HIGH FINANCE: Uranium Strike?

• Share

On sale in Wall Street last week was an over-the-counter stock with an impressive name: American-Canadian Uranium Co., Ltd. Even more impressive were the company's top officials. The president was white-haired, handsome Paul V. McNutt who, as War Manpower Commissioner and High Commissioner to the Philippines, was a king in the New Deal deck. Vice President was Josiah Marvel Jr., onetime Ambassador to Denmark and recently appointed by President Truman to the International Claims Commission. McNutt, Marvel & Co. hoped to sell 500,000 shares of American-Canadian stock at $3.50 apiece (par value: 10¢).

But New York State's Attorney General Nathaniel Goldstein looked behind this impressive front to see if the state's security laws were being violated. What he found caused him to run up a danger signal for would-be investors. Two of the company's chief stockholders and promoters, said Goldstein, had police records. One was Maurice E. Young, who was convicted and jailed 20 years ago in Canada for stock manipulation. The other was Joseph H. Hirshhorn, twice convicted and fined "for violating the foreign-exchange laws of Canada."

Young and Hirshhorn, Goldstein said, had come into the McNutt company by virtue of a deal with a Canadian company called Pax Athabasca Uranium Mines, Ltd. which Young and Hirshhorn control. Last summer they swapped the company's Saskatchewan land claims for 1,800,000 shares of American-Canadian. News of the swap, said Goldstein, had sent Pax Athabasca's stock soaring (recent price: $28 v. 5¢ in 1949). Counting the shares in American-Canadian Uranium held by Pax Athabasca, said Goldstein, insiders owned 83% of American-Canadian's stock. All told, they had put up $90,000, or an average of less than 4¢ a share.

To market American-Canadian's stock, a new company called First International Securities Co., Inc. had been set up. On an investment of only $10,000, said Goldstein, First International Securities stood to make a $250,000 commission if all the stock was sold.

Goldstein granted that American-Canadian had called its stock a "speculation" in its registration statement filed with the Securities & Exchange Commission. Said he: "It is certainly a speculation—on the public's part only. If an important strike were made the insiders could cream off 83% while the public was getting 17%."