The Bullfrog Rush incident cost the Sullivan Trust Company a little
less than $90,000, which was refunded to stockholders, and the
additional sum that was expended for advertising our denouncement of
the enterprise. Dr. Lyman was stripped of his entire investment in the
property. The newspapers lost many thousands of dollars, representing
Dr. Lyman's unpaid advertising bills. A number of mining-stock brokers
also forfeited some money; they were compelled to refund their
commissions.
J. C. Weir, the New York mining-stock broker, who does business under
the firm name of Weir Brothers & Company, had sold in the neighborhood
of 100,000 shares of Bullfrog Rush to his clients, and he took violent
exception to our decision not to refund an amount in excess of the net
price paid to us. He held that his firm ought not to be compelled to
disgorge its profits. We stood pat and argued that he ought to be proud
to share with us the glory of "making good" in such an unusual way to
stockholders. It was the first time in the history of Western mining
promotions that a thing like this had ever been done, and we pointed
out to Mr. Weir that it would gain reputation both for himself and the
trust company. For a period Mr. Weir carried on an epistolary warfare
with the trust company. For nearly two months he refused to yield.
Finally, we received a letter from Mr. Weir saying that since we
refused to come to his terms he would accept ours, and that he had
drawn on us for $4,500, with one lot of 10,000 shares of Bullfrog Rush
stock attached. On receipt of the letter I gave instructions to the
cashier promptly to honor the draft.
An hour later the cashier reported that the draft had been presented
and that an examination of the stock certificates showed that not a
single one of them had been sold by the trust company through Mr.
Weir's firm, and, in fact, had never been disposed of by the trust
company to anybody. A hurried examination of the stock-certificate
books of the Bullfrog Rush Company, which were in the hands of the
company's secretary in Goldfield, a clerk of Dr. Lyman, revealed the
fact that a large number of blank certificates had been torn out of the
certificate books without any entry appearing on the stubs.
The certificates returned to us by Mr. Weir bore dates of several
months prior, and our immediate assumption was that Dr. Lyman, at the
very moment when we were marketing the treasury stock under a binding
contract which forbade him or any one else to dispose of any Bullfrog
Rush stock under any circumstances, was clandestinely getting rid of
these shares. Mr. Weir, it appeared, had neglected to segregate Dr.
Lyman's certificates from those shipped him by the trust company.
Another hypothesis was that those certificates had never been sold at
all, but had merely been received from Dr. Lyman to be reforwarded to
us in order to claim a refund for what we had never been paid for.
Public-domain text, read in full here on John Shaqi.
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