One day they received through a lawyer an offer of four thousand dollars for the even million shares of stock they had prepared to issue at a face value of five dollars a share. They were told that a wealthy young man was willing to take a four-thousand-dollar flier on the property, on the outside chance that it might develop ore. The deal was made. Soon after a well-known man was named as a part owner of the mine, which "promised" to enrich all those interested in it.
That was not the first time that the marketable value of a name that is known had been used to exploit a corporation. Any man of standing has many such offers.
The shares of stock that had been purchased for four cents each were peddled on the curb at fifty cents. Then they were advanced to sixty cents. Soon a "market"--so called--was made and the stock found a ready sale. Point by point it was advanced until it actually was eagerly sought by investors, who were not only willing but eager to pay four dollars a share for it.
Mr. Hungerford states in the foregoing: "This mine was capitalized by a number of men who dropped out after they convinced themselves that it would not pay." The statement is false if it refers to Ely Central, as I believe it does. The chief owners and organizers attempted to promote it through a New York Stock Exchange house on the New York Curb at above $7 per share, or at a valuation of more than $8,000,000 for the mine, but the bankers' panic of 1907-8 intervened, and for _that reason_ they quit. The stock sold in 1906 at above $7.50 a share on the New York Curb, two years before I became identified with it.
Mr. Hungerford says that one day these men _received through a lawyer AN OFFER OF $4,000 FOR A MILLION SHARES OF STOCK, and they sold_.
How cruelly false this statement is nobody can feel more than myself. The average price paid by my associates in hard money for the controlling interest in the 1,600,000 shares of capitalization, as already mentioned, was above 90 cents, or considerably more than one million dollars in all. An additional $600,000 or more was used to protect the market for the stock, making our cost, without adding a cent for promotion expenses, about $1.50 per share instead of four cents--more than $2,000,000 for the property and not $5,000.