Canada at War: ONTARIO: Paper Gold Rush

The supply of suckers seemed unlimited. The Toronto Stock Exchange roared with a record trading in penny gold and oil stocks.

One stock, Quemont gold and copper, was selling for 30¢ a share on March 6. March 7 it closed at $2.98. Last week it hit $8.50. A Chinese laundryman, who bought 10,000 shares in 1942 for two cents a share and sold when the stock reached a dollar (profit: $9,800) could have bought every Chinese laundry in Toronto if he had waited a few days more.

Some of the penny stocks, like Quemont—whose mine in western Quebec has yielded high-assay ore—have genuine mines behind them. But the only claim of some is that they are located next door to something good, and many of the promoted properties do not even exist.

Patter & Protests. Ever since 1934, when the Securities & Exchange Commission clamped down on razzle-dazzle bucket-shop operations in the U.S., more & more high-pressure share-pushers have hung out their shingles in Ontario, where securities legislation is liberal. Well aware that war wages have burned new holes in many pockets, these "wheedle whackers" have lately stepped up their blitz.

Every part of the U.S. and Canada is now being teased—by mail, telephone and telegraph—with their slick promotion patter: "unusual opportunity" . . . "quick profits" . . . "get in on the ground floor." Discharged servicemen, who get lump-sum mustering-out pay, are given top priority; a Buffalo, N.Y. ex-serviceman began receiving tip sheets from Toronto within a few days after a Buffalo paper printed his picture.

Many a U.S. state has issued cease-&-desist orders against Toronto firms; Pennsylvania has issued 33. The Michigan Securities Commission last fortnight banned a half-dozen Toronto firms from dealing in the state. Nova Scotia's Government formally warned against Toronto's "fly-by-night" stock peddlers.

Said Mining Reporter Sidney Norman of the Toronto Globe & Mail: ". . . about the only possible thing to do is to pass a law compelling would-be [speculators] to submit to mental tests."