BONAPARTES BIG STOCKHOLDERS.
There is also the case of an
important Indian army officer who went broke. The authorities gave him
first-class passage to Calcutta, and $250 expense money. He had lost several
thousands. As much as $2,500 has been paid out to a big loser so that he
could settle up his hotel bill and take himself and family home. Should such
money be paid back the Casino might again welcome the man. The sums usually
paid range from $25 to $200, and an average of 1,000 people a year apply for
this relief. The profits of the Casino are immense. Last year they
were $7,500,000, an increase of $760,000 over the previous year.
Seventy per cent was paid to the shareholders. The majority of the shares
are held by the Blanc family, the leading member of which is the
Princess Marie Bonaparte, whose father was Prince Roland Bonaparte, and
mother the daughter of M. Blanc, the founder of Monte Carlo. She is
the wealthiest princess in the world, and was lately married to
Prince George of Greece, who is an impecunious princeling and needs the
money.
PRINCE OWNS NO STOCK.
The prince of Monaco has not a
single share in the enterprise. But he derives his entire income from the sum
paid him by the Gamblers' Company for the lease of Monaco. The prince is of
especial interest to Americans, because of his American wife. She was Miss
Alice Heine of New Orleans. When she married the prince she was a widow, the
Dowager Duchess of Richelieu. The prince is a "divorced" man. He first
married Lady Mary, the daughter of the Duke of Hamilton and Brandon, and a
son and heir was born. But eleven years after the marriage the pair
were so unhappy that an appeal was made to the pope. The Catholic
church, of course, does not recognize divorces, but the pope issued a
special pronouncement declaring his 11-year-old marriage invalid, for
the reason that the Lady Mary's mother "over-persuaded her to
marry."
RECEIVES ENORMOUS INCOME.
The prince, in return for
the gambling concession, has been getting an annual income of a quarter of a
million dollars and all the expenses of running the State of Monaco,
including the maintenance of the army and the royal palace. He recently
granted a further contract to the "Monaco Sea-Bathing Company," or to give
the gambling concerns the full title "La Societe Anonyme des Bains de Mer et
Cercle des Etrangers a Monaco."
This concession now extends to 1947,
and the annual income of the prince has been raised $100,000. Every ten years
it will be raised an additional $50,000. In six years time the Casino will
also have to pay him a lump sum down of $3,000,000. It is stated that the
prince of Monaco is by no means in favor of the Casino, and that he abhors
the gambling and the consequent scandal in his state, and that could he
do so, he would at once stop it. But in the old original contract it
was agreed that the concession should be extended to 1947, and the
prince is not rich enough to break this contract and pay the indemnity
which the law would quickly assess.
GAMBLING KINGS GO BROKE; OFTEN
DIE IN THE POORHOUSE.
Some one has advanced the statement that every
human being is a gambler at heart. Yet for a man to go into the business
of establishing a card gambling house under modern conditions is
to attempt one of the riskiest businesses in the world. Recently one of
the most noted gaming-house keepers in the country seems to have suggested a
further anomaly in the situation in his utterance in a court of
record:
"When I conduct a house on a 10 per cent basis of profit it is
only a matter of time until my steady patron 'goes broke.'"
In the
face of this statement, however, the innocent layman may be still further at
sea when it is recalled by old habitues of the gaming table that nearly every
gambling king of modern history has finished close to the poorhouse and the
potter's field! How is it possible that the gambler with the insidious,
certain 10 per cent which inevitably wrecks the man who goes often enough to
the green table almost invariably dies in poverty?
MUST HAVE
FORTUNE TO INVEST.
Today it is the gambler king who at least has an
ephemeral show to gain fleeting riches. But in order that these riches shall
approach riches as they are measured in other businesses, the man who opens
the gambling house must have a fortune for the investment. His
outlawed business itself will make it certain that he pays the maximum
rental or the highest price for the property which he chooses for
occupancy. To sustain this he will need to seek out the wealthy patron who
not only has money to lose, but who may have a certain influence which
may tend toward immunity for keeper and player alike. The
"establishment" will need to have the best cuisine and the best cellars, with
palatial furnishings and a retinue of servants in full keeping.
And
somewhere money will be necessary in blinding officials to the existence of
an institution which is visible to the merest tyro in passing along the
street.
A constitution of iron, the absence of a nervous system,
the discrimination of a King Solomon and the tact of a diplomat
are requisites for the successful gambling king. Considering
the qualification of the man for such a place and the final ending of
the gambling king's career, it might be a sociological study worth
while to determine where, on a more worthy bent, such capacities in a
man might land him.
In real life, however, it must be admitted that
the gambler king is looked upon in exaggerated light. Almost without
exception the big gambler is posing always. Conventionality has demanded it
of him. But for more than this, in order to command the following which he
desires, he must have a certain social side which is not too prominent, but
which with tact and judgment he may bring out on dress parade. To the layman
the gambler is the dark, sinister figure pictured in melodrama. He bears the
same relation to gambling that Simon Legree bore to the institution of
slavery of fifty years ago.
STORY OF ONE GAMBLER KING.
One of
the noted gamblers of his time in this country passed from laboring on the
docks into the prize ring. When his ring work was ended the gambling house
was an easy step onward in illegitimate fields. On the docks his reputation
was not above a bit of "strong arm" work in separating a man from the money
which the dock walloper wanted. Naturally, under the Queensberry rules, there
were things in the ring which he could not do in overcoming an antagonist,
and he learned to make concessions to fairness--which was
education.
Opening a gambling house that was adapted to the wants of a
rich clientele, it was a necessity that he preserve this
educational regard for his patrons, and that he should add to it. Soon he
was in a position where it was imperative that his reputation for
fair dealing be kept intact. He became the "gentleman gambler" whose
"word" carried all the accepted concomitants of his gentleman's business.
In the course of events he attained a high legislative office under
the government. But it may be said for those who knew the man as a
man, not one ever ceased to regard him at heart as the dock walloper,
with the inherent and unreconstructed disposition to regard other men
as legitimate prey. Had other conditions and circumstances made a
card sharp of him, he would have held to the promptings of his
nature.
In the conduct of a gambling house of the first class, the
gambling king needs for himself and for his patrons the assurance
of uninterrupted play. Men of money and position will not go to a house
where there is menace of a police raid. The small gambler may subsidize the
policeman on the beat in which his house stands, but he cannot placate the
whole Police Department. And even when it is thought that the gambler king is
impregnable in his castle someone may break over the barriers and raid the
place in the name of the law and order.
[Illustration: (Gambler
passing card to partner by foot)]
[Illustration: (Man getting caught
passing card)]
Within a few years New York has given to the world some of
the inside working of the gambling business. When Jerome raided the place
of places which had been considered immune, the proprietor of the
house was considered worth a million dollars. Before the litigation was
done and the fine paid the gambler king was out $600,000, his
"club-houses" were closed, and he had been branded officially as a common
gambler, pursued in the courts for payment of lawyers' fees, which
he designated as outrageous and a "shrieking scandal." Yet this man was of
the type whose word had been declared as good as his bond.
DICE, FARO
AND ROULETTE.
Dice, faro and roulette are the principal games of the
gambling house and, considering these, the experienced player will tell you
that he is suspicious of a "petey" in the dice box, a "high layout" in
faro, and a "squeezed wheel" in roulette, in just the proportion that
the gambling house keeper has not recognized that he cannot indulge
them because of the fear of detection. The gambler holds to the
gambler's view of the gambler--and it is not complimentary to the
profession.
That the gentleman gambler is justified in his attitude
toward the gentleman player, too, has been shown in the New York
revelations. There one gentleman player, loser to the extent of
$300,000. compromised with the "bank" for 130 bills of $1,000
denomination. There a gentleman player who had lost $69,000 to the bank tried
to compromise on $20,000, but was in a position where the bank could hold
him. How much the gambler king may loan and lose in the course of a year
scarcely can be approximated. The gambling debt is "a debt of honor," and
even in business not all such debts are paid. Whether a borrowed debt or a
debt of loss to the bank, this honor is the security, unless in emergency the
gambler king discovers that he can blackmail with safety to his interests as
a whole.
In general, the gambler who is "on the square" operates on a 10
per cent basis for his bank. In addition there is the "unknown per
cent" which is his at the end of the year. The roulette wheel, for
example, presents to the player just one chance in thirty-seven of winning on
a single play, while the winning on that play is paid in the proportion of
only 34 to 1.
MORE NERVE TO WIN THAN LOSE.
The one great
characteristic in human nature on which the gambler counts is the fact that
it requires more nerve in a man to win than is required of him to lose! It is
startling for the layman to be told that $5,000 in a night is a big winning
for a player, while $5,000 is only an ordinary loss in a big
establishment.
This fact is based on subtle psychology. There are two
types of players, one of which gambles when it is in a state of elation
and the other when in a state of depression. With either of these
types winning, it is a gambler's observation that the man who will
play until he has lost $25,000 when luck hopelessly is against him
cannot hold himself to the chair after he is $5,000 winner.
Gamblers
have made money--fortunes--in times past, only to be buried in the potter's
field. There are several reasons assignable for this end. Extravagant living
appeals to the gambler, and when he has left his own special line of gaming
it does not appeal to him strongly as either pastime or means for recouping
his fortune. If he turns to gaming at all it is likely to be in fields where
he does not know the game. Sometimes he goes to the Board of Trade--sometimes
to the stock market. Playing there he is without system and without knowledge
of conditions. He is likely to bull the grain market two days after
the weather conditions have assured the greatest grain crop in
history.
Once a gambler, always a gambler, is his condition; and it is
only a matter of time until someone has a game which beats him
out.
IT'S UP TO YOU, YOUNG MAN.
There are two trails in
life, young man. One leads to height and fame, To honor, glory,
peace and joy, And one to depths of shame; And you can reach
that glorious height-- Its honors can be won-- Or you can grope
in shame's dark night. It's up to you, young man.
Stern duty
guards the upper trail-- Exact obedience, too-- And he who
treads it cannot fail To win if he be true. But tickle folly,
gay with smiles, Rules o'er the other one, And leads to ruin
with her wiles. It's up to you, young man.
At parting of the
trails you stand. At early manhood's gate; Your future lies in
your own hand-- Will it be low or great? If now you choose the
trail of Right. When you the height have won, You'll bask in
Honor's fadeless light-- It's up to you, young
man.
A HEARTLESS FRAUD.
SCHOOLS TO TEACH SHOW-CARD
WRITING CATCH MANY VICTIMS AMONG THE POOR GIRLS.
December 5, 1905,
J. H. Bell, the proprietor of a SHOW-CARD COLLEGE at 21 Quincy St., was
arrested and the place closed. Bell advertised for students to learn to write
show-cards and signs. He is said to charge $1 for a course and to promise
positions at large salaries as soon as the course is completed.
After
the course has been finished and the tuition paid Bell is declared to have
refused to give the graduates employment on the ground that their work is
unsatisfactory.
A great many girls are attracted to the scheme, and sign
contracts to pay Bell for the instruction in the belief that they will
be benefited. Bell tells them that he has customers who will purchase
all the cards they can make. They are to receive a few cents for each
card as soon as they learn the business, but they are required to pay
a fine of 2 cents for each card they spoil.
"They are set to work
painting gold borders such as are seen in the windows of the department
stores, but the task is so difficult that only a finished artist can do the
work. Bell has a woman accomplice who hustles into the office when it is
filled with women and girls and tells how she makes from $25 to $30 a week
painting cards. Her talk encourages the girls to keep on spoiling Bell's
cards and increasing his income.
SWINDLER JUMPS BAIL.
"When
taken before the court, Bell made a hard fight for freedom, but he was held
to the Criminal Court on five charges of obtaining money under false
pretenses. Bonds were placed at $300 in each case by Justice
Prindiville.
"He was unable to do the work he was requiring the girls to
do, so when the grand jury saw through his scheme the five indictments
were promptly returned.
"J. H. Bell jumped his bail, fled to
Minneapolis, where he conducted the same business. Here he was again
arrested, fined and given so many hours to leave the city."
Milwaukee,
Wisconsin, was the next place Bell opened his Show-Card College. On the 28th
of September, 1906, he was again arrested for operating a confidence game and
fined $80.
He then went to St. Louis, Mo., and opened an office in the
Century Building, under the name of the Clark Institute. Charges of
swindling women who applied to learn card-writing were made against him and
he was arrested, but later released through some technicalities set up in
the warrant of his arrest; also lack of evidence to support the charges made
in the warrant.
The newspapers published his swindling operations and on
this account Bell threatened to sue both the publishers and the police
officials.
Detective Wooldridge located him through an article which
appeared in the St. Louis paper, which gave a description of his
Show-Card College, which was being carried on there.
John M. Collins,
General Superintendent of Police, sent Bell's picture and his Bertillon
system of measurements to the Chief of Police in St. Louis, and requested him
to make the arrest. On the following day John M. Collins. Superintendent of
Police, Chicago. Illinois, received the following letter from E. P. Creecy,
Chief of Police, St. Louis, Mo.:
St. Louis,
Mo., Dec. 22, 1906.
JOHN M. COLLINS, ESQ.
Superintendent of Police, Chicago, Ill.
Dear
Sir:
Replying to your letter of Dec. 21, relative to J. H.
Bell, wanted in your city for obtaining money by means of a confidence
game, will say that W. H. Clark, office 354 Century Building, this city,
was in the Court of Criminal Correction this morning charged with
larceny by trick, and a _nolle prosequi_ was entered by the prosecuting
attorney. He answers the description of Bell and is undoubtedly
the same person, but I would suggest that you send someone to
identify him before the arrest is made, as he is making a fight here on
his case. Clark is carrying on the same kind of business here as he did
in your city.
Very respectfully, E. P.
CREECY, Chief of Police.
Detective Harry Harris of
Chicago was sent to St. Louis to identify Bell, and swore that in his belief
Clark was Bell. The detective department wanted the case continued until
Friday, but Clark insisted upon immediate trial. Judge Sale held that the
detective had not been positive enough in his
identification.
Detective Wooldridge arrived on the scene as Bell was
leaving the court room after being discharged the second time by the
court. Detective Wooldridge seized Bell and turned him over to a St.
Louis police officer and filed a new affidavit of positive
identification that Clark was Bell.
His lawyer demanded an immediate
trial, but Detective Wooldridge secured a two-day continuance to bring
witnesses from Chicago to prove the identity of Bell. This so enraged the
attorney that he turned upon Wooldridge and informed him that he would again
free Bell and even offered to bet $200.
He further stated that he had
asked Governor Folk not to grant requisition papers for his client. Detective
Wooldridge replied, "Do you remember Admiral George Dewey at Manila Bay who
told Captain Gridley to fire when he got ready?"
Wooldridge further
told him he didn't care any more for him than the dew that dropped on the
jackass' mane. Wooldridge told the attorney that Bell had defrauded over two
hundred working girls in Chicago, Illinois, and that the Cook County grand
jury had investigated the matter, and returned five indictments against Bell,
and the Honorable Charles S. Deneen, Governor of the State of Illinois, had
caused to be issued requisition papers for the arrest and apprehension of J.
H. Bell, and he had made Detective Wooldridge a special messenger to go to
St. Louis, Mo., and bring Bell to Chicago where he could be placed on trial
to answer to the indictments that had been brought
against him.
Detective Wooldridge stated that he had come three
hundred miles to perform that mission and he intended that Bell should return
to Chicago with him.
The attorney replied "he hardly thought the
Honorable Governor Folk of Missouri would grant requisition papers on
Bell."
Detective Wooldridge told the attorney that he came for J. H.
Bell and was fully determined to take him back to Illinois to stand
trial and that he would cross the bridges as he came to them and burn
them behind him. He told Bell's attorney if the Honorable Governor
Folk refused to grant the first requisition papers, he would try on each
of the other indictments asking for requisition papers.
If this failed
there was five forfeited bonds by which Bell could be brought back to the
State of Illinois on extradition papers.
If all this failed he had made
arrangements to have him brought back by the strong arm of the United States
Government, through an Inspector of Mails and United States Deputy Marshal
for using the mails for fraudulent purposes.
Wooldridge called up John
M. Collins, General Superintendent of Police, Chicago, Ill., by the long
distance telephone and requested the second set of requisition papers,
certified copies of the five forfeited bonds, and that the bondsman be sent
to St. Louis at once, which was done.
Thirty minutes after he left
Bell's angry attorney, Wooldridge was aboard a Missouri Pacific fast train,
bound for Jefferson City, Mo., to see Honorable Jos. Folk and lay before him
the reason why requisition papers should be granted. Arriving at Jefferson
City at 10 P. M., the following morning (which was Sunday morning) he made
a demand upon Jailer Dawson for the body of Bell. Jailer Dawson
referred him to Judge Sale. Wooldridge found Judge Sale at his home, who,
after examining his papers, found them all right and ordered the jailer
to turn over Bell to Detective Clifton R. Wooldridge.
Bell was again
brought to the office of the Chief of Police and confronted by Wooldridge and
Harris who arrested him.
When J. H. Bell was arrested in Chicago December
5, 1905, Mr. Turner defended him and afterwards went on Bell's bond for
$1,500. Bell was turned over to Wooldridge who slipped a pair of handcuffs on
him as he was boarding a street car, landed him in East St. Louis, Ill.,
none too soon, as Bell's attorney had sent out a writ of _habeas
corpus_ and would watch all trains and stop the detective from taking
Bell from the State of Missouri.
Wooldridge requested the Chief of
Detectives to inform Bell's lawyer that both he and Bell were now in the
State of Illinois and their address would be in Chicago, Ill., if he wished
to see either of them.
One of the police officers at East St. Louis
overheard Bell tell his cell-mate he would make his escape before he reached
Chicago, and told him to watch the newspapers the next day.
This
information was given to Wooldridge.
Detective Wooldridge had tickets
over the Chicago and Eastern Illinois Railroad.
This train left at 11
P. M. at night and the first stop it made was twenty miles north on the
Missouri side of the river.
Wooldridge could not take his prisoner and
board the train there on account of _habeas corpus_ writs for Bell. Officers
were watching all trains expecting him to leave St. Louis. Wooldridge
outwitted them by taking interurban street car, traveling some twenty-five
miles in company with two officers whom the Chief of Police had sent along
with him. Upon arriving at the station in a heavy rainstorm he found
the agent had deserted his post and gone home.
The headlight on the
Eastern Illinois fast express train showed up in the distance. What was to be
done to bring the train to a stop so that they could board it? At this
important moment Wooldridge's eye rested upon a switch lamp under a switch
only a few yards from him; with one leap across the track he secured the lamp
and began to swing it across the track to and fro with a red light pointed
towards the approaching train. This was a signal for the engineer to stop.
But would the engineer see the signal in time, or would the rain which
was beating down in torrents prevent the engineer from seeing the
signal? It was an exciting few seconds to pass through. But the
engineer did see the signal to stop, he blew one long blast of his
whistle, reversed his engine, applied the air-brakes which brought the train
to a stand-still right at the station door.
A conductor and brakeman
had alighted and run forward on the sudden stop of the train as they thought
some accident had happened, inquired of Wooldridge what was the trouble. He
replied, "Nothing but two passengers for Chicago." At this time he and Bell
were aboard the train. The conductor told Wooldridge that he had no right to
flag the train. Wooldridge told him that he had purchased two tickets to
Chicago with the understanding that the train stopped there to let on and off
passengers, furthermore the card stated that this train stopped there, and
arriving there he found that the agent had abandoned his post and gone home,
and he had taken it upon himself to act as station agent for the time being
and stopping a train. He told the conductor that he had to be in Chicago the
following morning as his business was urgent, furthermore he could not afford
to stand there all night in the rain without shelter because the station
agent had neglected to do his duty.
On gaining admission to the car
Bell was made comfortable: By turning two seats together he had two big
pillows on which he might rest his head.
Wooldridge then stooped down
and unlaced Bell's shoes so he could rest his tired feet, he then called the
porter and gave Bell's shoes to him with orders to shine them up and keep
them until the detective called for them next morning.
Wooldridge then
reached down into his traveling bag, took out a pair of leg-irons which he
placed around Bell's legs, and locked them securely. Bell made a protest and
assured the detective that he would not give him any trouble or make any
attempt to get away. Wooldridge told him the first law of human nature was
self-protection and he was exercising that precaution in this
case.
Only a few weeks prior to this time an officer was returning from
New York with a prisoner and neglected to take these precautions,
dosed off into a little sleep, the train had just then stopped to take
on coal, the prisoner only had handcuffs on, and in the twinkling of
an eye passed the officer who was asleep and succeeded in getting off
the train just as it started. His escape was not noticed by the
officer until they had gone several miles; it was then too late, the
bird had flown, and having money in his pocket found a man who filed
the shackles off his hands. He made good his escape and the officer
lost his job.
After Bell had been securely shackled and made as
comfortable as possible, Wooldridge turned two seats together on the opposite
side of the car, never closed his eyes until they reached Chicago
the following morning, taking Bell to the Bureau of Identification,
had his measure and picture taken. He was then turned over to Cook
County Sheriff.
A few months later J. H. Bell was arraigned for trial
and confronted by over thirty angry women, whom he had robbed, as witnesses.
After a long trial he was found guilty of obtaining money under the
confidence game. He asked for a new trial which was denied and on March the
9th, 1907, he was sentenced to Joliet Penitentiary for an indefinite
time by Judge Brentano. His counsel asked for the arrest of judgment so
he might have time to write up the record and present it to the
Then
the Bell luck, which could beat even detectives, broke Bell's way. Also the
Bell honesty suffered a recrudescence. It so happened that while Bell was in
the County Jail a plot was set on foot to make a big jail delivery.
It
was planned, and the plans seemed to have been well arranged, to smuggle
enough dynamite into the jail to wreck even that formidable building. The
plot was hatched by George Smith, Eugene Sullivan, Morris Fitzgerald and
Alfred Thompson.
On March 2, 1907, this precious crew had been arrested
for robbing a mail wagon. They were apprehended and taken to the County Jail.
There they hatched the plot for the introduction of the dynamite. Many
other prisoners were admitted to their secret, among them Bell.
Smith,
who was as big and powerful as Bell was little and insignificant, threatened
to choke Bell to death in his cell if he told of the dynamite
plot.
Bell's spirit appeared to be as big as the other man's body.
This may have been due to the fact that he saw that "peaching" on
his confederates was the only method of escape. Anyway Bell "peached." He
told of the dynamite plot and the dynamite was seized. Dr. J. A. Wesener
afterward declared that there was enough of it to have destroyed the whole
building.
It was so undoubtedly true that Bell had been of service to the
state in revealing this plot that a plea for clemency was made for him
and so he escaped the penalty for his crimes.
But the experiences of
Bell, and the fear of Detective Clifton R. Wooldridge had the salutary effect
of putting a stop to the "Show-Card Writing" fraud in
Chicago.
THE BOGUS MINE.
$100,000,000 EACH YEAR LOST
BY INVESTMENTS IN FAKE MINING SCHEMES.
To what extent investment
swindlers have operated in Illinois will never be known, for some of them
have so thoroughly covered up their transactions that it will be impossible
to disclose them. This is especially true of a class of mining companies, the
promoters of which remained in the background while their dupes were
gathered in by seemingly respectable residents. These concerns operated
by giving blocks of stock into the hands of unscrupulous men with good or
fairly good reputations, and the latter disposed of it to
such unsophisticated acquaintances as could be easily gulled.
Gold and
silver mines in Colorado, Nevada, and Utah furnished the basis for most of
these swindles. Sometimes the company really had an old mine or claim that
had been abandoned, sometimes it had a lease on some worthless piece of
property that was "about to be developed," but frequently it had nothing more
than its gaudy prospects and its highly decorated shares of stock to give in
return for the money it received. Money-grasping church deacons were the
favorite agents for these swindles and widowed women without business
judgment their most common victims.
It is estimated that in this
country every year nearly $100,000,000 are taken out of the savings of people
of limited means by financial fakers, especially mining and oil fakers.
During the last five years Detective Wooldridge has observed the
"financiering" of several thousand fake companies, each of which secured a
great deal of money from ignorant people.
Bands of swindlers repair to
mining camps and establish branches there. They expend a few hundred dollars
for shreds and patches of ground void of present or prospective
value.
They then form a mining corporation, place its capital stock at
some enormous figure--a million, two or three million
dollars--appoint themselves or some of their confederates, or even their
dupes, directors, and sell the worthless claims to the company for a
large proportion, or perhaps, all of the capital stock of the
company.
The stock must be disposed of with a rush. It must all go within
a year or shorter time. When it is gone the suckers who get the stock for
good money may take the property of the company. They always find an empty
treasury, worthless claims, and the rosy pictures that led them astray,
smothered in the fog.
During the last five years the advertising columns
of leading newspapers have been full of offers of mining stocks as "sure
roads to fortune." Nearly all of these mining companies, into whose
treasuries the public has paid millions, have either been abandoned or
the properties have been sold for debts, and invariably they bring
very little. The major portion of receipts of these companies from
the sales of stock is stolen by their promoters.
Official statistics
of the mining industry show that out of each one hundred mines, only one has
become a success from a dividend-paying point of view. About five earn a bare
existence, while the balance turn out utter failures.
PROMOTER'S
WORD VALUELESS.
Investors will do well to consider that stocks of mines
which are only prospective are the most risky form of gambling. In
buying stocks of the undeveloped mines offered to the public on the
strength of statements the only substance of which is the imagination
of promoters, one runs up against a sure-thing brace game.
Don't take
the promoter's word for it. When you wish to place money where it can work
for you, don't bite at the first "good thing" you see advertised. It is to
the interest of the man who wants to sell you stock to place it before you in
the rosiest light. Otherwise he knows you would not buy it. If you want to
buy stock, don't rely upon what the seller says, but consult
others.
Before consulting persons whom you think may be able to express
an honest and intelligent opinion, ask the promoter to furnish you
a statement of the condition of the company, showing its assets
and liabilities, profits and losses, and an accurate description of
its property.
You will then be able to judge whether the company
is over-capitalized; whether it is incumbered with debts (for debts
may lead to a receivership), and if its earnings may lead to
permanent dividends.
Also ask for a copy of the by-laws of the
company. If, with such information at your disposal, you cannot get a correct
idea as to whether the stock is desirable or not, consult your banker or
somebody else in your community who may be able to advise you.
If some
one offered you a mortgage on a certain piece of property, common sense would
tell you to ascertain whether the property is sufficient surety for the loan,
or if the title to the property is good and there are not prior incumbrances
on it.
The man who would buy a mortgage without ascertaining the value
and condition of the surety, would be considered an idiot.
Why not use
the same precaution when buying stock? Don't believe what the promoter tells
you about the value and prospects of the stock he wants to unload on you.
Don't take it for granted the stock offered you will turn out a great
money-maker and dividend-payer because the promoter tells you so.
The
promoter, generally a person from another city and entirely unknown to you,
has no interest in you, but is prompted by his own selfish interest to sell
you something which, in many cases, he himself would not buy. He may Offer
you a good thing, but it is up to you to find it
out.
INVESTIGATION NECESSARY.
In most cases, an intelligent
investigation will prompt you to let alluring offers of great wealth for
little money severely alone. The observation of the common-sense rules
outlined above will save investors bitter disappointments and heavy
losses.
It is safe to say seventy-five per cent of the so-called
"Mining, Plantation and Air Line" schemes and "Security" companies now
paraded before the public in flaring advertisements in the daily papers,
and through glittering prospectuses sent through the mails, are
vicious swindles. Men who operate these frauds pretend to be honest
and high-minded. By constant practice of their wiles upon others
they develop self-deception and come to believe in their honesty to such
an extent that when questioned, they assume a good counterfeit of
honest indignation.
Most of them do not own the furniture in the
offices they occupy while swindling the public. It is a common practice for
them to rent offices in national bank buildings and to furnish them with
rich furniture bought on the installment plan, to make the
necessary "front." They spend their cash capital for flaring
advertisements, sell as much stock as they can induce the gullible public to
buy, and then decamp, leaving unpaid bills for advertising, if they
can get credit after their cash is exhausted, and their furniture
bill unpaid. The absconding swindler is usually succeeded by an "agent"
or "manager," who repudiates the bills against his rascally
predecessor and continues the work of fleecing the gullible under some new
title or by means of some new trick.
KEEP LISTS OF
SUCKERS.
Every well-equipped fraudulent concern acquires the names
and addresses of susceptible persons. Painstaking revisions of the lists
made up of these names and addresses form an important part of the labor of
the principals or employes. The lists grow as each advertisement brings
inquiries from persons who, either through curiosity or desire to invest,
write for particulars. Affiliated swindles operated in succession by a gang
of "fakers" use the same list of "suckers."
In affiliated swindles if
the "sucker" does not succumb and remit his money on the inducements offered
by one concern, his name is transferred to the lists of another, and he is
then bombarded with different literature. Thus a man must pass through the
ordeal of having dozens of tempting offers made him before he demonstrates
that he is not a "sucker," or has not got the money. His name is
then stricken from the list.
There are so many "get-rich-quick"
operators at present that competition between them has become strenuous. They
are now infesting the entire country with local solicitors, who frequent
saloons, hotels, and even residence districts, where victims are found
in foreigners, ignorant servant girls and inexperienced widows.
These
solicitors get 50 per cent commission on all sales of stock. This fact in
itself is evidence that the propositions are rank swindles. When the
swindling operator finds things getting too hot he disappears from his office
and bobs up in some new place with a new proposition.
PECKSNIFFIAN
TEARS DELUDE.
A few attempts have been made to prosecute the swindlers,
but for the most part the local officials have failed. In but few instances
have the victims been able to give anything like intelligent statements
of the representations made to them. Where the right sort of agents
have been used the people who have lost their money have not awakened
to the fraud passed upon them. A few Pecksniffian tears have deluded
them into the belief that the swindlers as well as themselves were
victims of some third party who is in another state and out of
reach.
Where cases have been brought to trial it has been a difficult
matter for juries to understand how the persons aggrieved could have
been caught with the sort of chaff thrown to them, and there has
been little disposition to show charity for the victims. Then, too, the
men hauled before the courts have always made it appear they were in
the same boat with the complaining witness, and that the culprit was
many, many miles away. So, usually, they have escaped.
DIFFICULT
TO CONVICT.
Even in the most flagrant cases and where every advantage was
taken of the ignorance, inexperience or trustfulness of the person
deluded it has been difficult to bring the offense under the state
statutes. It requires more than ordinary misrepresentation and lying to
make out a criminal case, and under the rules of evidence which prevail it
is almost impossible to overtake a cheat who has not put
his misrepresentation into writing or made them in the presence of
third parties.
Where the swindlers have used the mails, however, it is
not such a difficult matter to convict. The United States is
scrupulously jealous of its postal service, and under its statutes every
fellow who undertakes to utilize it for improper purposes can be brought to
book. He can not hide behind some one in another state, for the
federal jurisdiction is general and the other man can be brought in. Nor
can he plead that the business was legally licensed in another state,
or that its incorporation was regular. If it was a cheat and the
mails were used in furtherance of its design, no corporate cloak
thrown around it by any of the commonwealths can save the
promoters.
POWER OF UNCLE SAM.
An example of the power of the
federal authorities was given when Secretary of State Rose of Illinois was
trying to keep the swindling investment companies out of the state. This was
before the enactment of the present law regulating the licensing of
corporations. A number of concerns had been formed in southern states, and
they were insolently demanding licenses to do business in Illinois.
The secretary of state was powerless under the Illinois statutes, but
when the matter was called to the attention of the federal authorities
they wiped out the whole lot of companies with a postal fraud
order.
WOOLDRIDGE FINDS SMOOTH SCHEME.
Detective Wooldridge,
in looking into many of these mining frauds, discovered one or two which
proved quite a revelation even to the United States authorities. This was a
system of "kiting" stocks, just as other fraud concerns have been known to
kite checks. The method is very simple. |
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