El Paso Sunday Times (El Paso, Tex.), Vol. 27, Ed. 0 Sunday, November 3, 1907 Page: 13 of 22
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V
EL PASO MORNING TIMES, SUNDAY, NOVEMBER 3. 1907.
Some Famous Frauds
Within the last few years public Lwhom he broached his plan under
attention has been called to several ,Plrt*p of secrecy gave him *10 each.
•tiuhonoc. «_____ , .. - . Sura enough, when the week ended
dishonest financial schemes of great ^ tnvpstor a dollar as his
magnitude, and the Impression has nrst dividend. Each of the original
grown that the business world of investors was now permitted to in-
Amtrlcn has fallen to a lower ethical ***** hiB own investment and to
r.o
tot> shows dishonesty Is endemic, for a large projiortlon of Miller's cub-
‘ tenters were ih rfectly aware of the
character of the enterprise—they seut
in their money. The first week Miller
took in less than *lttti; the second
though it becomes epidemic when con-
ditions are favorable. After the ex-
lKisure of a series or Chadwick cases
and Miller syndicates people begin to,
think that all fraud has been rooted j Week it was *500; the third week *3,-
up. Doubtless the collapse of the Car-|000. and so the snowball grew
tliage Ivorv. Slave and Exploration , It was a veritable blixznrd of ten-
company astonished the Phoenicians ; dollar bills. The money arrived so fast
and convinced them that the world that frequently the only record of the
never again would Ire deceived in such
tt manner, and probably the Greeks felt
the same way about the Atlantis Gold
and Land Exploitation syndicate.
There has never been an age without
Its Chadwicks ami Millers.
Moreover, one scheme begets anoth-
er. The *r.O.«Od,POn South Sea Hubble
of nearly 200 years ago not only swal-
lowed up the savings of rural and ur-
ban England, but suggested the Mis-
sissippi Scheme, which cost the French
people no less than *100,000,000.
Franklin Syndicate in Brooklyn (1899).
Miller’s 520 per cent, syndicate waR
day was tlte total receipts. The money
was tucked away anywhere; there
were waste paper baskets full, of It;
bureau drawers were so stuffed that
they could not lie closed. Anybody
opening the door on a blustering day
man s bank In Boston. She was elder-
ly, deaf, and unamiable. but had no
trouble In making women believe that
she was the agent of rich and benevo-
lent Quakers, who, destring to help
widows and spinsters of limited means,
proposed to pay them 8 per cent quar-
terly. in advance, on deposits of not
less that! *3»0 nor more than tl.Obrt.
Dcitosltors came in such numbers that
she had no difficulty in paying interest
out of the iucomtug stream until she
bad garnrred *350,000. She operated
for three years before the police closed
her bank and sent her to prison
Promptly on the expirattou of her sen-
tence, three years, she opened anoth-
er bank in Boston and carried on her
old business until she ltnd *50,000;
then she disappeared.
Not long afterward she appeared
In Chicago where as "Mrs. Rimer" she
conducted a bank in the business sec-
tion and advertised that the “Ladles
Provident Aid" would pay seven dol-
lars interest a month on deposits or
one hundred dollars. She escaped from
Chicago with her plunder, added to it
in New Brunswick and returned to
Massachusetts in 1888, but the police
broke tip her establishment almost
as soon as it opened its doors.
Her transactions were so near to
saw a whirlwind of greenbacks dis-
tributed by the breeze, and while Ute; rPn) banking ;hat, though "frequent |v
clerks shouted at the Intruder to shut arrested, she was never convicted af-
the door the office lioy regathered the i (P|. ,he first experience. In all she
bills that were scattered about like i mils( havP rPali*«‘d nearly a million
autumn leaves. More tlian *1,250,000, j dollars bv her frauds, but she spent It
mostly iu small bills, was received in ! us fas, ut) s)lP madp |t> amt when she
that bouse tiefore the end.
Little Miller, so obscure
at least 300 years old In Idea. In the : months before, was now the most con-
time of Elizalieth It was operated sue- ] splcuous figure In Williamsburg. He
cessfully in England, though the Ira- j frequently, dashed Into the drug store
moderate dividends were supposed to]on the corner to telephone. While
lie paid from the plunder of mythical i the admiring and envious neighbors I
privateers. Instead of fictitous Invest- looked on and listened. Miller, with*
inents in stocks. So large were the;a-total disregard for business privny,
dividends and so glowing the promises
that the shares rose to tremendous
values. They were, of course, paid
out of the subscriptions of new In-
vestors until the (light of the Miller
of his day revealed that the only pirate
doing business was the promoter him-
self.
The Spanish Main was the Wall
street of that time. The piling up of
high fortunes was just as intoxicating
to outsiders in the sixteenth century,
when the whole world looked open-
eyed at the millions created by the
great steel merger and the fluctuation
of stocks. Newspaper stories of these
great fortunes watered the field that
Miller and his companions were to till.
The direct Inspiration of the Frank-
lin Syndicate was a scheme known In
Pittsburg as "Fund W." This was a
successful confidence game, and it is
worthy of memory that Col. Robert A.
Ammon, a leading syndic of the Frank-
lin group, whs in Pittsburg at the
time when "Fund W" was in opera-
tion.
The Franklin Syndicate was started
modestly. William F. Miller, a small,
pale young man, living in a tenement
at 144 Floyd street, in the Williams-
wouid "call down" .1, Pierpont Morgan
& Co. for failing to deliver "that 100,-
000 shares of Steel preferred on time,
and would notify John W. Gates that
William F. Miller insisted on “a set-
tlement for *1,000,000 in Pennsylvania
bonds" loaned the day before. Similar-
ly, Sully, the cotton king, would be
congratulated on the joint profit he
and the Franklin Syndicate had made
from the rise, and would be advised
that the Syndicate presented him with
another *2,000,000 of credit for further
purchases.
The victim, came like swarming bees,
but the very prosperity of the swindle
was fatal. As long ns it was confined
to a quiet corner of Brooklyn It could
escape observation, but with *30,000
a day coming thitherward the eyes of
the newspapers were drawn to the
inflow—and then It was all over. Mil-
ler fled by way of Colonel Ammon’s
office, carrying with him a satchel con-
taining more than *100,000. The
satchel stayed with Lawyer Ammon,
but Miller escaped through a rear en-
trance and got as far as Montreal. He
returned from Canada, reiving on Am-
mon’s promise to keep him out of
Jail, hut Ammon failed him, and he
burg district of Brooklyn, and an earn- ;wpnt to prison, where he remained, urn
eat member of a nearby church, con-1 til by revealiug the lawyer’s part in
tided to the corner groceryman and a tlie swindle he bought a pardon, and
few friends In his church that he had Ammon took his place as a convict.
inside sources of Information as to
what certain important operators were
doing in Wall street. Thus, he said,
he was in a position to make great
gains by speculations. He offered to
guarantee a return of ten per cent,
every week on all the money he in-
Woman’s Bank In Boston (1879-1882).
Long before Miller's time Americans
had been painfully introduced to the
sort of finance that later became syn-
onymous with his name. One of his
predecessors in the game was Mrs.
Sarah E. Howe, the Brookline phllan-
^ every wees on an me money ne in- ; saran e. Mowe, tne l iron Kline pnilan-
ij sjp vested, and half a dozen persons tojthroplst. who in 1879 started a Wij
died, about fifteen years ago, she was
destitute
English "Frenzied Finance."
It is a noteworthy fact that in spite
of the greater strictness of the Eng-
lish law on such matters, schemes like
thost* or’ Miller and Mrs Howe have
never gone so far in the United States
as op the other side of the ocean.
Miller operated for a few months,
Jabez Spencer Balfour flourished in
England for nearly thirty years and
did more than thirty times the dam-
age.
Balfour was really a miller witli
Imagination. He pyramided com-
pany on company, and so mingled
fraud aqd legitimate enterprise that
when he finally fled England thirteen
years ago, the crash of his schemes
cost, investors thirty-five million dol-
lars. Balfour’s original capital was
his enthusiasm in the cause of the
nonconformist churches, a reputation
as a temperance worker, and an ap-
palling stock of assurance. A “get-
rleh-qnlck" company had recently col-
lapsed, and the distress it caused
gave him his opportunity.
This was in 186fi. He organized a
company to protect the savings of the
nonconformist ministers, school teach-
ers and tradesmen, the thriftiest class-
es in England, His Liberator building
society undertook to build Koines for
the poor and worthj on terms of such
surprising liberality that deposits
came' with a rush from the beginning.
The austere Balfour and his associates
famine-stricken. ragged and exbattx; wick oimrattons, not nearly so easy Doubt disappeared and the golden
cd. They said that they had been «n»-: from the confidence man's view point1 stream, temporarily dammed, flowed
hashed by Apaches caught in the as the authenticated" diamond fields, afresh and in greater volume than
company carried the game farther.
The scheme grew until the Balfour
group hart banka and trust companies
and was butlfttfg blocks on the j mountain freshets and lost in the are Instance,! as examples of I
Thames Embankment and financing]desert; but they had scraped up about; thorough workmanship,
ventures all over England. a pint of st->nes Irani around the ant | The Humhert Case In Paris.
more, ever.
| Poor dear Mme. Humbert!
So un-
sophisticated. so Innocent of business
Balfour was elected mayor of Croy hill: «'«> induced. A Vnlike^the Arizona diamond swln-; kn„wledge! H was almost more than
.Lvn ha «nw «««< »n I t**t proved that manv of the atones ill*, the Hum hart fraud commands the: , ., .
mem umrehesmun^ supped ‘"ere diamonds ,„d rubies. .unstinted admiration of ,be — *...««* bankers -u.d do to take adv.n-
the Liberal program. He took part] Several capitalists were taken Into 'laleiuity There was
no ^lalhtre 1*8** ol her Innocence, but they did
in till the great philanthropic move-1 the >eoret A turnons firm of jewel ] there except the failure to get awayj
it—lent her francs by the million at
fifty per cent. She always let them
meats, gave .arse sums of monuv | era in New York was approached,: «] the last; and that detracts as little Sf,('tlp (hp rart, 0f interest— they were
to churches, and preached .the cause j rad, after an examination of the din lr°iu *'1,‘ glamour of the game as ttn-
of teototaiism. He was Andrew Oar-j mends already gathered, agreed to jetloo does from the fame of Napo-j
negie and J Pierpont Morgan com ‘ pay a quarter of a million dollars lor |,'on-
men of finance, she was just a sim-
ple woman. All went so well that
they were still paying for all the
blued. In the estimation of half Eng-iti quarter Interest in the mine, it an The Humbert ease bad all the ele • spl.milor of the house on the Avenue
land. Hi the verv time when he was1 expert of If. own selection reported menls of success. First, there was1 ,h(. t;r.in , Arni. w|„.n \[||e d'Au-
gathering his securities and picking favorahlv after surveying the field the grave and reputable fathe. In- ,Pa, h,.(, tbe age of elg' teen,
out a hiding place. When the crash. Up to this time the prospectors had law. M. Humbert, former minister ot i _. -iip .....
came Ire on-aped to the Argentine Ret tohl nolrodv the exact location of heir j justice, n solemn mid slid figure in] . wonld not mnrrv
public. Detectives found him in the] find As soon as the jeweler's prop- France; Then, his son, heir to Ills] . .... creditors were
I ositiotr was made Slack and Arnold father's estate, the dilettante Itt | * *■
, i In earnest. The greatest lawyers in
France faced one another in the trials.
trough to have his pictures bung in
Then
flour mills and sawmills and brewer-
ies. They took him home and sent
hint to prison for fourteen years.
Ten years later came Whitaker
Wright, whose suicide after being sen-
tenced to seven years’ imprisonment
in 1 BOB ended a career even more
spectacular than Balfour's On the
strength’ of one good mine In Austra-
lia be organized company after com
parry—the West Australia Corporation
and the London and Globe Finance
company being the most important.
In all, his corporations were capital'
ized at one hundred and ten million
dollars. He gathered bis boards of
directors from the peerage, lie
built a luxurious country place, with
great grounds, wonderful statuary, down to business-** even to consider-j Under the impact of the Humbert
artificial lakes, and a private theater. J ing Ibe advlspbitltv of limiting their i fortune, tire door, of society swung j
Wright’s moi\ey was made bv t.hq
to reeuri ile the two, tint Slack point
cd ottt that (hete was no American
law bv which the diamonds could bo caudal to Indicate whj Robert Henry! . rehearings- ami atilt Mmo
teeate,! and heir, and that to reveal Urawfnr M. the Arne, ban mnl.lc nil, lore! J m^e ’ at stili
rlre location before sue I a law was a.re should have bdthia fori line of , ra,pM. anJ ,he creditors lid
secured would enable the New York lone bundled million francs to Mile. I )t wom tllP|.p worp tl„.
men to grab the field and then refuse There** d Auvlgnae. wlm had become j |wpn(y mmion!l aafp strong
to pay. Slack ever, professed doubt, Mme. Frederick Humbert (box, to say nothing or accumulating
to ili«’ •vxisti'MH* •»! any ooiisMt.’iu* THh* llowluot faniilv rnt<»n*.l Paris. | intcrrHt. At hrr ho:ivi<*st credit*
hie illanujiHl-boarins n.it’t, ii!« l fm;ilh ininglm* tlio arrival of ilit* heiress! (Miur l & (’<>. otmhl wait no
declared he was tired of the whole, twenty million dollars, with a sue
! hnslness and w anted to get out of It : cessfril painter as her husband and
The outcome of the quarrel was the, „ bu rner eairlnet minister for father-
payment ot one hundred thousand dot r in-law! Mine. Humbert was soon -it
lavs to Slack for bis sham In Iho! vldfnfc newspapiu- notorietx wlttr Borri
mines, J ile Castellane, who was at that time
Once rid of Slack the promoters got j scattering many millions
promotion of companies and the boom-
ing of their stock He ran the price
of West, Australia Exploration from a
few shillings up to Htiriv pounds a
share. His name was enough to sell
stock iu any corporation, and for n
time Ire ranked ns one of the great-
est promoters in the world He was
different from the others’ whose fr auds
are described in this article, for he
began his operations with a fortune
of a million—legitimately earned In
the mines of the United States -ami
it Is claimed that he did nothing tor
which lie could have been prosecuted
in the United States It is on this
ground t|mt be vainl'- sought to pie-
von vent extradition after his arrest In
New York. But It was English law
that Ire bin) to light—not American.
Arizona Diamond Swindle—1871-72.
The Arizona diamond swindle is a
classic of fraud. In 1871 two men
named Arnold and Slack, miners and
prosnectors, rame to a mine broker
In San Francisco with a handful of
crystals which they said they had
found on an ant-hill in the wildest and
most remote part of Arizona. They
frankly admitted that tlrev did not
know whether the stones were of any
output tor fear of overstocking the open until they jarred, tile walk
diamond market. The point made Humbert house on the
try Stack impressed them, and the" Grande Arums became
Nvent to congress and secured the pass
sage of a MU bv which their diamond
claims could be located. They were
’diplomatic about It; in fact, the whole
'proceedings, were kept bountifully so
crot The very congressmen who voted j doors of society,
for an apparennly Innocent amendment! When the money-lenders
longer, and sited her for six million
two hundred thousand francs. She
contested the suit and told Of the
usury, and M. Girard blew out his
brains in loHpair. The receiver of
the hanking firm prosecuted the suit,
and finally got judgment for two mil-
lion five hundred thousand francs, the
actual amount loaned. After some dlf-
Tim : firuiiv jt was borrowed, and live estate
Avenue do la iisbnrent of Humbert Went on for a
famous for j space. But dining the Girard suit oer-
splendl I appointments an 1 magnificent j tain statements had created suspicion
entertainments; thither flocked lit i More suit., were brought against the
ernry Paris, artistic Paris, political ! Humberts and finally the courts
Haris, financial Paris. The (hairs of ’ op,.ne I the safe and found—a rusty
tiro banks swung as wide as tire • buckle and some dusty envelopes
j rvptrinute Craw lords, romantic-all
pressed ; were fiction.
to the mining laws did not know that j Mme. Humbert so hard that it liecamu j
tlrev were providing for a diamond aecessni'v to provide an excuse lor i
! not paying softie of their loans, a let- j
ter arrived from Henry and Robert ] ease there was living in Cleveland
man
monopoly.
This all made delay, Before the bill]
was passed slack had ample time to
go to London, invest the hundred [
Ihnnsnnd dollars in rough diamond
Strange Career of Cassie Chadwick.
During the progress of the I him heft
Craw font, nephew:; of tie man who : 1 Hdo. a middle-aged woman, who had
had left his ■fortune to Mme, Hnm-'j been in jail tor- forgery, and had lei
bert They had found unotlret will. | a precarious existence as a fortune
, i which gave Mme. Humbert on I an j teller. She 'n't! contrived to bury
and diamond dust, and plant a section ,lnmi|tv lhl,.|y alx ,,,,nn!iaud Iram -n | her past, an I at the time of tire Hum
and divided Hie estate among the ] licit disclosures was living In fairly
two nephews and Marie d’Aurigour. ' ill eircttmslunees. Sin1 made friends
marlame’s little slstro. among them a banker or two—to
The two t'rawlords' being each as i whom she whispered that there was
of Arizona -with his purchases.
The Jewelers' expert reached the
field He was a careful man: the more
presence of dlntmmds did not satisfy
hint. He gathered up a quantity of
Gie soil, placed it under the
microscope for the final scientific
test. There he saw the gllttlerlng
points. With microscopic diamonds
under his eve. ho tin longer doubted.
The remaining steps were easy. The
Diamond company was promptly In-
corporated. It had behind It some
of flic richest men In California and
New York The shrewd capitalists
bought Arnold, the second of the
value, and asked him to send them
paid their lavish dividends out of the <o New York to be tested. In due
new deposits and the business was; Hum report came that there were In ] original 1 routers, for live hundred
kept running until the deposits were Hie collection valueless quartz rys-: iimusand dollars, and on receipt of
far up In the millions. i tals, garnets of little worth, and seven ; Die money Arnold laded from sight.
Then the Inevitable breakers were j diamonds, one particularly fine iund neither lie nor bis partner lias
sighted. Instead of snatching wlmt The prospectors pretended to tie since been lieaid from by any of the
1m coqld and running away, Balfour . destitute, and the man to whom they : men they defrauded
simply organized a new company,] first applied fitted them out and dl- I have heard this diamond sell-me
which took over the pressing liahlii-1 rooted them to bring in a larger quote' criticised bv export lirnetltloners In
ties of the old concern. Thus was! tit y of gems to prove (lie genuineness j tlm art of criminal deceit because it
started a new flow of deposits winch \ of their find. Three months later Ac i only paid its Invcslnrs half a million
ran its course, and then still another j hold ami Slack were hack again— i m ho. The Hombert,case and the Chad-
rich at least as their uncle had been,
did not wish to be impleasniii.
though lot principle's sake they bad
m leave the settlement to the
courts At once a lawsuit! By
agreement the twenty million dollars
was sealed tip in a great safe lit
the Humbert palace to await a final
determination of the case. Once a
year t-he Crawfords and Mine Hum-
bert were to Inspect the securities.
The bankers were a little doubt-
ful about tlie lawsuit when the time
came for fresh loans How could
they la* sure tltat the case would not
a cloud over her birth and tltat she
was burdened with a large fortune,
tlie possession of which shamed and
mortified her..
Cassie L. Chadwick was merely an
imitator For tlie Humbert lot lime
of twenty million dollars locked in a
safe she substituted fifteen million
dollars in ostensible Carnegie notes
and stock ceidltieates. Instead of the
piquant romance that, uceomitued for
the Humbert, bequest slut offered tin1
fiction (hat she was the unrecognized
daughter of a famous Industrialist,
who, though he could not acknowledge
he decided In favor of the Crawfords, vmr. had created for her a trust fund
and then -what? Tlie Crawfords cane* : ,,f millions. Her friends were very
noltly to the rosette; the suit must go i sympathetic; chided her for feeling
on as a mailer of legality, leu the ,i(> keenly wlmt she coir Id net help,
younger of them would marry Mile an | a ivlsed her to make use of her
Marie when site came of age, so that, tot tune. At length site was convinced.
however the suit was decided, the - - -----------—.....—---------
money would remain itt the fa tell v (Continued on Eighth 1’age )
doit They are Just as Good as Gold NOW!
:W E MEAN:
French Addition Lots
And Clearing' House Certificates
* _
The ceTtificates you can get any day but unless you hurry you will not get one of those French addition Lots
The Chance
of a
Life Time
PARTICULARS
$1.00 dowp; $1.00 a week. No interest, No Taxes, No Mortgage
and No Payments when you are sick. Lots 25 x 140; Streets 70 feet;
Alleys 20 feet. Prices $150
The Chance
of a
Life Time
THEY ARE GOING AS FAST BARGAINS CAN GO
The French Addition of 800 lots was put on the market just thirty days ago and 600 lots have been sold, and
the entire addition will be sold out before the first of December. He who hesitates is lost. Opportunity is now
knocking at your door* Do not hesitate about accepting the chance to get a fine residence lot on such terms
that you can pay for it without missing the money. Call at once.
Buchoz, Schuster Kinne
SOLE AGENTS
114 Louis Street
El Paso, Texas
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El Paso Sunday Times (El Paso, Tex.), Vol. 27, Ed. 0 Sunday, November 3, 1907, newspaper, November 3, 1907; El Paso, Texas. (https://texashistory.unt.edu/ark:/67531/metapth595914/m1/13/?q=Lamar+University: accessed July 3, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting Abilene Library Consortium.