CHAPTER LIII.

HOW FORTUNES ARE MADE AND LOST.

During the prevalence of a big stock excitement, times are lively along the Comstock range. Virginia City then hums like a Brobdignagian beehive. All who failed to make fortunes on the occasion of previous excitements in stocks are going to do better this time. They have seen how these things work, and this time are going to sell when they can do so at a fair profit. They don’t want the last cent: they will give some one else a chance to make something.

This is the way they talk at the start. As soon as there is a marked advance in stocks, however, they will be heard to say: “As soon as I can double my money I am going to sell.” In three days from the time of their making this assertion, stocks have taken such a “jump” that they could sell and double or more than double their money. Everybody is saying, however, that they are not selling for half what they are worth; that they will sell for twice or three times present prices before the end of another month.

The men who were intending to sell whenever they could double their money cannot think of doing anything of the kind as things are now looking. Instead of selling they become excited, put up their stocks (which they had probably bought and paid for “out and out”) as a “margin,” then put in all the money they can raise besides, and buy as many shares of their favorite stocks as they can in any way manage to secure. Stocks still go up, and each day these dabblers will be found counting their profits. They have invested largely in the low-priced stocks of “outside mines”—mines in which nothing of value has yet been found, but mines in which, all are saying, grand developments are liable to be made at any time—mines, in short, which in dull times are generally designated as “wild-cat.” The masses—the servant girls, chamber-maids, cooks, hostlers, washerwoman, preachers, teachers, hackmen and draymen—are wildly and blindly buying these low-priced stocks, and from day to day they are going up “with a rush,” and everybody is getting rich.

Our men who only “went in” to make a fair profit, now tell you that they made yesterday $10,000; to-day they have made $15,000, and in a week or two they will say that they are worth a quarter of a million, half a million or a million of dollars. But they are not going to sell yet: no, indeed—the rise has only commenced. Pretty soon stocks fall off a little. Never mind, to-morrow they will do better. To-morrow they are still a “little off,” as is said when stocks are going down. The next day they are rather “soft,” which is the same thing as a “little off.” However, that is all right. Our dealers—amateur speculators—have some points, given them by a friend who is on the inside. A development is about to be made in a favorite mine. The “bears” are trying to break the stock; but they can’t do it; no, sir!—impossible. Too much merit in the mines at this time. All will be up and “booming” in a day or two. Next time you shall see them go higher than they have yet been seen.

Our men who started in to make a fair profit might yet sell and double their money—much more than double it—but they are not going to do anything of the kind. They are going to wait till “things take a turn.” The “bulls” will soon make a grand rally, and when things go up again our men will sell. They admit that they should have sold when their stocks were all up before, but, never mind! they will go to the same figures again in less than a fortnight, when they will be sure to sell.

There does come a “spurt,” and for a day or two there is a cheering improvement in prices along the whole line. Faces brighten and everybody talks of all stocks going higher than ever.

All at once everything is again “soft;” the next day “softer,” and the next decidedly “off.” It is then said that some one in the “bear” interest has been telegraphing to the “Bay” (San Francisco) a pack of lies about the mines, and the “bears” “below” (at San Francisco) have made use of these lies to get up a “scare.” Never mind! the scare will be over in a day or two.

But stocks still go down. Then it is said that some big dealer is “unloading” and there is talk of a “crash.” Still our men who started in but to make a “fair profit” do not feel like taking thousands, when they might a short time before have taken tens of thousands of dollars. They still hold on, saying that even though one or two big dealers are unloading, the big men among the bulls will “stand in” and take all the stocks that are offered. Also, they will have some points from a friend “on the inside” and developments are about to be made in one or two of the mines that will make all who have sold “very sick” particularly those bloodless demons who have “sold short.” The “shorts” will have a merry time of it when they come to “fill.”

Thus matters stand, when suddenly there comes what looks very much like the beginning of a “crash.” The “bears” are all diligently crying, “stand from under.” Many persons become frightened, and throw their stocks upon the market. Down go prices and soon “soft” is no name for it. The masses—the tinker and tailor, the preacher and the teacher, the hostler and the waiter—rush in to try to “save themselves” and there is seen a grand and unmistakeable crash. Brokers are calling on all sides for “margins” to be “made good,” and men are rushing about trying to raise money to “put up” in order to prevent their stocks being sold at less than cost.

They perhaps raise the money required, and for a few days breathe again, when there is a further decline in stocks, and the brokers are again sending notes to their customers telling them that if they do not put up more money they will be sold out. Sooner or later there comes a time when the customer can raise no more money, and his stocks are thrown into the market by the broker—in whose hands they remain—and are sold. Thus ends the grand speculation.

Our men, who at the start were resolved to be content with a fair profit are generally found among the number of those who are sold out, when they are heard to say that if they ever have another such chance to make money they will not hold on for the last cent. They have said the same thing year after year ever since the opening of the Comstock mines. But whenever there is a grand upward movement in stocks they never fail to become excited and try to buy about ten times as much stock as they can pay for. In this way they lose all except what they may have happened to purchase at a fair price in a mine of real merit.

Persons who purchase mining-stocks on a “margin” pay their broker, as a rule, one-half the market value of the stock so bought. The other half is advanced by the broker, the customer paying him interest on the amount at the rate of two per cent. per month. The broker also receives one per cent commission on all sales and purchases made for the customer. Stocks are nearly always bought and sold in the San Francisco Stock Board, the broker in Virginia City telegraphing to his agent “at the Bay” to buy or sell such a number of shares of a certain stock, and the bill for this telegraphing is paid by the customer.

In case of a decline in the price of the stock purchased, the customer must pay in to the broker enough money to make him secure for the amount he has advanced, taking into account the current price of the stock. Should there be a further and continued decline, the customer must continue to put up money, in order to make his broker safe. If he is unable to do this his broker sells him out—_i. e._ takes care of “number one.”

From this it will be seen that the broker who does a strictly commission business—who is not himself a dabbler in stocks—makes a very soft thing out of it. Sometimes, however, stocks drop so rapidly that the broker cannot sell in time to save himself. This is generally when the customer has been allowed to buy stock on the presumed value of the stocks he already has in the hands of his broker, putting up stocks that have advanced at their current value as a margin on which to purchase still other stocks, and so running his purchases up on the compound-interest principle.

When a broker calls for money to make margins good, “mud” is the slang word used among dealers in stocks, by which to designate the money so demanded. One frequently hears a man who is a dabbler in stocks cursing his luck, the condition of the market, and all else, concluding with: “And here is my broker calling for more mud!” When the reports of the sales of stocks are received from San Francisco and prices are a “little off,” one hears some person who has read the news sing out: “More mud, boys!”

The demand for “mud” often causes very long faces to be seen on the streets—to many it means ruin. Yet men will continue to buy on margins, taking all the chances, and stretching what ready-money they have as far as the broker will allow them to go. Provided men buy on a margin at a time when stocks are very low and then shortly after comes a grand excitement, they are liable to make a little fortune with a very small amount of capital, but to buy in this way at a time when everything is high is dangerous business and the demands for “mud” are likely to be very numerous.

The following letter received in Virginia City, from a Frenchman, in San Francisco, shows how he first became acquainted with this dreadful word, “mud” and how he relished the thing itself:

SAN FRANCISCO, CAL. April 11 1875.

Monsieur—By zee advice of one goot friend who informed me zat he be on zee inside, and who make for me zee negoziazione, I have procure some time past on what you call “on zee time,” many share of zee Bobtaile. Zee prix zat time be fortee dollaire on monnie d’or des Etats-Unis; bote I buy on zee time and not pay zee prix. My friend on zee insides tell me Bobtaile one ver fine bargain for fortee dollaire. Ah ha! Bobtaile one ver fine compagnie! plenty mashine pour work; grand nombre d’employés; Superintendent un salaire plus grand, je suppose! all ting ver fine. Me buy? Vraiment, oui. He—mine friend who repose on zee insides—express himself of zee mine wis moche enthousiasme. “Zee mine be one merveille de la nature; zee works, un chef-d’œuvre de l’art!” Je suppose to purchase be une chance rare. I purchase, but now, pretty soon—le diable! Zee brokaire man use zee expression to me, as follows: “More mud.” At zee first I not ver well comprehend. Sans doubte it be une expression, ver mysterieuse—zis exclamation: “More mud.” So many five, seex time have he, zee brokaire, desire of me some leetle more mud, zat now I mus make one grand sacrifice pecuniaire. It be now become scandaleuse! Parbleu, c’est horrible, cette “mud!” For me to communicate wis my brokaire—bah! it was one grand plaiser, Of de mine, des minerals I be plenty sick. Under de circonstances I read no more wis enthousiasme of—“Les compagnie’s certificat d’incorporation;” “la Pussy Cat Wilde, objet: Operations dans l’Etat de Nevada, etc.”—“Les directeurs sont: Bill Tubb, Sam Hobb, Jack Dobb, etc.” Capital social, $45,800,000,002; divise en 56,000,000,000,000,000 actions. Vraiment oui!—“More mud!” Pretty soon you hear one crash financial,—I gone bust—me! No more do I eat me my dennaire a de la restaurant du Poodle Dog, rue Duponte, but wis circomspection admirable I betake me to la cote de Barbarie, to zee Hell Kitchen—zee cuisine de l’enfer. Parole d’honneur monsieur, I be ver moche perplex wis zee stoke prices, He viggle up, he viggle down all zee time. Vill you have zee complaisance to inform me how soon he vill viggle high up and remain to pass some time up dare? “Mud!” le diable!—zee word have for me un signification sardonique!

Your tres-humble and tres-obeissant servant, PIERRE EDOUARD OUDIN.

In the winter of 1874-75, owing to the wonderful developments made in the Consolidated Virginia and California mines, there was a grand stock excitement throughout the towns of the Pacific Coast. San Francisco and Virginia City, however, were the two great centres of this excitement. As the vast and astonishingly rich deposits of ore in the California mine began to be drifted into and opened to view, the stock of the company rapidly and steadily advanced from about fifty dollars per share to nearly one thousand dollars. Consolidated Virginia stock advanced in about the same ratio, as in the mine of that company the width and richness of the ore was far beyond anything that had ever before been seen on the Comstock lode. In the Ophir mine, the next north of the California, large and rich bodies of ore were being opened, and the stock of that company advanced with almost bewildering rapidity. Persons who happened to have twenty, fifty, or one hundred shares in either of these mines suddenly found themselves rich. The investment of a few hundreds of dollars had brought them thousands, and the investments of thousands brought them tens of thousands of dollars.

The great strike in the “bonanza” mines started up the stocks of all the adjoining mines, and, indeed, of all the mines along the Comstock range. The stock of mines that were rich in “great expectations” only were as eagerly sought for and as briskly dealt in, as were those in which ore was already being extracted, for many said: “It is just as well for us to double our money in a stock that costs but one or two dollars per share as in stocks that cost from one to five hundred dollars.” And many did double and more than double their money in such stocks; indeed, in some instances they sold for five or ten times what their stocks cost them.

[Illustration: SCANNING THE BULLETIN.]

Every day there is a morning and an afternoon session of the San Francisco Stock Board, and the reports of the sales are telegraphed to Virginia City, Gold Hill and other Nevada towns as fast as the stocks are called. Thus, as soon as the Stock Board is in session and business begins, reports of sales begin to arrive in Virginia City and are placed in the windows or on the bulletin-boards of the various stock-brokers of the town, where all interested may see them. Therefore during a big stock excitement the bulletin-boards are the centres about which are seen large crowds of anxious dealers—and nearly everybody in the city dabbles more or less in stocks, women as well as men.

On very critical occasions, either when stocks are rapidly rushing or when they are rapidly “tumbling,” then is a grand charge made upon all the bulletin-boards as soon as it is known that the reports have arrived. Dry-goods clerks—yardstick in hand and scissors peeping from vest-pocket—come running out bare-headed and bald-headed to catch a glimpse of the bulletin; bar-keepers in their white aprons come; bare-headed, bare-armed, and white-aproned butchers smelling of blood, come; blacksmiths, in leather aprons and hammer in hand, flour-dusted bakers, cooks in paper caps cobblers, tinkers, and tailors all come to learn the best and the worst. The miner on his way to or from work, carrying his dinner-pail and candlestick, halts for a moment to see how fares his favorite stock, the teamster stops his long string of mules opposite one of the centres of attraction and, thrusting his “black snake” under the housing of his saddle-mule, marches to the board to read his fate. Ladies linger as they pass the groups at the bulletin-boards and try to catch some word of hope, or ensconce themselves in the nearest shops, and hence send messenger-lads to bring tidings of their favorite gamble.

Even the Chinese dabble in stocks. Some of these are able to read the reports for themselves, while others ask white men to tell them the price of the stocks in which they are dealing. There was an old fellow who, for a long time was dealing in the stocks of the Belcher and the Segregated Belcher mines. The Belcher he called the “big Belch,” and the Segregated Belcher the “little Belch.” Crowding his way up to a bulletin-board he would say to some by-stander: “How much-ee to-day catch-ee big Belch?” Being told, and finding the stock up, he would say: “Bully for big Belch!”

Next he would ask: “How much-ee to day catch-ee little Belch?”

Finding that stock a “little off” he would say:

“Belly bad! belly bad! Little Belch too much-ee all time, bust me up!”

In passing the bulletin-boards one catches scraps of conversation like the following: “Didn’t I tell you so? I have said so all the time.” “I saw a man this morning who is thoroughly reliable, and he says”—“Yes, it may be a buy, but, confound it, I get sold so often!”—“I knew they would all be up to-day”—“Now you raise the money; I tell you it is just as I say. I have points that”—“Dealing in stocks with these rings is just like playing poker with a man who knows both hands”—“They have it awful in the”—“They haven’t got an ounce afore in the”—“I shan’t sell yet. Stocks have only begun to go up.” “I wish I had sold yesterday.” “Well I have laid up my treasures above, where the bulls and bears can never come.”—The last speaker is generally a newspaper reporter or some other such holy person, who is seen standing aloof from the ungodly worshippers at the shrine of Mammon.

The amount of “stock talk” heard in every saloon, public-house and shop, and on every street, is at times enough to render an easy-going Granger from one of the eastern or middle States, to whom it is all Greek a raving maniac or a drivelling idiot. The sidewalks on C street, the principal business street of Virginia City, are generally so thronged that it is a difficult matter to pass along them, except at the same slow pace at which the mass of the pedestrians is moving; therefore at times when there is an excitement in regard to stocks there are frequent blockades in front of the offices of the brokers, and persons wishing to pass are obliged to take to the streets. At times the police are obliged to clear passages through the throngs, as men become so interested in their stocks as to have neither eyes nor ears for anything else, and ladies and children find themselves unable to pass.