"But suppose the properties don't make good?" I queried.
He answered: "It is not a case of excessive optimism for one to expect that Manhattan properties will make into mines, in the presence of such wonderful surface showings; and so long as we are not knowingly guilty of deception, no harm is done. If the Manhattan stocks we have promoted make good, $5 will be a reasonable price for them, and if they don't make good, one cent will be too high for them. So why question the ethics of charging 25 cents per share for Seyler-Humphrey when we might have sold it for 15 cents and still have made money; or of charging 15 cents for Manhattan Buffalo when we could have sold it at a profit for 10 cents? The public knows it is gambling. If people want to buy stocks where they won't lose all of their investment under any circumstances, they know they can buy Union Pacific, Pennsylvania Railroad or New York Central. The profits there, however, are limited, just like the losses. In the case of mining stocks, representing prospects under actual development, the public can lose or gain tremendously."
Mr. Elliott, who confessed to me that he often played the horse-races when in San Francisco, then wrote out a list of stocks and prices, representing what he said was a "book" on stocks, comparable to a gambler's book on the horse-races, reading substantially as follows:
Union Pacific $165.00 6 to 5 Reading 155.00 8 to 5 Missouri Pacific 56.00 2 to 1 Erie 28.00 3 to 1 Seyler-Humphrey .25 20 to 1 Manhattan Buffalo .15 30 to 1 Manhattan Combination .10 50 to 1
"There," said Mr. Elliott, "you have the different prices on railroad and mining securities with their chances of winning for the speculator marked against them. When a man goes to a horse-race and plays the favorite, he does exactly what the man does who gives his broker an order to buy Union Pacific for him at current quotations. It is about 6 to 5 against the investment making a profit over current quotations on any given day, although the investor will hardly gain 6 for his 5 if the stock enjoys its highest probable advance. It is about 20 to 1 against the man buying Seyler-Humphrey making money, but he will gain 20 for his one if the mine proves to be a bonanza. However, the rail is an investment and the mining a speculation."