The new North-west. [volume] (Deer Lodge, Mont.) 1869-1897, 1880-03-05
MILLIONS BY FRAUD.
Exposure Of tho Gigantic Swirdles OF
Wall Street.
HOW THE FOOLISH ARE DEcEIvED-sfs-
TEMATIc CHEATING.
New York Tribune.

out-of-town customers. Inc feaotpo9s W ,
small investors to psrtake OF the profits OF
this kind Of speculation has given rise oil
late TO class of fraudulent dealers VINO
have pursued a systematic course that has
resulted in total loss TO the customer and
and clear proht to the dealers al the en-
tire remittance, without even the form oil
an actual investment. Some of these deaf
ers assume names either closely resembling
the names Of reputable dealers, oreven IN
some cases identical with them. Among,
these were Lawrence s. Co., Heath u 20.
Thatcher, Belmont s. Go. and numerous
others.
HOW THE swINDLING is DONE.
The plan pursued by these persons to
cheat the eager Spectator may be learned
from the papers in one case, which IS
specimen of all the cases, In which i've let
tiers sufficed TO transfer from $40 to $lOo
from the pocket of the customer to the
pocket of Lawrence & Co. An advertise
meut setting forth the advantages OF deal
inc with this firm is inserted In the papers,
and those who respond TO 1t first receive
prospectus, In which are fully discussed
the q opportunities for making money"
"vast profits already paid" unerring |
rules for success" the history OF sup |
posed profitable investment-ail indicating
that the stock market is bonanza to Oil
who deal with Lawrence d Co. Letters |
are added from customers, acknowledging |
the receipt of profits RENTED, with inclo- |
sures for further operations; and the circu-
lar concludes with hattering notices OF the
press, most of which prove, on investiga-
ton, to be paid business notices in widely
circulated respectable journals. The pros
pectus is adorned with q picture OF the
Drexel building, the side Of which Is
adorned with the name of Lawrence u 20.
Together with this is sent stock ietter,
Autographed, enlargin.S upon the favorable
condition of the market for investment.
This Ia the "bait." Upon receipt Of these
the person in question sent remittance of
$40 for investment, and shortly received
letter of acknowledgement, in which he was
told: ." We will not send You certificate
to-day, as the combination In which We
would like 70 have you Interested Is not yet
filled :" that there was going TO be deci-
ded move in large stock, which alone
would show large profit, and offered TO
seud him a certificate for fifty shares in the
Combination lin which the orders were
pooled) on receipt OF an additional $50, Civ
ING him credit for the twenty shares not
covered by his margin until the profit
should be declared, on which he should
have full benefit on the entire fifty shares.
This letter was a "stock letter, identical
In all cases. The customer responded 70
this =. liberal Offer" as they termed 1t, and
received printed certificate, upon which
IL was stipulated that no profits OF capital
were TO be withdrawn from, the combIna-
tion until the expiration Of one month. In
about one week he received q circular sta
ting that '.we made turn on Lake Shore,
realizing profit OF one-half per cent, be-
ing equivalent to $50 profit on each lou
shares of stock. N. B.-Profits and it's
original capital to DO used al working cap.
itai until the close" The victim endorsed
the paper, "raising his hopes" But In
another week he received what he called
the grand ultimatum," In which he wat
informed that an unlucky turn had resulted
IN the entire loss of the capital OF the com.
bination, together with the profits that
we had already made" but encouraging
him TO retrieve his loss and make money
besides by trying another venture. The
scbeme does not end here, so long as there
IA hope of inducing the customer to invest
further but letter after letter Is sent tc
him. telling of the activity Of certain
stocks, evading the inquiries prompted b,
HIS snspicion, now aroused, as to their con
pection with the Stock Exchange, which
they tell him il unnecessary for large buy
ers and not 10 their advantage. II, on the
other hand. the customer makes an origi
nal investment of 500, or other large sum
they are generally satisfied with that pluck
ing Of that particular goose. IL Is sait
that almost no business is done over tn,
counter by these firms, but that they con
fine their dealings to those answering thei
advertisements, or to those TO whom the!
send their circulars from their list OF names
of which they have hundreds OF thousands
None of the money received is actually in
vested.
PROFITS OF THE FRAUD.
The profits from this kind OF bushes
have been enormous. Mr.. Comstock ha
obtained copies of agreements and partner
ship articles, based upon actual bushes
done. which indicate this fact and he ha
transcripts Of books that prove 1t beyon
question. Four Of those firms ara pract
cally under one management. These are
Lawrence 81 Co., Nos. 10 and 81 Broa'
street and Nos. IS and 81 Exchange Place
Adams, Brown & Co., Nos. ~ aud % Broa
street Allen, Jordan & Co., No. "a Wa
street, and Barnes, Garrison u Co., Mo-
8 and IL Broad street. Prior to Septen
Der /, 1879, Benjamin Buckwalter wa
owner OF the first two coacerns and ha
owner in the other two. At that time
sold out his interest in the four firms
two men, one Of whom had been half owl
or with him In two of them, who were
become partners and manage the who
concern. The details OF the agreement b
tween them and Buckwalter arc signit
cant, not only as showing his relation to Il
business, but rs indicating the previot
profits from tho concern, the agreement b
ipp based upon the profits OF the thru
months preceding It's execution. For Il
business OF Lawrence d Co. they pa
Buckwalter 81, and executed sixty promi
sorry notes, OF even date, payable mouth
for five years, OF 81, 500 each, and agree
to execute ut the end OF that period six
other notes, similarly payable, Of $50
each. For the business Of Adams, Brow
q Co., sixty notes were given OF $S, 333.'
each, with sixty notes co follow of $3S'
each. For the concerns OF Allen, Jords
d Go. and Barnes, Garrison d Co., 2
similar notes were given Of 81 900 eac
All these notes were with interest al
without grace. In case Of default on al
one note for thirty days, all notes Civ
for the same concern, whether due or ID
were to become due and payable, but we
TO be surrendered 20 the makers, who
turn were to give mn the business and
receipts TO Buckwalter. The purchas
also executed confession Of judgmer
with costs and interest, to be filed up'
their defauiting OF payment on any NOT
All the money. after deducting what v
necessary for daily expenses, was to be d
posted In Buck walters bank every week
his credit, and applied m the notes. or,
in excess OF the notes due, upon those ne
falling due. Buckwaltor's CONFIDENT
men were to be In the Offices, and the mi
matter. placed In locked boxes by the O.
riers, could be removed only by one
them and one of the firm, each having
key to one OF the two locks upon the DO
In this way the interests Of Buckwal;
were secured. His total monthly incof
from these four concsrns, 30 long as th
iourisbed as they had been fourishin
was thus TO DO S22, $50. 30 for Eve years, q
for q second period Of five years $10,5
each month. making total IN ten years
81, 9s9, 5000, exclusive Of interest Itw
further agreed that meme OF the m
placed IN tho employ Of these firms
Buckwalter should be removed without |
couKaut Tho books OF LaWrUnce u g.