BARON GRANT DEMANDS MORE TIME, THEREBY KNOCKING OUT OPTION FOR
MINE THAT SOON DEVELOPED BONANZA.
_Exploiter Breaks His Promise and Litigation Follows; Public Fooled
Into Buying Worthless Securities._
I returned to London as soon as my business was arranged in San
Francisco. The boom times were still on. Speculation was running mad. I
was a trifle chagrined at losing the best property I had bonded through
the stubbornness of Baron Grant. This was the famous Raymond and Ely
mine. By the payment of $10,000 I had secured an option on this famous
property for sixty days for $900,000. I had cabled Grant about Raymond
and Ely, in order to hasten arrangements, as the time was short. He
answered that nothing short of 90 days’ option should be considered.
I tried to secure an extension, but was turned down. While we were
see-sawing over this and time was slipping by, the company offered
to return my $10,000 and let the option drop. Under the conditions,
I accepted the tender. Just a week later the Raymond and Ely bonanza
was uncovered, yielding millions in dividends. After that no one could
purchase it at any price. Whether the owners really knew anything about
this tremendous “strike” when they so generously tendered me the
return of my $10,000 deposit the reader can guess as well as I.
But that was a small matter, I had so many shots in my locker. Among
these was the famous North Bloomfield hydraulic mine. I had an option
on it for $600,000. In my judgment, which afterwards came true, it was
worth at least five times as much. One of the principal owners, Samuel
F. Butterworth, followed me to England. Talking of Baron Grant and his
power of fascination, I introduced him to Butterworth, who was an able
man, but cold and unemotional as fate, and after a ten minutes’ talk
the Baron had him spellbound. “There never was a human being like him,”
said Butterworth as we retired.
Baron Grant was measurably glad to see me, but not so cordial as
the circumstances led me to expect. I spoke to him about the North
Bloomfield mine and my desire to have the proposition laid before the
public without unnecessary delay, but he seemed singularly backward. At
last the cat escaped from the bag. He had violated his written contract
by agreeing to bring out another mining exploitation, ahead of mine.
But my indignation at his absolute lack of faith was nothing compared
with my astonishment--almost horror--when he told me that the property
he proposed to unload on the British public for a million pounds
sterling was none other than the Emma mine.
I had no desire to continue business relations with a man who had
shown himself so utterly without faith; but I was at some pains to
explain the folly of his project from a mere practical standpoint,
setting common honesty to one side. I told Baron Grant that I was
familiar with the Emma mine, that Mr. Ralston and myself had recently
held an option on the property for $350,000; that I had personally
inspected the property and found it a nearly worked out “kidney”; that
the principal owner had later offered it to me for $250,000; that
I considered it dear at any price. In conclusion, I urged that to
promote such a fraudulent concern for a huge sum would not only cause a
scandal of far-reaching proportions, but would also ruin the market for
American securities for many years to come.
Baron Grant listened coldly. He said he had every confidence in the
Emma mine and those behind it. That the proposition had been brought to
England by Trenor W. Park, a New York financier, once of California;
that it was vouched for by such men of prominence as Senator William M.
Stewart of Nevada and by the American Minister, General Robert Schenck.
He had no fear of a mine guaranteed by such weighty names. As for my
own properties, he said he would take them up when his convenience
suited. Otherwise, he possessed the power to prevent any other interest
floating them. The interview ended in a violent quarrel.
Even when I demanded my share of the profits in the Mineral Hill deal,
Baron Grant held me off with specious promises of speedy settlement,
then flatly refused to settle at all. By this time we were sworn
enemies. I brought an action for the recovery of a hundred and fifty
thousand pounds, $750,000 of our money. The Baron harassed me with the
usual legal impediments, but in the end, I may say here, that I gained
a judgment and what was more important still, collected the amount sued
for in full.
I sought new outlets for my mining properties, among the highest
financial circles of England, not by means of stock exchange
exploitation but by sales to intelligent and provident investors. The
North Bloomfield mine was well and favorably known in England. One of
its owners was Tom Bell, an English resident of San Francisco, who cut
a large figure in the old days. I had actually arranged the complete
details of the sale of this property for four hundred thousand pounds.
A meeting was held to confirm the transaction and pay in half the
purchase price, when an unfortunate remark of Mr. Butterworth caused
a halt. He said, doubtless in good faith, that no English manager was
capable of handling a California hydraulic mine. But this so offended
some of the principal English investors that they quietly withdrew.
In the meanwhile, the Emma mine promotion was brought out with a grand
blare of trumpets. Immense sums were spent in wholesale advertising.
The most dazzling and seductive literature was scattered broadcast
through the length and breadth of the United Kingdom. Its fabulous
wealth was described in the vivid language that fires the speculative
spirit latent in every man and in most women. Special stress was laid
on the eminent station of the American backers. I have seen much lurid
get-rich-quick literature of our own, at a time when the industry of
plucking the public was unchecked and in full bloom, but nothing that
took rank with the effrontery employed to bolster up this brazen fraud.
Of course, the promotion was a huge success. When the subscription
books were opened a small river of gold poured in from applicants for
shares. The issue was enormously over-subscribed. Baron Grant and
his associates selected, as far as possible, the smaller class of
investors. These are less able to roar in an effective manner when the
inevitable day of reckoning comes for every crooked deal.
The Emma mine was regularly listed on the London stock exchange,
alongside of reputable and conservative companies. It became the
feature of a tremendous gamble. In the hands of expert market
manipulators, the stock ebbed and flowed like the tide. Stories of
fabulous dividends were passed from mouth to mouth and the stock soared
from one high level to another till ten pound shares touched thirty-two
pounds. This absolutely valueless and exhausted property had a paper
value of $16,000,000. When it shrank under profit taking and selling
pressure, reports of new strikes, vast ore bodies uncovered, sent the
prices booming once more. Had it not been for the utter heartlessness
of the thing, one could almost admire the skill with which a huge
deception was organized and kept alive.
Of course, I shouted “murder” from the housetops. I publicly denounced
the Emma mine as an exhausted, worthless hole in the ground. It was
like a voice raised in the wilderness. No one paid the least attention
to my warnings in the midst of the bawling crowd. I was classified
either as a general calamity howler or as the leader of a “bear”
faction, anxious to organize a “bear” raid and interrupt the wave of
prosperity. At length, to gain a larger audience and put my statements
in responsible form, I made an effort in a new field of endeavor by
founding the London Stock Exchange Review.