be Reynoldsized, as it has been. Reynolds, in the belief of one who knew him well, was a combination of the ignorant enthusiast, the wild promoter, and the crazy man; and as for Brady, another Alaskan called him "nothing worse than an innocent old ninny." Yet, even with so sorry a mental equipment, these two took something like half a million out of conservative New England! The ease with which money can be raised for such enterprises by the deliberately fraudulent or the unintentionally insane continues one of the wonders of our civilization.