"Her little--?--Dorothea!"

It behooves the villain to be without conscience. No slightest shame visited the brazen one's heart at the sight of Jennie's instant joy and excitement. Modestly she accepted the tribute to her uncanny power; obligingly she a.s.sisted her friend to pack; martyr-like she acquiesced in Jennie's decision that the first train after breakfast would be none too early to bear her to that long-coveted delight--a baby sister. Moreover, she cannily advised her friend as to the mode of proceeding. "If you tell them downstairs why you are going, they may not let you. They don't know about visions. Just tell them that you're going home and NOTHING ELSE."

This advice, followed to the letter, produced no little agitation at the breakfast table. Jennie simply announced her intention of immediate departure; all questions as to her health, happiness, and possible reasons were met only with a parrot-like repet.i.tion of the fact. Upon closer pressing she gave way to hysterical tears, Dorothea the while a.s.sisting the scene with round, innocent eyes and the bewildered air of one suddenly made aware of an impending event.

The solution was presently found by a sympathetic and consoling circle--the child was homesick; she wanted her mother. a.s.suredly that explained everything. The lure of sails and picnics having failed, Dorothea's mother came to a decision with sympathetic tears in her eyes and a glance toward her own innocent. "She shall take the first train home if she wants to. The child sha'n't be miserable. No, don't urge her, Bob. I was homesick myself once, and I understand perfectly."

Dorothea reposed in the shade of the bulkhead, sand on her person and a great peace in her heart, upon which the Monster, departing, had left no scar. Under her head was the G.o.dey's Lady's Book, in which, over the picture of a brocaded pelisse, she had recently finished a poem in which "lover" rhymed-- with "forever." Amiel, cross-legged on the sand beside her, was whistling gently as he industriously whittled at a bit of driftwood, little suspecting that at the moment he was taking tea in a bower with Lady Ursula.

Presently he drew a letter from his pocket and flipped it over to Dorothea. "Your mother asked me to give you this," he said. "She thought it might be from that pretty little friend of yours."

Dorothea opened the letter with some trepidation. Presently a bland smile over- spread her countenance. The day of reckoning that she expected to dawn upon her next meeting with her victim melted cloud-like as she read:

Dear Dorothea:

I arrived home safely. It's just as well I did, because my aunt was waiting to take me to Lake George, but you made a mistake in the vision. It wasn't my mother. It was Mrs. Gray across the street and hers is a boy, but I think that was very near.

I think the vision was perfectly wonderful, but I am glad I don't have them. My mother says I can come again later if your mother wants me. I didn't tell her why I came home, because she doesn't believe in them either.

She presented her love to several people and added in a postscript, "Let me know at Lake George if you have another."

Dorothea tore the letter into minute sc.r.a.ps and gave them over to the sea breeze.

"Well," queried Amiel idly, "what does she say?"

"She says she arrived safely," said Dorothea.

Vol. XXIII No.1 JULY 1910

{pages 44-55} THE GOLD BRICK AND THE GOLD MINE

Fake Mining Schemes that Steal the People's Savings

By EMERSON HOUGH

Author of "The Mississippi Bubble," "54-40 or Fight," etc.

EDITOR'S NOTE.--It is time vigorous efforts were made to stop the cruel frauds perpetrated on the name of one of the world's greatest industries. Mining is a legitimate and honorable enterprise. It contributes immensely to the national wealth. It has been the source of some of our great fortunes. Because there is something magical in the suggestion of gold or coal or copper taken out of the ground, sharpers have made mining an instrument of successful deception. They have tricked people into investing their savings in worthless or even non-existent mines. Perhaps you who read this have bitten at an advertis.e.m.e.nt in a reputable publication, which pretended to place the wealth of some western El Dorado at your feet for a few hundred dollars. Doubtless your money has disappeared. It is for the purpose of giving you the protection of a knowledge both of legitimate mining and of the ways of thieves that this article is published.

AMERICA is the land of the free and the country of opportunity for all. Incidentally, it is free hunting-ground for sharpers, and a land of opportunity for the unscrupulous. No such chances for fraudulent business exist anywhere else in the world.

Americans are the richest people on earth, and the most easily parted from their money. Those whose sole ambition is to get rich quick very frequently help some other man to get rich quick.

Society owes no debt to either of these. It is obliged to support them both. This is wrong both as a moral and as an industrial proposition. Once, a dollar was spent to mine a dollar. To-day two are spent: One dollar goes into blasting powder, the other into advertising and office furniture.

No doubt you have heard the age-old legend of the Mother Vein of Gold, which appears and vanishes, now and again, in this corner of the world. Superst.i.tion regarding this great original vein of gold is found wherever men seek the precious metal. The feverish Spaniards called this phantom lode the Madre d'Oro, or "Mother of Gold." Now it is located in Mexico, now in India or Peru, California or Australia. Tradition says that Montezuma got his gold from this great vein, which lay in a secret valley whose where-abouts was jealously guarded by three priests of the war tribe, sole possessors of the knowledge. Any intruder who by chance or design looked down into this valley was smitten absolutely blind. Tradition among the successors of the Aztecs says that when Montezuma pa.s.sed, the Madre d'Oro sank back again into the earth, and has been seen no more. Men still follow the phantom vein. Those who see it, even in their dreams, still are smitten blind.

Gold! There is no other word that means quite so much. We want gold; indeed, we must have it. Malleable, divisible, indestructible, rare, it is the indispensable medium of exchange.

It is our chosen unit of power and success, the measure of civilization and human attainment. Hence it has always been the object of human desire. The Golden Fleece very probably was the sheepskin bottom of an old-time sluice-box, in a day when they used wool, instead of blankets, below the rocker troughs. In the vast ruined civilization of Southeast Africa unknown men once mined probably $400,000,000 worth of gold. There are mines profitably operated in Greece to-day which the Phoenicians opened 1,200 B. C. Sixteen hundred years later the Romans owned all the mines in Europe. Hannibal once paid his warriors in gold coin of Carthage. Egypt was settled by the Semitic races 2,500 B. C., because of the gold that was found there. A thousand years later Job knew about gold, and five hundred years later still, King Solomon showed what an abundance of wives and what a reputation for wisdom a man can get when he has unlimited gold mines back of him. Columbus found America when he was searching for the wealth of Ormus and of Ind. Cortez and Pizarro toiled and slew in the hope of finding the Madre d'Oro. The great discoveries of the world have been made by men in search of gold. The great voyages of exploration were in part piratical voyages made in search of gold already found and mined by others.

HONEST MINING IN HANNIBAL'S TIME

But there is to be said about gold mining ways of the old time, that Tyre sought gold with actual ships, with actual men and mining implements. The peninsula of Sinai did not sell stock, but mined actual gold. Gold in those days meant actual risk and courage. Perhaps even then fraudulent promoters weren't unknown; but he who ventured, in the days of Vespasian or Hannibal or Hiram, too prominently to gild the gold brick certainly lost his head. The mining of gold was then a sober and serious and honest matter.

In America we place the gold brick ahead of the gold mine. We mix alloy of duplicity and greed with the virgin metal of our standard of value. By improved mining methods we nearly double our output of gold, and so cheapen it by well-nigh a half. This shrunken gold dollar is small enough; but that is not all. We adulterate and divide it by, say, another half when we falsely double its cost. This we certainly do when we issue counterfeit promises as against good coin; for in civilization and commerce always the genuine coinage has to pay the cost of the counterfeit. Your tailor charges you a stiff price for your suit of clothes. That covers the clothes of the dead beats who did not pay. To allow the sale of a fraudulent mining stock is to depreciate the basis of this country's values. Such a wrong ought not to be allowed in a country claiming an enlightened government.

It is the thief who is protected in America, not his dupe. The old law of caveat emptor protects the SELLER of fake mining stocks, not the BUYER of them. There is little or no actually enforced law to protect the latter. That is to say, there is little or no actually enforced law to protect those who most need protection, those of small incomes, orphans who have no guardians, wage earners who have little education, widows whose life insurance is not quite enough to support them, women engaged in the desperate battle of life and needing more money, quick money, better to protect themselves. The fence between these and the natural perils of the world is slight enough. In America we break it down entirely.

We offer these helpless ones freely as victims to the greater cunning and strength of men wholly without sense of business honor or personal decency. When we do this, we also attack the whole system of savings banks, which is, or should be, the very bulwark of a nation's financial safety. Says the wolf to the widow, to the busy professional man, to the clerk, the stenographer, the wage earner: "Take your money out of the savings bank. What is three per cent. a year, when I can make you three hundred per cent. a year? Give your money to me!" We permit that. Our national government does not undertake to put a stop to it; our states do not undertake to do so; and this fact is more possible through actual lack of proper statutes than through any misinterpretation or lack of enforcement of the law.

The field is one devised by nature for the trickster. His success does not depend altogether on human gullibility; part of his argument rests on the conditions which surround the industry of mining, one which never can be free of extreme risk. All men know that gold is found far away, where living is high and means of transportation are scarce; that it costs large sums to find and dig it, and that such sums are more easily raised among the many than among the few. None of these attending features has weight to stop the capitalization of bona-fide enterprises. These latter are used as bait by men who have nothing bona-fide to offer, and who make their fattest profits out of their shallowest shafts.

THE "SUCKER LIST" IN WALL STREET

Methods vary among such fraudulent operators, but new victims continually are found. The "sucker list" of one firm in Wall Street numbers 110,000 names, selected as those of persons who will bite more than once at a mining scheme, and whose records show that they have so bitten. This operator proudly declares that the only way a sucker can get his name off that list is to die. In the reorganization of the firm of Douglas, Lacey & Co., of New York City, it was discovered that 20,000 persons had money invested in stocks of the company.

The best bait in this particular operation was a "trust fund"

established for the benefit of stockholders. The proceeds of the better-paying mines were to be applied to pay dividends for those which were less successful. In this way, the various directors of the many Douglas-Lacey Companies explained, it was impossible for the investors to lose. But they did lose. The reorganization, intended to save some of the better properties, wiped out more than seventy per cent. of the small stockholders--widows, schoolteachers, stenographers, washwomen, scrubwomen--all who once had a dollar in the stocking.

Burr Brothers, Inc., of New York, used the effective bait of the instalment plan of payment. Their literature and advertising offered sudden wealth at twenty cents a share, payments to be in instalments, "the best twenty offers" to be accepted. It was pointed out that if one made one's weekly payment large enough to be included among the fortunate twenty, one could have a nice, clean certificate sent to one immediately, and pay for it at one's leisure. If you think the operators could not afford to do that, you are ignorant. There was an old negro woman in the South who often importuned her white friends for funds to build a certain somewhat mythical church. They asked her what she received for the time spent in collecting. "I has what I gits,"

was her frank response. She enunciated a great modern mining principle which has made fortunes in Denver, b.u.t.te, New York, Boston, and many other places where handsome lithographic work is done, and where advertising s.p.a.ce can be bought in journals considered reputable.

NEW ENGLAND "DONE" BY AN INSANE MAN

Sometimes there are victims in enterprises of this sort where there probably was no deliberate intent to deceive or to defraud.

Not long ago, in Boston, one Henry D. Reynolds, formerly president of the Reynolds Alaska Development Company, was brought before the United States Circuit Court on the charge of using the United States mails with intent to defraud. Three alienists are said to have declared him insane. In 1907 ex-Governor John G.

Brady, of Alaska, endorsed Reynolds and his schemes, and is reported to have collected in New England about $450,000 for these Reynolds projects. Brady gave "lectures" and stereopticon exhibitions in New England churches. Reynolds took out an excursion of Boston and New England investors to Prince William Sound, at one time, and showed them the seacoast of Alaska, practically all of which he claimed to own. At Boulder Bay he took his party into a long tunnel, the face of which they were told was composed of solid copper ore. When they emerged into the garish light of day, each was given a bright copper nugget, said to have come from the mine.

ALASKA REYNOLDSIZED

Really, according to local report, these nuggets of native copper had been taken from sluice boxes on Chitt.i.tu Creek, 235 miles inland. Reynolds, so ran the story, had treated them with an acid bath to brighten them, knowing that bright bait is better. At any rate, the good, sober New Englanders went back home and sent him $300,000 more, which set him entirely "dippy," in local phrase.

Reynolds's scheme was to run all the barber shops, laundries, bars, and pretty much everything else on the Alaskan coast. A certain Sam Blum had a store and bank; Reynolds wanted it; and Blum, it is alleged, annexed $50,000 of the New England money as a forfeited first payment on his property. A steamship company, it was said, got $75,000 of money on a forfeit. So the good New England savings merrily disappeared, in one of the most spectacular farces ever known in Alaska; which latter is too good and valid and valuable a national possession to permit to be Reynoldsized, as it has been. Reynolds, in the belief of one who knew him well, was a combination of the ignorant enthusiast, the wild promoter, and the crazy man; and as for Brady, another Alaskan called him "nothing worse than an innocent old ninny."

Yet, even with so sorry a mental equipment, these two took something like half a million out of conservative New England!

The ease with which money can be raised for such enterprises by the deliberately fraudulent or the unintentionally insane continues one of the wonders of our civilization.

Another kind of bait offered is that of the "prominent name."

This has proved more useful in England than in this country.

Whittaker Wright was able to secure members of the n.o.bility for his boards of directors, and the English public swallowed his schemes one after another, bait, hook, bob, and sinker. In this country we have no lords whom we dearly love, so the names of prominent literary or scientific men sometimes are employed by wise promoters. A "prominent mining expert" is excellent bait.

Some good men have been used in this way, and the bait of their reputation in other lines of activity has served to make ignorant and innocent people of small means swallow the hook hid in the lying statements which they have perhaps innocently, certainly ignorantly, fathered. We are all familiar with the literature of this cla.s.s, sent to us under the guise of personal and intimate confidence. Always that part of the communication is followed by the blackfaced type where the stinger lies concealed. The words AT ONCE usually come in capitals, as do LAST CHANCE, and PRICE POSITIVELY WILL ADVANCE AFTER TEN DAYS. Millions and millions of dollars have been extracted from the public by these means. There is no law against it.