EDITOR MEDICAL WORLD:--I would like to get some advice in regard to the Wireless Telegraf Co. There has been a man around in this part of the country selling stock at $16.50 per share, and he has had pretty good luck, too. Is it a safe concern to buy stock in?[My advice is to let wireless alone. The agent in your part of the country had "pretty good luck," as you say. In three or five years from now you can size up the luck the investors of this stock have had. Please keep this in mind, and let us know when you are able to tell how the investment turns out.--ED.]
Yoncalla, Ore. R. P. MORTENSEN, M.D.
DEAR DR. TAYLOR:--We had a man by the name of Kelley who sold the Wireless Telegrafy stock at $10 per share. One M.D. took his lawyer to examin credentials, etc., and Kelley presented his stock so well that both lawyer and physician took stock. Caught bankers and business men. Held wireless exhibition in the Y. M. C. A. Hall; and promist to connect us in 12 days with Marconi, the inventor. Only 5,000 shares could be distributed in the state. It has been more than 180 days, and nothing from the wireless.It will be many times 180 days before any of the investors get any of their money back. A cute dodge is to set a limit upon the amount of stock allotted to a state. That makes everybody want some of it; and in that way they can sell more of it, and at a better price, than if it is unlimited; and they can sell it easier. A demonstration in a hall is a very different thing from commercial use out in the open, producing commercial results. And if commercial success should be achieved, there are still many obstacles between the small investor and his money. If the small fish have something good, the big fish usually find some way to get it. I do not know of a single small investor in a new thing of that kind who ever got even his money back; do you? There are many small investors in the standard railroad stocks and other standard stocks, and they can sell at any time, and sometimes with a profit. But money put into the new things like wireless is usually lost. They are boomed up so as to make a "lamb" think that investment of a few hundred will certainly bring him a fortune. But don't be a lamb.
Is it possible that doctors encourage this sort of thing by actually buying the stock? If not, why do so many concerns do it? Or is it because of the "hope that springs eternal in the human breast?" You see, the trick is this. It is an old one, and has often been exposed in these columns. They can make the capitalization whatever they please. So they make it large enuf to spare a portion of the stock to the doctors, which they get real money for. Then, after the doctors have provided the money, they prescribe the product, thus giving value to the little stock they own, and at the same time giving value to the much greater amount of stock retained by the promoters. It is a beautiful plan--for the promoters.
WIRELESS BROKERS ARRESTED.Louis Robinson, of the firm of Robinson & Robinson, No. 80 Wall Street, New York, was arrested by Central Office detectivs, charged with grand larceny. The firm was selling Marconi Wireless stock on the Pacific Coast, pretending it was representing the company, when such was not the case. The firm is charged with being the successors of Monroe & Monroe; Monroe is himself a fugitiv from justice.
Agents are also selling United Wireless on the Pacific Coast for $16 a share, $6 more than its par value--a ridiculous price.
|United Wireless Telegraph Company stock, circa. 1907|
I have got myself into quite a little difficulty about Wireless Telegraphy here. In the first place by making the statement that it was not worth $17.50, the price that one preacher was selling it for. When I received THE WORLD for September I noticed that on page 382 you made the statement that it is a ridiculous price, as the par value is only ten. Now these same fellows are back here and are strictly on the war path, and claim that they are going to make me trouble. I have shown your article to a number of people and they are truly surprised. Now, I wish that you would write me or publish what the Wireless stock is selling for in the open market. I must call this preacher's stuff. They have sold over 10,000 shares in this small town, and they are back here to sell at least 10,000 more, but not at $17.50; they now are selling it for $20 per share.I got official quotations from New York and sent to him. The quotations were: "$2.75 bid; $3.75 askt." That is, in the public buying and selling that goes on every day in New York, $2.75 per share was bid for Wireless; and those holding same askt $3.75. And those poor victims in Oregon were paying from $17.50 to $20! Another Oregon brother asks about Wireless, saying that "nearly every business and professional man in this and other towns have invested in it." He says that he personally knows some persons who bought Bell Telefone stock when it was low and have come out nicely on it. That is one of the happy instances that is used to ruin people in other things. I suppose these Wireless people have used the Bell Telefone argument, as all fakirs do, to make people believe that their stock will be like the fortunate Bell Telefone stock. I am immediately suspicious when the Bell Telefone argument is brought into use; for that argument has been used to make more people poor than the stock itself made rich. Only one Bell Telefone to ten thousand or a hundred thousand that claim they will be as great money makers! You might as well consider every man a George Washington.
The price is $8 per share.This leads us to wonder what Mr. Dodge, of Ruskin, Tenn., pays for the stock he sells. According to the figures we publisht on page 512, he is making a good profit, also. Selah!
It is being sold by brokers thru agents at from $10 to $15 per share, and you can do a good business in this way if you wish.
Regarding the United Wireless Telegraf Co. about which you made inquiry, we have the following from New York:So you see "Wireless" is not a "live wire" in financial circles. I understand that the DeForest company was included in the "United.""The United Wireless Telegraf Co. has no standing at all. In fact, all of the Wireless Companies apparently have been exploited more as stock-selling than commercial enterprises. This opinion has nothing to do with the merits of the invention; simply from the methods of exploitation; we have never been willing to handle the securities of any of the Wireless Companies.
Beside the United Wireless, the only others we know are the DeForest Wireless Telegraf, the Marconi Wireless Telegraf of America, the Marconi Wireless of Canada, and the English Marconi; also Pacific Wireless."
A company that is activly selling stock, and which does not list the stock, and keeps it off the stock exchange, may have reasons for doing so, but the reason above given does not appeal to me, particularly when they have agents out selling the stock at 150 percent above par (par, $10; selling price, $25).
C. C. WILSON, W. A. DIBOLL, President. Treasurer. S. S. BOGART, CLOYD MARSHALL, Vice-President. Secretary. UNITED WIRELESS TELEGRAF COMPANY, 42 BROADWAY, NEW YORK. FEBRUARY 27, 1909. The Medical World, 1520 Chestnut Street, Philadelphia, Pa.:
GENTLEMEN:--We are sending you under separate cover a copy of the February Aerogram, which contains reports of this company and officers, etc.
We have a station in Philadelphia which is doing a splendid business, and one of our directors is a physician in your city, as you will note.
We do not list our stock on the exchange for the simple reason that we desire to keep a fixed value to it and as you well know, stock listed is subject to the vagaries of the market, and in our opinion tends to make it unstable.
We are holding our preferred stock at $25 per share and the common at $20. We would be pleased to have you investigate this matter thoroly as to the commercial end, which will afford full opportunity to any representativ you may have in the city of New York.
Yours very truly, W. A. DIBOLL,
Add the first three items of "assets" and we have a total of $24,444,120 in a total capitalization of $25,272,219.15, made up of the "goods" mentioned in the first three items, which see above. Not very solid property in these three items, do you think? The patents are probably valuable--maybe as valuable as the amount given. The value of the treasury stock is based upon the patents and other property, so that item does not add anything to the property value held by the company. "Stock and bonds of other companies" is a heavy load, and it amounts to over half the total capitalization! If you are in the market to buy commercial paper, better do what I have always told you--buy a mortgage on some good property known to be worth about double the mortgage. That is safe financiering.
FINANCIAL STATEMENT, UNITED WIRELESS TELEGRAF COMPANY. January 1, 1909. ASSETS. Patents and Patent Rights $5,005,100.00 United Wireless Telegraf Company Stock in Treasury (Par) 5,310,410.00 Stock and Bonds, Other Companies (Book Value) 14,128,610.00 Factory Material on Hand 9,285.55 Factories and Equipments 25,996.98 Land Stations and Real Estate 215,442.50 Boat Stations 287,500.00 Office Furniture and Fixtures 3,975.38 Cash in Treasury and Treasury Agents 109,400.70 Bills and Accounts Receivable 176,498.04 $25,272,219.15 LIABILITIES. Capital Stock (Authorized Issue) $20,000,000.00 Bills and Accounts Payable (Current Monthly) 15,556.37 Surplus 5,256,662.78 $25,272,219.15
$14,000,000 IN A BOX ON THE SHELF.
The United Wireless Valuable Securities.
The financial editor of a well-known magazine was askt ahout the United Wireless Stock by a reader, and he promptly wrote in answer that it was a fake. This came to the notice of the president of this concern, and he addrest a letter to the editor, in which he said that he felt very much injured, and thought that this injustice was done his company unintentionally, ending his communication with a request that before condemning the proposition again, he should fully investigate it.
This the editor did. He called quite unexpectedly at he office of the president. Taking the last annual financial statement, he carefully went over each item, and finally reacht the one which mentions "Stocks, bonds, and other securities, book value, $14,000,000." "Have you those securities?" he asked. "Yes," said the president. "Do you mind showing me them?" "No, not at all," replied the president, and be took him into another room, a very small one, and pointing to a box on an upper shelf, said, "There they are."
Those securities must be very valuable to be handled in such a careless manner. Fourteen million dollars in a box, with no protection against fire, up on a shelf!
It is unnecessary to say that the editor of the magazine went away more firmly convinced than ever, that the whole proposition was a fraud.
In Boston, brokers are advertising for $4 the stock which the company's agents are selling for $25 a share or one-sixth the price, and even less than one-half the stock's par value.
One of these days the bottom will drop out of this affair. When this happens, those holding the stock will be fortunate if they can get even 40 cents a share for it.--Financial World, April 3d.
THE UNITED WIRELESS HOLD-UP GAME.
In every conceivable way does the United Wireless concern block the efforts of stockholders to transfer their shares. This is done to prevent them from throwing their stock in the market. This would not do, as it would interfere with the efforts of the salesmen to get rid of the treasury stock at $25 a share.
We have in our possession a letter from a Milwaukee subscriber who owns forty shares of the preferred stock which the company refuses to transfer, giving as a reason some legal objections. This stockholder was induced to exchange Marconi stock for the certificate he now owns, and can't get rid of it even by giving it away.
This stock was transferred by the Greater New York Security Co., whose name is affixed to the certificate as the company's transfer agent. This concern was an off-shoot of Abraham White, and has gone out of existence, but why this should invalidate the certificate is not explained. In fact, it does not invalidate it. The real legal objection is, as already mentioned, that the Wireless outfit do not want this stock to come in competition with their own.
How long will the great Empire State permit such high-handed and outright financial confidence games to disgrace and hold her up for public condemnation before the rest of the country?--Financial World, April 10th.
and so on, for a full column on the front page. We need not go into particulars here. Wireless telegrafy is a remarkable and useful invention; and it is a shame that its wonders have been used to cheat so many people out of their savings--mostly "small investors," as school teachers and other professional people. "Small investors" are notoriously bad investors; and it is usually found that schemes that are set to catch small investors have not sufficient merit to catch large investors. I have said this so many times that every reader must know it; yet small investors continue to bite at the bait cleverly set for them, and continue to lose their money. For example, this Wireless swindle has "cleaned out" whole towns--that is, has taken all the loose savings out of them--not from bankers nor capitalists, but from doctors, dentists, lawyers, preachers, teachers, small merchants, etc. And even where doctors did not invest, many of their patients did, with money that should have gone to the doctor. So you see, even if you are smart enuf to keep out of such things, you may suffer indirectly.
WIRELESS MEN ARRESTED UPON FRAUD CHARGES. OFFICERS OF UNITED COMPANY ACCUSED BY POST-OFFICE INSPECTORS. SAY STOCK WAS JUGGLED. THOSE "ON INSIDE" ALLEGED TO HAVE MADE MILLIONS AT STOCKHOLDERS' EXPENSE.NEW YORK, June 15.--United States post-office inspectors raided the handsome Broadway offices of the United Wireless Telegraf Company to-day and caused the arrest of Christopher C. Wilson, president of the com-
ONE PROMOTER'S BILL.Col. Christopher Columbus Wilson, former head of the United Wireless Company, was brought from a federal prison recently to testify as to what had become of a large sum of money taken in from the sale of the company's stock to the public at inflated prices. A schedule of his spendings from 1907 to 1912 was part of his testimony--an eloquent witness to the prodigal ways of the promoter with other people's money. The Colonel is an eye-filling figure--a composite Falstaff, Colonel Sellers and Bret Harte gambler--not as great a figure in the history of promotion as Hooley of London, but with a more breezy personality. No one familiar with the United Wireless manipulation believes that Wilson was responsible for more than a small share of its success, but he was always pusht to the front. His great body, his thick mane falling from a magnificent head, and his confidence-breeding manner were valuable assets to the shrewder, less spectacular agents who actually sold the stock. And to encourage him in the part he was to play, the wireless company cheerfully met the cost of his services. In the four years covered by the schedule he filed, Col. Christopher Columbus Wilson spent $1,085,200.
LINNTON, ORE., August 11, 1912.
EDITOR MEDICAL WORLD:--"Business Talks to Doctors" has already been of inestimable benefit to the profession. But you cannot hope to warn all doctors, and besides, some do not want to be warned. They simply can't help contributing to the get-rich-quick schemes, any more than that poor fellow can help turning into a saloon as he passes along the street.
They know better at the time, but we as a nation, are born gamblers. We have to "take a chance;" and when one of these schemes is put up, if the feeling comes over us to buy, no persuading or pleading of friends will stop us, in many cases. We simply must have the sensation, common to the gambler, of a vague possibility of great gain, without effort on our part, of getting something for nothing, for there would be little wild-cat stock sold did the promoters not assure the buyers that their stock would earn them much more than legitimate investments.
To illustrate: I am cashier of a bank, and also practise medicin to some considerable extent. Lately a good patron came to the bank and smilingly said he was "going to gamble a little," and for me to make out a check for $150. I said, "What are you going to buy now, Louie?" and he laught again and said, "Oh, a friend of mine (save the mark) told him about stock in the Pacific Coast Wireless News Co.," I think it was, and that "there were only 500 shares left, and the friend was going to take half, and wanted him to take the other half," and it "lookt pretty good," and "what do I think of it?" "Well," I said, as I counted out the money, "Louie, I am something of a sport myself, and I don't mind taking a chance occasionally; I tell you what I'll do; you buy the stock, then give me half the amount you pay for it, and I will give you double the dividends you get from the stock."
"What's that you say?" said Louie. I repeated my offer, and to make it plain I stept to the typewriter and briefly wrote out the offer, leaving blank lines for signing, and signed it and handed it to him. He said, "You must know something about the company," and "Isn't it any good?" I replied I knew nothing whatever of the company, but that I was good for any offer I made and signed, which he knew was so. He said, "Well, maybe I brings this money back," and laughing and a little confused, he left the bank, my offer in his pocket.
Has he brought the money back? Not on your --------. He simply had to buy that stock--only 500 shares left, and he could have half of that--think of it. A man pass up a snap like that? Not much. Did he take me up at my offer, which was four times as good as buying the stock--requiring half the amount of money, with double the dividends? Not on your reputation!
I did not offer him stock in a big-sounding concern, which would issue him a highly-ornamented piece of paper, duly signed and attested, carrying with it all the delicious, mystifying anticipation of great returns on a small investment. That was the trouble.
I have made this offer before to people parting with their "long green" for lithografs, but never have had a taker. But from the law of averages, I am sure my offer is very conservativ business, and I feel confident that if I could get takers in sufficient numbers I could amass great wealth, for the reason that probably not more than one in 200 of these concerns ever pay dividends.
What is wrong with this that I cannot get takers? I am considered amply able financially to do my part. Here is a problem in psychology or metaphysics. Can anyone analyze it?
Was it not our Uncle P. T. who said, "The public paid him for humbugging the people, and be d------ if he wasn't going to do it"?
I feel sure that when we sift it all out, and give each element its due importance, we will be forced to acknowledge that it is the gambler within us, love of chance, get-rich-quick, get-something-easy-or-for-nothing that is at the bottom of the whole matter.
S. M. MANN, M.D.