FINANCE FRAUDS.

Poverty Bay Herald, Volume XXXII, Issue 10448, 29 August 1905, Page 4

FINANCE FRAUDS.

TALES OF THE TRUSTS

Some months ago world-wide attention was directed to a scries of articles appearing m an American magazine, giving astonishing revolutions regarding tho methods of finance of many of tlie great corporations of that country. These have been embodied m book form, and the volume, we l_ii.ru from a review m a Sydney paper, makes piquant- and exciting reading. The writer is a man who was admittedly m the "inner ring," a financier by profession, and an intimate associate of some of the most prominent men m the financial world m tlie United States. Acting, a.s he -.says, under a strong sense of public duty, lie h-as i>rinted tho most astounding' disclosures of the methods adopted by hi.t erstwhile associates, m his description of what- he calls "The System," which, lie explains, is "a process or a device for the incubation of wealth from the people's savingw' m the bunks, trust and insurance com panics, and the public funds, m the United States." He goes on to s:iy that "through its workings during the last 20 years' there has grown up m this country a s«t of colo.-cul corporations, m which unmeasured success and" continued immunity from punishment liave bred an insolent disi.jj.ird of law, of common morality, and of public and private right, together with a grim determination to hold on to, at all hazards, the great possc«-ions they have gulped or captured. It is the same system wliich has taken from the millioiiis of our people billions of dollars, and .given them over to a score or two of men, •with power to use and employ them a« absolutely as though these billions had been earned dollar by dollar by the labor of their bodies and minds." Writing of the mighty corporation called "Amalgamated Copper," Mr Lawson says : "The enormous losses, millions upon millions — to my personal knowledge, over a hundred millions of dollars — which, were made because of Amalgamated ; the large number of suicides — to my pensanal knowledge, over 30 — which were directly caused by Amalgamated ; the large number of previously reputable citizens who were made prison convicts — to my personal knowledge, over 20 — directly because of Amalgamated ; were caused by acts of the 'System,' of which Hemry H. Rogers and his immediate associates were the direct administrators ; and yet Mr Rogers and litis immediate associates were the direct administrators ; and yet Mr Rogers and his immediate associates, while these great wrongs were occurring, led social lives which, measured by the most rigid yard-stick of mental or moral rectitude, were as near perfect as it i.s possible for human lives to be." Tho object of the author, as slated by himself m his introductory chapter, itt to enable the public "to comprehend the methods by which the savings they think are safely guarded m tine banks trust and insurance companies are so manipulated by the votaries of frenzied finance as to be m constant jeopardy." It must be admitted that Mr Lawson performs his self-imposed task vigorously and picturesquely. He admits that Amalgamated Copper was created largely by himself, and be says that it was largely because of what In© stood for and the public's confidence m fulfilment of the promises he made that the public invested their savings to an extent of over 200,000,000 dollars. And it was almost wholly, he adds, because of the broken promises and trickery -of the creators of the "System" that tho public lost the enormous sums they did. According to this astounding'story, the Rockefellers and Mr Henry Rogers, by using tlie machinery of the National City Bank of New York to carry out a juggle with the stock, became m a few days "the absolute own era of 36,000,000 dollars, none of wliich they had owned before, and which they had 'made' as absolutely as though tliej had>conied it by permit from the Go_ vernment of the people who had parted with it." Full details of every stage of the miraculous operation by which a sum of 36,000,000 dollars was made out of nothing aro given iv these pages as merely one comparatively unimportant incident m the history of the combination. The story of the "Boston GasWar" is told m one of the most suggestive chapters of the book. It is the story of a contest between the Standard Oil Oompany, represented by Rogers, and the Bay State Company, represented by Addicks and Lawsou, * with a final phase m wliich a financier named Whitney came on the scene with a new invention for the cheap manufacture of gas, and also with the bought votes of the Massachusetts Legislature m his pocket, conferring the charter upon him. We axe introduced to Whitney's lieutenants, with their lists showing the members of both Houses of the Legislature of Massachusetts, and the amounts paid on account to each member of a majority, together with the amount of tlie purchase money still due. Then after the Bill had been pawed by these purchased votes there came a thunderclap. The Governor of Massachusetts vetoed tho measure. It became necessary tio pass the Bill again, and over the veto of the Governor. Again was the operation of bribing a sufficient number of legislators conducted by Whitney's two henchmen, Towle and Patch. The legislators \yere greedy. They charged high for tiieir votes, and demanded substantial sums on account. But eventually the bargain was struck and the Bill was deemed :safe. All this time the horde of speculators were dealing heavily m the stock of the new company, and every move m the Legislature was watched with feverish anxiety. At the last moment an emissary of the enemy conveyed to the legislators a story to tho effect that Towle and Patch, who were controlling the "machine," intended to appropriate themselves the balance of the amount agreed upon as bribe-money, after tho Bill had been passed. A "panic set m among the virtuous legislators, who feared that they were about to be defrauded of the price of their votes. They demanded cash before voting, and as the total amount ran into an enormous sum it could not be conveyed to them m the time. Then m despair Whitney waited on the Governor and asked him on what terms he would sign the charter. The Governor replied tliat he w-ould only sign on conditioai that the price of gas should not exceed 60 cents per thousand feet. Whitney agreed, the charter was signed, but tho stock of course fell to almost nothing, and panic and ruin wero spread wholesale among the speculating public. Towlo and Patch fled the country', taking away m bags all the gold that they could .snatch up m their hurry. Then two mysterious events occurred. Towle _ dead body was taken ashore at Jamaica from the vessel that took him tliere and was buried. Patch was escorted back to the- ship, and a few days later his dead body was shot overboard with weights of lead attached to carry it to the bottom. It is a strange- glimpse of current financial history m tho "Land of the Dollar." The chapters dealing with tho leading insurance companies of the United States provide a good deal of disquieting reading. The author's thesis is that "the insurance companies use the billions tlie people have placed with them to buy, or create, banks and trust companies, the stocks of which arc a large part of their assets. They then use these banks and trust coinpauues, which exist because of the people's savings, m stock gambling enterprises, speculations as unsafe anas frenzied as those of the wildest plunger m Wall street." Mr Lawson gives specific illustrations of his general accusation, and he also gives m detail the replies of tlie insurance companies charging hi m with being a blackmailer actuated by spite on account of having- been declined as a "policy-holder. Then ho puibli«hc|>, as rebuttingi eviidence, tlie actual letters of certain managers, who had, previous to these statements, constantly importuned him to take out a policy with them. The book i.s full of clarion warnings. And not the least significant is tlie warniug that corruption and chicanery on a colossal scale are not confined to an autocratic .system of government.