Jasper County Democrat, Volume 4, Number 7, Rensselaer, Jasper County, 25 May 1901 — LIKE FLEECED LAMBS. [ARTICLE]

LIKE FLEECED LAMBS.

CONDITION OF MANY INVESTORS IN TEXAS OIL STOCKS. Vhe Big Companies Can Be Depended Upon to Control the Ontpnt—An Immense Amount of Stock Sold Which le Probably Worthless. ' The oil craze in Texas has subsided to such a degree as to cause many people to look into things in a practical manner, and the outlook to the great majority is not very promising. Fortune* made and more will be made, but tlie small investors will have to pay for them. Among this class are the thousands of widows, seamstresses, clerks, children and domestics. They have poured their savings into the treasury of some one or more of the speculative oil companies and have had visions of great and expected quick returns. They are sure to be disappointed. Experiences of others in the past in chasing wildcat schemes held forth no lossous or warnings to t 111’ in., Nearly :>INI "oil companies" have been organized in Texas duriug the past month, says a Beaumont correspondent, aud it is estimated by a prominent promoter that I*o per cent of them will never pay a dividend. About 10 out of every IIMI have something bordering on the substantial to offer to the public* in ill* way of a speculative investment, but tin- others have nothing more titan a little tract or two of land, bought for a song, which is situated somewhere iu eastern Texas, and around which no effort lias ever been made to find oil. They may strike oil, no one can tell anything about that, hut their chances are small, and if they ever do their stock has been watered until no oil well in the world could pay interest on the investment. The promoters, however, come out all right, for they get big cash bonuses out of tlu- treasury from the funds realized from tlie sale of stock, so it does not make very much difference to them whether oil is struck or not. Then, there are tlie heavy salaries of the officers to lie paid all tie- time the stockholder, is waiting for the well, if any is ever bored, to get down far enough to even hope for oil. In the meantime it is probable that tlie small investors ais working and saving so as to be ready to grasp at some other "bubble’’ which may be formed from speculative soapsuds. Facts and Figures. It must be remembered that the great majority of the small investors are represented in the small companies. The big companies, the ones which will make the money and control the. output, are owned by the people who have plenty of money and do not find it necessary to advertise their’oil stock for sale. Now. a first-class gusher in the Beaumont field has been selling for $ 1,250,000. It will require another mitlion for pipe lines mud tankage and a quarter of u million for otiier expenses before fuel oil markets have been opened up. If the gushers would continue to gush as they are now doing everything would be profitable to the owners, but sooner or later the pumps will have to be applied and then dividends will decrease. Even then it might l>e possible to pay interest on the investments of tlx* big companies, but the prospects of the smaller ones are exceedingly gloomy. Most of the other companies nre capitalized from $200,000’ to $1,000,000. Their stock is sold way below par and when the promoters get through with the treasury funds but little is left for development purposes. Should these small companies strike oil and should the flow average 100 to 200 barrels a day, which would be a big well as wells go, the question then arises what would they do with the product 7 The big gushers, even after the pumps are applied, will supply nil the fuel oil for which there is a market for many years to come, for it will be a long time before coal will l>e generally supplantej. The gusher companies will be amply provided with pipe lines and tankage aed the smaller companies will be completely at their mercy, even granting that some one big concern does not come iu and secure control.