did. His enemies go so far as to allege that he, his brother, and his

brother-in-law, Dr. M. R. Ward, made millions out of the public.

I have an opinion, and I may be allowed to express it. Mr. Schwab, at the time he became a promoter of Nevada mines, was an expert steelmaker. He knew little or nothing about silver, gold and copper mines. The fact that friends in Philadelphia, who knew as little about the game as he did, had made a fortune in Tonopah (on the advice of a man who did know) should not have influenced him. Because the Mizpah mine at Tonopah, promoted by Oscar A. Turner as the Tonopah Mining Company, had made good in a phenomenal way, Pennsylvania stockholders had rolled up fabulous profits in the venture. Under this hypnotism Mr. Schwab "fell" for Tonopah Extension.

Later, when Tonopah Extension showed a market enhancement of more than $16,000,000, Mr. Schwab was in an ideal frame of mind to succumb to Montgomery-Shoshone.

And when Montgomery-Shoshone in the Bullfrog boom showed a market enhancement of $8,000,000, it did not take much argument to get him into Greenwater, another "bloomer," which is described further on.

Market profits were evidently alluring to Mr. Schwab. He failed to realize that his own great name was in large measure responsible for the rise in price of his securities.

Sam C. Dunham has informed me that Mr. Schwab told him he refunded to his personal friends in Pittsburg, who subscribed for Montgomery-Shoshone stock on his recommendation, between $2,000,000 and $3,000,000. This ought to be convincing that Mr. Schwab was guiltless of any intent to profit at the expense of others.

Mr. Schwab's lack of caution, however, is instructive to the losing speculator. It furnishes a startling example of the danger in banking alone on an honored name for the success of an enterprise, and it also drives home the truth of the adage, "Every shoemaker should stick to his last."

Incidentally, Mr. Schwab's mining career points another moral. It is this: Don't think, Mr. Speculator, because a promoter represents the chances of profit-making in a mining enterprise to be enormous, and you later find his expectations are not realized, that the promoter is _ipso facto_ a crook. Big financiers are apt to make mistakes and so are little ones. Undoubtedly grave misrepresentations are made every day, and insidious methods are used to beguile you into forming a higher opinion regarding the merit of various securities than is warranted by the facts. But mine promoters are only human, and honest ones not infrequently are carried away by their own enthusiasm and themselves lose their all in the same venture in which they induce you to participate.

WHY THE BOTTOM FELL OUT

When Montgomery-Shoshone was enjoying its market hey-day the Bullfrog Gold Bar Mining Company was promoted at around 15 cents a share on the usual million-share capitalization. A year later the price jumped to $2.65 on the San Francisco Stock Exchange, and the stock was widely distributed among investors. Recently the company was in the sheriff's hands. The biggest losers in this venture were Alabama people, who had great confidence in the promoters.

Other Bullfrog derelicts in which the public lost vast sums of money were Gibraltar, Bullfrog Steinway, Shoshone National Bank, Bullfrog Homestake, Bullfrog Extension, Denver Rush Extension, Mayflower, Four Aces, Golden Scepter, Montgomery Mountain, Original Bullfrog, etc., etc.

Mining-stock brokers of the cities went into ecstasies over Bullfrog during the height of the boom in that camp. Philadelphia mining-stock brokers fed Tramps Consolidated of Bullfrog to their clients. Pittsburg brokers recommended Montgomery-Shoshone. Butte brokers placed large blocks of Amethyst. Gold Bar was distributed by brokers of the South. New York brokers were behind Gibraltar, Four Aces, Denver Rush, Montgomery Mountain, Eclipse, Golden Scepter, National Bank and a score of others.

Practically every dollar of the millions invested in Bullfrog stocks has been lost.

The cause of the failure of the Bullfrog district to make good was not the absence of gold-bearing rock, for there is much of it in the district, but it has been found that the per ton values are too low to make the mines a commercial success. Bullfrog is situated on the desert and has no timber and but very little water. Promoters and investors did not realize this until mills were constructed. Then it was too late. If the camp were situated on the timbered shores of the Hudson River, the stocks of many of the mines of the district would probably be in great demand at above par.

Probably the most remarkable fact regarding Bullfrog is that its securities were more strongly recommended by Eastern brokers than the Goldfield issues and became more fashionable at this early period in Goldfield's history. Eastern brokers then had little confidence in Goldfield; and at the very time when the stocks of Goldfield representing inside properties, which later made good in an extraordinary way, were being offered, they advised their customers not to buy. The general cry then was that it was a fly-by-night offshoot of the first great Tonopah boom, and the idea prevailed in the East, because of the ascending influence of George Wingfield, then principal owner of Tonopah's leading gambling hell, that Goldfield was a haven for gambler's and wildcatters.

It was during the early days of the Bullfrog boom that my friend W. J. Arkell's career as a mining promoter came to a sudden end. It will be remembered that when he left Goldfield to go to Tonopah to make the Tonopah Home deal his cash capital was $35. He closed the transaction for the option on the million shares of Tonopah Home's capitalization at a price around five cents a share. Then our "partnership," of three days' duration, came to an end. Arkell journeyed back to San Francisco and there declared me out.

Arkell was a prominent figure for a while as a San Francisco mining-stock promoter. He listed Tonopah Home on the San Francisco Stock Exchange. Then he started in to sky rocket the price. The rise continued until the stock sold at 38 cents, an advance of about 700 per cent, in a few months.

Then the psychological moment for Arkell arrived.

It leaked out that he had been financing his stock-market campaign by buying reams of his own stock on one-third margin and at the same time selling it, in like quantity, for all cash through other brokers. This was equivalent to borrowing 66 2-3 per cent. of the market value. The brokers and banks did the carrying. When Arkell's tactics were discovered, indiscriminate short-selling by market sharp-shooters ensued. Arkell's own hypothecated stock was used to make deliveries.

In order to hold his ground and to get the floating supply of the stock off the market, Arkell engineered a consolidation. The Tonopah Home Consolidated was incorporated, and holders of Tonopah Home stock were invited to exchange their original certificates for shares in the consolidated company.

Just then somebody threw a brick. The names of United States Senator George S. Nixon and Hon. T. L. Oddie, later Governor of Nevada, had been published as directors of the new company, and when these gentlemen saw the half-page display advertisements in which their names were used, and were informed that Arkell appeared to be on the ragged edge, they telegraphed to the San Francisco Stock Exchange denying connection.

Tonopah Home broke wildly on the announcement in the Exchange to something like 3 cents a share. Then it dropped to nothing. Arkell's methods were too "raw," and I knew the smash had to come, sooner or later.

'Twas late in October, 1905. Bullfrog was still in its hey-day. Goldfield's initial boom seemed to be flickering. Work was going on day and night in the mines, but for want of fresh discoveries the camp was being deserted by some of the late-comers.

Out-of-town newspaper correspondents came upon the scene, and stories and pictures of the camp, labeled "A Busted Mining-Camp Boom," etc., soon appeared in the Los Angeles and San Francisco newspapers. Goldfield mine-owners were accused of beguiling the public. Promoters were gibbeted as common bunco men. Peculiarly enough, Bullfrog, younger sister of Goldfield, which has since proved to be such a graveyard of mining hopes, was immune. There men of substance were in control, the writers said, while Goldfield was portrayed as a stamping ground for gamblers and "wild-catters." The stories had their effect even in Goldfield. Leading men of the camp began looking about for new fields to conquer. The majority of Goldfield mine-owners had not "fallen" for Bullfrog, but the success of the Bullfrog stock company promotions in the East inspirited them.

The great mining-camp boom of Manhattan, 80 miles north of Goldfield, which followed, owes much of its success to these fortuitous circumstances. I was one of the first to get the Manhattan fever.

W. F. ("Billy") Bond, a Goldfield broker-promoter whose ear was always glued to the ground, showed me a specimen of ore literally plastered with free gold. He said it came from Manhattan and that Manhattan was another Cripple Creek. It was only the night before that I had lost a good many thousand dollars "bucking the tiger." Faro was the pastime of practically everybody in Goldfield in those days, and I played for want of some other means of recreation and lost heavily.

I was as broke as the day I entered the camp. I bought blankets, a suit of canvas clothes lined with sheep-skin, and a folding iron cot, all on credit. I packed the outfit off to Tonopah. There I climbed aboard an old, rickety stage-coach of the regulation Far-Western type, and started for Manhattan. We rode over a snow-clad desert, up mountains and down canyons--a perilous journey that I would not care to duplicate. The $10 I had in my pocket, after paying my fare, was borrowed money. When I arrived that night at Manhattan, situated in a canyon at an altitude of 7,000 feet, I set up my cot on the snow, wrapped myself in my blankets and slept in the open. There were only three huts and less than a score of tents in the camp.

The next morning I strayed through the diggings. Sacks of ore in which gold was visible to the naked eye were piled high on every side. The Stray Dog, the Jumping Jack and the Dexter were the three principal producers. They honeycombed one another. I questioned some of the prospectors as to the names of the single claims adjoining the Stray Dog, Jumping Jack and Dexter. They informed me that there was one group of claims adjoining that could be bought for $5,000. With $10 in my pocket I proceeded to purchase it. I gave a check for $100, signed a contract to pay the balance of $5,000 in 30 days or forfeit the $100, and immediately started back to Goldfield to induce the president of the bank to honor my check on presentation. He did.

When I returned to Goldfield I carried with me many specimens of high-grade ore. They were placed on display in a jewelry store. There was great excitement, and before night a stampede from Goldfield to Manhattan ensued which in magnitude surpassed the first Goldfield rush.

A few days later I returned to Manhattan and sold my option for $20,000 cash. While I was there I met C. H. Elliott. Mr. Eliott had "cleaned up" in Bullfrog. He told me that he had formed a corporation partnership in Goldfield with L. L. Patrick, one of the owners of the great Combination mine--which was later sold to the Goldfield Consolidated for $4,000,000--and Sol. Camp, a mining engineer from Colorado. The name of the concern was Patrick, Elliott & Camp, Inc. It was organized to promote mining companies. Mr. Patrick is now president of the First National Bank of Goldfield.

Mr. Elliott asked me to stay in camp for another day until he could pick up a good property. He made a deal with some cowboys for a large acreage embracing the April Fool group of claims, scene of the original gold discovery. Twenty leases on this property were in operation, and the surface showings were promising. If the ore "went down," the mine would prove to be a bonanza. Mr. Elliott incorporated a company known as the Seyler-Humphrey to own and operate the ground.

We returned to Goldfield. My publicity bureau telegraphed the news of the Manhattan discoveries to a long chain of newspapers East and West. Then I put out a big line of "display" advertisements in the big cities, offering for sale stock of the Seyler-Humphrey. The entire issue of 1,000,000 shares of Seyler-Humphrey was oversubscribed at 25 cents a share within two weeks. This was the result of $15,000 worth of advertising, and the profits of the firm were $100,000. In quick succession Mr. Elliott promoted the Manhattan Combination and the Manhattan Buffalo. Within six weeks the firm's promotion profits amounted to approximately $250,000.

HOW ABOUT THE PUBLIC'S CHANCES?

I asked Mr. Elliott one evening, shortly after Patrick, Elliott & Camp earned their first $250,000 from their three Manhattan promotions, whether he did not think the public was entitled to subscribe for this stock at a lower price and at a smaller profit to his corporation.

I recall that he said: "The article we sell is something that somebody wants and is willing to pay for. What we have sold them is worth what we have charged. The fact that we are on the ground and have endured hardships entitles us to a good profit, provided the gold showings on the surface of the properties are not exaggerated. The sale of the stocks has been accelerated by your gift of presentation through advertisements. Big department stores and advertising specialists in the cities pay from $15,000 to $30,000 a year for that kind of talent, and we on the desert also have a right to avail ourselves of it."

"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:

Stock Price Odds

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."

"Do you mean to say that the odds against a man making money on Union Pacific on any given day are only 6 to 5 when he buys the stock _on margin_?"

"Not on your life!" he said. "A margin trader on the New York Stock Exchange, unless he has sufficient capital behind him to hold out against 'inside' manipulation, which has for its purpose the 'shaking out' of the speculator, has not got _any_ chance! He is bound to lose his money in the end. I am talking about people who buy stocks, pay for them in full and get possession of their certificates and 'sit tight' with them."

Mr. Elliott was a plunger and lost large sums in the gambling-houses of Goldfield and Tonopah. He lost $20,000 in a night's play in the Tonopah Club, then owned by George Wingfield and associates. When asked to settle he tendered a check for $5,000 and a certificate for 100,000 shares of Goldfield Laguna Mining Company stock, then selling at 15 cents. This was accepted. Within a year Laguna sold freely at $2 a share.

This incident illustrates how the foundations were laid for some of the big fortunes which were amassed in the Goldfield mining boom. When George Wingfield came to Tonopah in 1901 he brought with him $150, borrowed from George S. Nixon, then president of a national bank at Winnemucca, Nevada, and later United States Senator. Mr. Wingfield's fortune is now conservatively estimated at between $5,000,000 and $6,000,000.

Success having been won by the Patrick Elliott & Camp promotions, I was considering whether or not much of the money-making that was being done by the promoters around Goldfield was not due to my own peculiar ability to reach the public, and I even meditated on my fitness to become a promoter on my own account. The best properties in Manhattan, by common consent, were the Stray Dog, the Jumping Jack and the Dexter. These were sure-enough producers of the yellow metal. They were shippers and were held in high esteem by mining men. I found it impossible to purchase the Dexter because the company was already promoted and the stock widely distributed at around $1 a share. George Wingfield was then and is still interested in the Dexter. The Jumping Jack was unincorporated. The stock of the Stray Dog was practically intact in the hands of the owners. The price asked for the Jumping Jack was $85,000. Stray Dog was held at $500,000.

JUMPING JACK MANHATTAN

I was again in funds as the result of my profits in the Manhattan boom, and it was again my wont, for want of any other pastime, to play faro at night. I found myself gossiped about with men like January Jones, Zeb Kendall, C. H. Elliott, Al. Myers and others who rolled in money one day and were broke the next.

The second largest gambling-house in Goldfield was owned by "Larry" Sullivan and Peter Grant, both from Portland, Oregon. Sullivan claimed that he was attracted to Goldfield by the stories which appeared in the Sunday magazine section of a Coast newspaper, the copy for which had been carefully and methodically written in the back room of our Goldfield news bureau. Sullivan and Grant were making money, and plenty of it. I patronized the Sullivan house, of occasion, and Sullivan usually presided over the games when I was there. One evening I cashed in $2,500 of winnings. The money was piled on the table in $20 gold-pieces by the dealer. As I was about to place it in a sack to store away in the safe of the house until the morrow, Sullivan began to josh me like this:

"Say, young feller, why don't you cut me in on some of your mining deals? I'm game!"

"Are you? Well, stack up $2,500 against that money, and I'll see if you are."

He went to the safe and lugged to the table a big canvas sack containing $20 gold-pieces. Stacking the money on the table in piles of $400 each, he matched my stake.

"Well?" said he.

"Put that money in a sack," said I, "and go and get that big coonskin coat of yours, take a night ride by automobile to Tonopah, and in the morning go by stage to Manhattan. When you get there look up the owner of the Jumping Jack mine. I have met him. He is a member of the Ancient Order of Hibernians. An Irishman can buy that property from him much cheaper than anybody else. You go and buy it."

"What will I pay?" asked Larry.

"He wants $85,000, but get it as cheap as you can," I replied.

"What? With this $5,000?"

"Yes," said I. "Pay him the $5,000 down and sign a contract to pay the balance in 60 or 90 days; but fetch him back to Goldfield, and have him bring the deeds."

A few days later Sullivan returned to Goldfield, aglow with excitement. Climbing out of the stage-coach, he pulled me into his private office.

"Say," he said, "I've got that guy with me and he's got the deeds. I bought the Jumping Jack for $45,000. He'll do anything you want him to do."

"Good!" I said.

The owner was introduced to me, and I turned him over to my lawyer, the late Senator Pyne. Mr. Pyne drew up a paper by which the transferred title of the property to the Jumping Jack Manhattan Mining Company, capitalized for 1,000,000 shares, 300,000 shares of which were placed in the treasury for mining purposes, and 700,000, representing ownership stock, put in escrow, to be delivered to Sullivan and myself on the payment of 6-1/2 cents a share. A board of directors was selected.

At this juncture Sullivan, who knew as much about the mining promotion and mining-brokerage business as an ostrich knows about ocean tides, inquired what my next move would be. Sullivan seemed to be bewildered, yet full of faith. My situation was this: I had conceived a rip-snorting promotion campaign for the best property that had yet been offered the public from Manhattan, but I had no cash to present it. Turning to Sullivan I said:

"Do you know the Goldfield manager of the Western Union Telegraph Company?"

"Yes, I know him well."

"Call him up by 'phone or send word to him that you will guarantee payment of any telegrams I file here to-night or during the next three days; I want to send some wires," said I.

"I'll do it," said Sullivan, and within a few minutes I was advised that Sullivan's credit was unquestioned.

I returned to the news bureau and there drafted a 300-word telegram, setting forth the merits of the Jumping Jack Manhattan property and offering short-time options on big blocks of the stock. The message was sent to practically all of the well-known brokerage houses in the country which handled mining stocks. The bill for telegraph tolls was $1,200. When Sullivan learned of its size he nearly collapsed.

"How far do you intend to go?" he gasped.

"Well," said I, "how can you lose? Your friend, Frank Golden, president of the Nye & Ormsby County Bank, has accepted the presidency of the company at our request, and the other officers we have secured are all representative citizens of this community, and, besides, the Nye & Ormsby County Bank has agreed to receive subscriptions. Can you beat that for a layout? Never in my experience in this camp, with all the promotions I have advertised, has the public had a dish quite so palatable offered to it--a producing mine, in the first place; a high-class directorate headed by a bank president, in the second place; and a real bank as selling agent, in the third and last place. And it will go like wildfire!"

I labored all that night in my advertising agency on some strongly-worded advertising copy recommending to the public the purchase of stock in Jumping Jack Manhattan. In the morning I induced Sullivan to advance $10,000 to pay the advertising bills. The copy was dispatched by first mail to the important daily newspapers of the country, with instructions to publish on the day following receipt of copy.

Within six days all of the advertising had appeared. The effect was magical. The display advertisements assisted the brokers in the various cities, who had asked for reservations of the stock, to dispose of their allotments in a few days. Within ten days after the initial offering of the promotion by telegraph to the Eastern brokers, Sullivan showed me telegraphic orders for 1,280,000 shares of Jumping Jack Manhattan stock at 25 cents a share, an oversubscription of 280,000 shares. Before the stock certificate books were printed and delivered from the local printing office, we were, in fact, oversold.

That week and the next, Sullivan gave me _carte blanche_ to speculate in local mining stocks with partnership money, and within a fortnight we had made another small fortune from Manhattan securities. These were advancing in price on the San Francisco Stock Exchange by leaps and bounds.

I recall one overnight winning that we made, amounting to about $12,000, which came so easy I felt almost ashamed to take the money. Manhattan Seyler-Humphrey stock, promoted by Patrick, Elliott & Camp at 25 cents per share, was now listed on the Goldfield and San Francisco stock exchanges. It was in fair demand at 30 cents.

A dispatch reached Goldfield from New York, purporting to be signed by John W. Gates, reading as follows:

"At what price will you give me an option good 48 hours on 200,000 shares of Manhattan Seyler-Humphrey? Answer to Hotel Willard, Washington, to-night."

This was to Patrick, Elliott & Camp. Within half an hour a half-dozen similar messages reached other Goldfield brokers.

I happened to be in the office of Patrick, Elliott & Camp when the first telegram was received, and I lost no time in going out on the street and annexing all the Goldfield offerings of the stock at current quotations. At first Lou Bleakmore, manager for Patrick, Elliott & Camp, "smelled a rat," but when he learned that I was buying the stock he became convinced that I believed John W. Gates really wanted some Seyler-Humphrey, and he shot buying orders for his own firm into San Francisco.

Personally I considered the message a snare. Somebody in the East, I guessed, had bitten off a block of Seyler-Humphrey at around 25 cents when it was promoted a few weeks prior and had made up his mind that he would turn a trick. The Goldfield brokers having received telegrams, I assumed that the same message had been sent to brokers in San Francisco, where the stock was also listed. It seemed to me that an advance would certainly be recorded on the following day. Sure enough, the next morning the stock advanced to 38 cents a share, and the market boiled. At this figure, and a little higher, I unloaded in the neighborhood of 100,000 shares in Goldfield and San Francisco. A good deal of this stock had been picked up by me the night before. But I recall that one block of 10,000 shares had been allotted to me weeks before at the brokers' price of 20 cents, and another block of 10,000 shares had been given me as a bonus for my publicity measures.

After turning over to the treasury of the Jumping Jack Manhattan Mining Company the amount netted from the sale of treasury stock, and paying off the amount still due on the original purchase price, Sullivan and I, within three weeks of my little dare, had cleaned up a net profit of $250,000.

"Do you want a cut?" I asked Sullivan when our joint profits reached the quarter-million mark.

"No, I'm game. Stay with it," he returned.

Next day the L. M. Sullivan Trust Company, destined to make and lose millions in the great Goldfield boom that followed and to mold for me an exciting career as a promoter, was formed with a paid-up capital of $250,000. Sullivan was made president and I vice-president and general manager.