RAWHIDE
Because Rawhide, the new Nevada gold camp, was born during the
financial crisis of 1907, I couldn't see any future ahead of it from
the promoter's coign of vantage--not "through a pair of
field-glasses." It requires capital to develop likely-looking gold
"prospects" into dividend-paying mines, and I could not imagine where
the money was going to come from. Eastern securities markets were in
the doldrums. Time money commanded a big premium. Prices for all
descriptions of mining stocks had flattened out to almost nothing.
Investors were at their wits' end to protect commitments already made.
Financiers everywhere were depressed. A revulsion of sentiment toward
speculation had set in, seemingly for keeps. Only a hair-brained
enthusiast of the wild-eyed order could hope at such a time possibly to
succeed in the marketing of new mining issues.
A financial panic has no terrors, however, for gold-seekers. The lure
of gold is irresistible. Money stringency serves only to strengthen the
natural incentive. By the first week in January, 1908, fully 2,000
people were reported to be in Rawhide. At the end of January the
population had grown to 3,000.
The camp easily held the center of the mining stage in Nevada.
Many of the Rawhide pioneers hailed from Tonopah and Goldfield. Without
exception the opinion of these veterans appeared to be that the surface
showings of the new district excelled those of either of the older
camps. Never before in the history of mining in the West had there been
discovered a quartz deposit so seemingly rich in the yellow metal at or
near the surface which at the same time embraced so large an area of
auriferous mineralization. Goldfield, at the same early age, had been a
mere collection of prospectors' tents, while Rawhide was a thriving,
bustling, populous camp with more than a hundred leasing outfits
conducting systematic mining operations.
News was brought to Reno of a phenomenal strike made on Grutt Hill in
Rawhide. Specimen rock taken from a seam of ore assayed $300,000 to the
ton. The Kearns lease on Balloon Hill reported 15 feet of shipping ore
on the 65-foot level which assayed from $300 to $500 to the ton.
There was full verification of this. Also regular shipments were being
made to the Goldfield reduction works.
Samples of rock were received in town that were studded with free gold.
I was thrilled. Statements made by camp "boosters" that a part of
Balloon Hill was "gold with a little rock in it," were not
exaggerations, judging from the specimens that were placed in my
possession.
My apathy began to melt away. Against my earlier judgment, I now began
to change my attitude.
The camp looked like "the real thing," panic or no panic.
Why should not the American public, even in these tough financial
times, enthuse about a gold camp with possibilities for money-making
such as are offered here, I asked myself. Don't drowning men grasp at
straws? Is it not the habit of horse-race players when they lose five
races in succession to make a plunge bet on the sixth with a view to
getting out even? This panic had impoverished hundreds of thousands.
What more natural than that those who were hit hard should now fall
over one another to get in on the good things of Rawhide? If the camp
makes good, I reasoned, in the same measure that Goldfield did, early
investors will roll up millions in profits.
I visited the camp. What I saw electrified me. Soon I was under the
magic spell.
REAL GOLD AT RAWHIDE
Half a day's tramp over the hills seemed sufficient to convince anybody
that the best of the practical miners of Nevada had put the stamp of
their approval on the district. Most of the hundred or more operating
leases of Rawhide were owned by these hard-rock miners. More than half
a dozen surface openings on Grutt Hill showed the presence of masses of
gold-studded quartz. At the intersection of Rawhide's two principal
thoroughfares a round of shots in a bold quartz outcrop revealed
gold-silver ore that assayed $2,700 a ton. A gold beribboned dyke of
quartz-rhyolite struck boldly through Grutt Hill's towering peak. I
walked along its strike and knocked off, with an ordinary prospector's
pick, samples worth $2 to $5 a pound.
Across Stingaree Gulch to the south Balloon Hill's rugged hog-back
formed a connection link between Grutt and Consolidated hills. The
Kearns Nos. 1 and 2 leases on Balloon Hill were scenes of strikes of
such extraordinary richness that they alone would have started a
stampede in Alaska. The Murray lease on Consolidated Hill was rated as
a veritable bonanza. There I saw quartz that was fully one-third gold.
Along the southern slope of Hooligan Hill several sets of leasers were
mining ore so rich that guards were maintained through the night to
prevent loss from theft. At the Alexander lease on Hooligan Hill the
miners were crushing the richer quartz from their shaft and washing out
gold to the value of $20 a pan.
These were the three principal centers of activity, but they by no
means embraced the productive area of the district. Tall, skeleton-like
gallows-frames dotted the landscape for miles in every direction. The
soughing of gasoline engines suggested the breathing of some spectral
Titan in the throes of Herculean effort. I was forcefully impressed,
too, with the class of miners at work.
It seemed to me there was no longer any room for cavil as to the
fortune-making possibilities of investors who put their money into the
camp. Less than a half year old, Rawhide loomed up as the most active
mining region I had ever seen at anything like the same age.
It required nearly three years for Goldfield to make as good a showing,
I reasoned.
During my earlier efforts at press-agenting Southern Nevada's mining
camps I had to conjure in my mind's eye what the reality would be if
half the hopes of camp enthusiasts were fulfilled. Here was apparently
a fulfillment rather than a promise. At the threshold of the first
stage of its development era Rawhide could boast of more actual
producers and nearly as many operating properties as Goldfield could
claim at the age of three years.
I recalled that Cripple Creek had been panic-born but had lived through
the acute period of 1893-96 to take rank with the greatest gold camps
of the world.
I was more than convinced. Effervescent enthusiasm succeeded my earlier
skepticism. History is about to repeat the record of Cripple Creek, I
concluded.
THE RAWHIDE COALITION MINES COMPANY
Grutt Hill, Hooligan Hill, a part of Balloon Hill, and the intervening
ground, forming a compact group of eight claims, 160 acres, were owned
by a partnership of eight prospectors. The area formed the heart and
backbone of the whole mining district.
I soon "tied up" this property for Nat. C. Goodwin & Company of Reno,
with whom I was identified. A company, with 3,000,000 shares of the par
value of $1 a share, was incorporated to take title. It was styled the
Rawhide Coalition Mines Company.
Of its entire capitalization, 750,000 shares were turned into the
treasury of the Rawhide Coalition Mines Company. Nat C. Goodwin &
Company became agents for the sale of treasury stock, and were given an
option by the company on 250,000 shares, to net the treasury $57,500
for purposes of administration and mine development. The Goodwin
company also purchased 1,850,000 shares of the 2,250,000 shares of
ownership stock, amounting to $443,500 more, or at the rate of 23.3
cents per share plus a commission of $12,500 to be paid to a
go-between.
The ownership stock that was retained by the original owners, and the
residue of treasury stock, amounting in all to 900,000 shares, were
placed in pool.
When I made this deal the cash in bank of Nat. C. Goodwin & Company
amounted to about $15,000. It was up to me to finance the undertaking.
I did.
The contract I made called for only $10,000 in cash and the balance on
time payments. Nat C. Goodwin & Company didn't borrow money from any
bank or individual, nor did anybody identified with the concern tax his
personal resources to the extent of a single dollar to go through with
the deal. The money was raised, first for the Coalition's treasury and
later for the vendors, by appealing directly to the speculative
instinct of the American investing public. The public, too, paid the
expense that was incurred in reaching them. It did this by paying Nat
C. Goodwin & Company an advance in price on Coalition stock purchases,
over and above the cost price.
Nat. C. Goodwin & Company had agreed to net a fraction more than 23
cents per share to both the treasury and the vendors without any
deductions whatsoever. All of the advertising expense and other outlays
of promotion, it was stipulated, must be borne by Nat. C. Goodwin &
Company and none by the mining corporation.
What was the system? How was it done?
A RACE OF GAMBLERS
Prior to the birth of Rawhide I had for seven years catered to the
speculative (gambling) instinct of the American public, chiefly in
building mining camps and financing mining enterprises. I now realized
that in order to make a success of the undertaking before me, namely,
to put the new camp of Rawhide on the investment map, I must again
appeal loudly to the country's gambling instinct.
Maybe you think, dear reader, that a man who caters to the gambling
instinct of his fellow men, be his intentions honest or dishonest, is a
highly immoral person. Is he?
Do you know that the gambling instinct is responsible for the wonderful
growth of the mining industry in the United States? Would you believe
that without the gambling instinct the development of the great natural
resources of this country would be almost impossible?
With rare exceptions every successful mining enterprise in the United
States has been financed in the past by appealing directly to the
gambling instinct. In the decade antedating this year considerably more
than a billion dollars was raised and invested in this way.
Conservative investors who are satisfied with from three to six per
cent. on their money do not buy mines or mining stocks. Speculators
(gamblers) who are willing to risk part of their fortune in the hope of
gaining fivefold or more in a year or a few years--these are the kind
who invest in mines and mining stocks.
There are legions of these. Not less than 500,000 men and women in the
United States, according to the best statistical information
obtainable, are stockholders of mining companies.
In fact, the gambling instinct finds employment in the mining industry
long before a property has reached the stage where it can be classed as
even a prospect worthy of exploration. The prospector who follows his
burro into the mountain fastnesses or across the desert wastes often
gambles his very life against the success of his search; those who
grub-stake him gamble their money.
The gambling instinct seems bound to continue to play an important rôle
in the mining industry for all time, or until either the
fortune-hunting instincts of man are eradicated or all the treasures of
the world shall have been mined.
Now, if the practice of catering to the gambling instinct is baneful,
I'm a malefactor. So, too, would then be such lofty-pinnacled
financiers as Messrs. Rothschild, Rockefeller, Morgan, the Guggenheims
and others. My own thought is that it is _custom_ and the times
which are responsible for the maintenance of the great game, and not
individuals.
The truth is, we are a race of gamblers and _we allow the captains of
industry to deal the game for us_.
Next to money and political power, publicity is recognized by all
"doers" as the most powerful lever to accomplish big things. Not
infrequently publicity will accomplish what neither money nor political
power can. Generally, publicity can be secured and controlled by either
money or political power.
When Rawhide was born I had neither money nor political power. The camp
needed publicity. I had nothing to secure publicity with but my wit. I
promptly requisitioned what wit I had, and used all of it.
There is an important difference between owning a series of excellent
gold-mine prospects, which have tremendous speculative possibilities,
and the public recognizing them to be such. It is one thing for a
manufacturer to be himself assured that his article is a better product
for the money than that of his competitor. It is another thing for the
consumer to be convinced. Therein lies the value of organized
publicity.
To focus the attention of the great American investing public on the
camp of Rawhide was the proposition before me. How was this to be
accomplished? Display advertising in the newspapers is costly and
requires large capital; the purchase of reading notices in publications
which accept that class of business, even more so.
One major fact stood out from my early experience as a publicity agent
in Goldfield. Few news editors have the heart to consign good copy to
the waste-paper basket, particularly if it contains nothing which might
cause a come-back.
I resolved to "press-agent" the camp.