In the midst of the mêlée the Scheftels company tendered a Stock Exchange house of great prominence, which had loaned it for the account of a Salt Lake firm of brokers $12,500 on 50,000 shares of Rawhide Coalition, the money to take up the loan. A representative of the Stock Exchange house sheepishly stated that his firm had loaned part of the pledged stock to out-of-town brokers. He asked for time. Under threat of dire consequences the Stock Exchange firm bought stock back from us in the open market that afternoon to supply the deficiency, and then made delivery of this stock back to us in lieu of that which they had parted with. It had been specifically stipulated by the Scheftels company when the loan was made that the certificates must be held intact and that the stock must not be loaned out or sold while the money loan was in force.
This experience was repeated frequently during the Scheftels career on the Curb. It cost B. H. Scheftels & Company more than one million dollars, during the nineteen months of its existence, in giving loyal market support, in times of "professional" attack, to the stocks it had fathered or promoted and felt moral responsibility for.
Time and again the Scheftels company found among stocks delivered to it, against purchases made in the open market, the identical certificates it had pledged with loan-brokers as collateral for loans, and which had been hypothecated by it with the specific proviso that the certificates were not to be used. It opened our eyes to one of the most commonplace practices, not only on the Curb, but also on the Stock Exchange. Hardly a failure occurs on any of the Exchanges or on the Curb that does not reveal customers' certificates, which were originally pledged with the understanding that they were not to be "used," in the strong-boxes of others.
The first grievous offense of the publicity forces of the Scheftels corporation against Wall Street's "Oh-let-us-alone" promotion combine was a wallop in April and May, 1909, through the Scheftels market literature, at Nevada-Utah.
The combination which owned control took with bad grace the strictures on the property. We heard an awful underground roar. At that time the price of Nevada-Utah stock was around $3. The Scheftels Market Letter said that there was probably not 30 cents of share value behind the property. The price immediately began to crumble. It has been tobogganing ever since. The stock at the beginning of September of this year was quoted at 37-1/2 to 50 cents.