June 15, 1914:
North Carolina Good Mine Exploited on U.S. Senate Paper; Senators Chilton and Overman Among the Stockholders…Committee Letterheads Used in Promoting $5,000,000 Gold Hill Property…Federal Assayist is Used as Investigator…J. Skelton Williams Cited as Friend of Promoter Walter G. Newman…Latter Has the Entrees at Capitol Offices…He is President of Company Whose Stock Sells at 50 Cents—Its Par is $5
Washington, June 14—If you happen to have received a communication on the official letter paper of the Senate Committee on Census, William E. Chilton of West Virginia, chairman, painting the rosy prospects of a North Carolina gold mine, it is due to a mistake.
Further, if you have been favored with an identical communication on the official letterhead of the Senate Committee on Rules, Lee S. Overman of North Carolina, chairman, it also is the result of a mistake.
You can take the words of Senator Chilton and Senator Overman for that. While acknowledging an interest in the mining venture, both disclaim personal responsibility for the extraordinary use of the official stationery of the Senate committee. They say that their clerks were to blame.
But the appearance of these letters among curb brokers in New York had a somewhat spectacular character and in other quarters has brought to a definite foundation stories which have been circulated in Washington for some time that a section of the Senate and others in Democratic officialdom were in the throes of an incipient gold fever; that dreams were being dreamed of fabulous fortunes to be drawn from the bowels of a North Carolina mountain; that senators were letting their friends in on the good thing; that clerks and pages who were fortunate enough to get an inkling of this short cut to “easy street” were withdrawing their money from the banks to buy stock, and that all were basking in the sunshine radiated by one Walter George Newman, a promoter, who has had something of a record in mining ventures.
J. Skelton Williams’s Part
In this Democratic gold movement John Skelton Williams, Comptroller of the currency, has played a humble part.
Mr. Newman says Comptroller Williams is a warm friend of his, having gone to school with him, and Newman has been a frequent visitor at the comptroller’s office. That, however, is an unimportant detail. A more interesting fact is that Mr. Williams, when he was Assistant Secretary of the Treasury, had the chief expert of the United States Assay Office go to North Carolina at the Government’s expense and investigate the Newman gold mine.
Some of the Democratic Senators availed themselves of the results of that visit, but it should be said that the report made by the experts, though not entirely unfavorable, was hardly as rosy as the representations that had been made.
Officials of the Treasury Department say it is very unusual, but not irregular, for the Government to send a man out at its expense to investigate a privately owned gold mine. Mr. Williams says he was moved to send the expert solely because the question of the reopening of the United States assay office at Charlotte, N.C., had come up and he desired to ascertain whether or not there had been any development in gold production there that would require such an important step. The report of the expert, in Mr. Williams’s opinion, did not justify such a move by the Government.
Senator Overman’s Activity
Senator Overman, as Treasury officials recall the incident, was the man at whose request the reopening of the assay office and the investigation of the mine were taken up. All these incidents would, of course, pass unnoticed were it not for the unfortunate double headed mistake, which has resulted in the sending out of the letters on the official stationery.
The mining property that has aroused so much Democratic enthusiasm is that of the Gold Hill Consolidated Company, whose mine is at Gold Hill, Rowan County, N.C. This company is the successor of the old Gold Hill Copper Company of lamented memory. The latter is described in the Copper Hand Book, a recognized authority on such matters, as a “notorious promotion that caught any Wall Street operators” but that is merely a matter of history.
A new company has been organized with Walter George Newman as president, and with an authorized capital of $5,000,000, par $5 a share. The letter sent out on the Senate committee’s stationery is signed by “J.C. Williams, economic and mining geologist.” Mr. Williams is not listed in the American Institute of Mining Engineers, so far as could be ascertained here.
As Mr. Newman, the promoter and owner of a majority interest in the property, understands it, Williams was sent down to Gold Hill at the instance of Senator Chilton. Thereafter the mining engineer wrote a letter to the Senator, which has been reproduced by mistake on the official stationery of the two Senate committees and fallen into the hands of stock brokers.
Letter to the Senator
The letter to Senator Chilton reads, “Dear Sir: After spending some 30 days on the Gold Hill property and feeling you may be interested in what I may know and believing about the property, I write you this condensed information.
I have gone over the property of the Gold Hill Consolidated Company very carefully, both on the surface and through the mine down to the 800 foot level. After examining seven veins from 2 feet 6 inches to 12 feet in width, sampling and assaying them, I must say I see greater possibilities in the Gold Hill property every day.
My first opinion is fully confirmed and the veins will go to much greater depth than the 800 foot level and carry high values in gold, silver and copper. The copper veins alone will pay all expenses and show a handsome dividend, leaving the gold and silver clear.
After comparing the Gold Hill property with other mines and mining properties which I have examined in both the United States and Canada, on which valuations have been fixed, I would say I believe that $60,000,000 valuation on the Gold Hill property a conservative estimate. Yours very truly, J.C. Williams, Economic and Mining Geologist
Just now this letter has been reproduced on the official paper of the Senate committees is shown by photographs of the documents themselves. Each is plainly marked “copy” and both Senator Chilton and Senator Overman believe that that fact alone is sufficient to indicate that the committees as such and the other individuals whose names appear on the letterheads had nothing to do with the mining project.
Some Senators Hot
Some of the Senators whose names appear on the papers take a different view and are inclined to be hot over it. For instance, in the upper left hand corner of the Census Committee’s letterhead is the name of Robert M. LaFollette, also that of Senator Albert B. Cummins of Iowa, who has some decided views n the question of Government supervision of the issuance of the stocks and bonds.
Mr. Cummings has been favored beyond any other Senator through the mistake made in the offices of Senators Chilton and Overman. His name appears on both letterheads, as he is a member of the Committee on Rules as well as the Committee on Census. He had never heard of the Gold Hill Consolidated Company until he saw his name on one of the letterheads bearing the engineer’s report.
Other Senators whose names appear on the official paper of the Census Committee are Henry A. DuPont of Delaware, George P. McLean of Connecticut, Charles E. Townsend of Michigan, Republicans, and Atlee Pomerene of Ohio, Morris Sheppard of Texas, Benjamine F. Shively of Indiana, John R. Thornton of Louisiana, James E. Martine of New Jersey and William H. Thompson of Kansas, Democrats, and Henry Fry, clerk of the committee.
….
Mine With a Long History
The Gold Hill, North Carolina, mine is one with a long history. Before the civil war, it is said, several millions of dollars were taken from it. Like most North Carolina mining ventures, however, it has had a checkered career. The Copper Handbook describes it as the largest gold producer in 1845 in the United States. The Copper Handbook adds:
“The mine was operating in 1913, crosscutting on the 270 foot level to cut the Newman vein already opened on the 800 foot level. Shipments to the Perth Amboy smelter returned 1.5 per cent. copper and about $3 gold per ton, with small silver values.”
For a considerable period, the mine was involved in litigation and at one time was flooded. Newman contends that after pumping it out and cross-cutting it he made discoveries which warrant his present rosy representation. He asserts, also, that he has added materially to the plant recently.
Newman himself is president and the directors as given in the 1913 reference books were Edward H. Swan, William P. Woodbury, Woodruf Leeming, Charles F. Stacy, J.C. Kemp and W.F. Lanigan.
Walter George Newman, president of the Gold Hill Consolidated Company, has had a spectacular career. From a sailor before the mast, he became captain of a vessel, travelled around the world and then, coming to New York, became a clerk in the office of Roswell P. Flower.
It is said that his first tip came from Gov. Flower and that he netted $15,000. He was soon worth a fortune. He has won and lost several fortunes in the Street.
Sometimes he calls himself Baron Newman. Three years ago, when Sig. H Rosenblatt & Co., Brokers, failed disastrously, Newman was wanted as a witness in the bankruptcy hearings. Rosenblatt, the Stock Exchange member of the failed firm, had been suspended as a result of the bankruptcy.
Process servers kept watch on Newman’s office at 1 Wall street for weeks and finally learned that Newman was in Hoboken. Newman was discovered as Baron Jones in a hotel there. He was served with a subpoena but failed to appear at the hearing.
A year later Newman was arrested for contempt in having failed to obey the subpoena. He was committed to Ludlow street jail, but he didn’t stay there long.
According to the attorney for the failed firm, Newman had sold to Rosenblatt much stock in the Union Copper Mines Company, and the firm failed because the stock was not marketable.
Newman’s adventures outside of Wall Street have attracted much attention from the newspapers. Ten years ago, he had two women arrested on Fifth avenue charging that they tried to steal his $1,000 watch. In making the complaint he gave the name of his private secretary, but the next morning he said he had done this to avoid publicity.
Back in 1910 he appeared in Roanoke, Va., according to newspaper clippings with a disabled automobile. He offered $1,000 for a new cuss word which would fully express his feelings to the automobile. He dressed up a negro valet as a minstrel man and used him as a trumpeter on the automobile, instead of using a horn. Newman insisted on paying double rates at the hotel.
A short time later Alexander Low, a curb broker, sued him for $1,052 for services. Low got judgment by default and the execution was returned unsatisfied. Low’s attorneys obtained an order for Newman’s examination in supplementary proceedings. Newman appeared for examination, waited for a while and then jumped to his feet.
“Say,” he exclaimed angrily, “I can’t wait here all day. Good-by.”
And he rushed from the room.
His first wife was Miss Leila Moore, a cousin. In 1905 she sued for divorce, and after she won her suit she was married to a man who had been Newman’s stable boy. Newman married again.
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d Hill Consolidated Soared and Then Tumbled
The letters on Senator Childton’s committee papers began to appear among the curb brokers early last week, and it was not long before a score of brokers had them.
It is hard to say just how the letters appeared, but if a man wanted one all he had to do was to apply at the office of the Gold Hill Consolidated Company, 30 Broad street, and a copy of the letter, on the same paper, would be handed to him. At least one office boy applied for and received a copy of the letter.
Gold Hill Consolidated has had almost as many ups and downs as Walter George Newman, the company’s president. The company formerly was called the Gold Hill Copper Company, and although the stock had some market on the curb it was never a strong success for the investors.
Then about five years ago those in charge of the company’s affairs decided to reorganize it. The name was changed to Gold Hill Consolidated Company and the old stock was recalled. Receipts were given for the old stock on a basis of a receipt for 50 shares for a certificate of 100 shares.
Soon after the company had been changed, and while the former stockholders were in possession of their receipts, the new stock began to appear. The company was capitalized at $5,000,000, broken into 1,000,000 shares of $5 par.
A fine market was created for the new stock on the curb. At first those who sold it parted with it at about $2 a share, but the demand was soon so great apparently that they demanded more. The price soared and soared, until those who were in a position to sell were getting $7 a share for the stock.
But the stockholders in the old company with their receipts were unable to take advantage of the fine prices offered. They didn’t have the certificates to sell, and they couldn’t sell their receipts. Thousands of shares of stock changed hands and then the market price changed. It didn’t sag; it tumbled down from $7 until it was quoted at 10 cents a share.
When the price struck the bottom, the old stockholders got their nicely engraved certificates in exchange for the receipts that they held. This was last July, after these receipts had been out for four years.
The stock now sells occasionally for 50 cents a share.
