The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1889-11-27
AChicago Company That Sold Bogus lands in
the Northwest to Poor People and Trans
ferred the Mortgages TO Bankers.
Seventy-Five Men Hired at S. a Day to
Secure Signatures to Forged Deeds.
A Victim Of the ~Swindle, Who Lost $50, 900.
Explains the Methods of the Thieves
Forged Checks Cashed on Telephone Orders.
How Fredericksen & Co., of Chicago, Robbed
Rich and Poor Alike.

How Fredericksen & Co., of Chicago, Robbed
Rich and Poor Alike.
CHICAGO, Nov. 26.-It is now said that the
amount involved In the alleged fraudulent
transactions of Fredericksen a. Co.. in con-
nection with which their cashier. Bidgood.
who was arrested yesterday. will reach
S1,0Oo.0O0. The charge is based on alleged
crooked transactions in giving mortgages
on lands TO which the FrederickseGs had no
title. These tga ges are said to have been
pledged as security for loans. Fred
erickson " Co., have been do
ing a large business in Western
railroad lands, selling for the most part
small tracts of forty or fifty acres on tie
installment plan. the purchasers usually
being immigrants or poor people who
wished to invest their earnings in farms.
After a certain number Of payments had
been made Fredericksen gave a deed, q
mortgage on the land being taken for the
unpaid portion of the purchase money.
These mortgages. it is alleged, were then
given as collateral for loans. or sold out
right. through the West. Among others ex-
Governor j. A. Rice, of Minnesota; X. Nun
nemacher. cashier of the Merchants Ex-
change Bank of Milwaukee, and l.. q. Com
stock. a Milwaukee lawyer, are said TO have
been large buyers. 1t is now claimed that
many of these mortgages are worthless.
When seen at the station Bidg0od stated
that his connection with the company was
purely as cashier, and that he did not see
how he could 10 implicated in Frederick
sens transactions. The business. he said,
amounted to 80, 900 acres a year, but he could
not say how much of this was in mort
cages. Bidgood was arraigned in a police
court to-day and his case was continued
till Saturday, in bonds of $4,000. The
prisoner looked as if he had spent the night
In wakefulness and tears. He declared his
entire innocence. and asserts that he never
had reason to suppose that the business of
Fredericksen a. Co. was otherwise than
strictly legitimate.
Mr.. Cowie, soI;-in-law of DR.. Rice, of
Harland, Wis, one of the heavist sufferers
about S100. 000). is here looking after his
father-in-law's interest. He declares that
he will secure the arrest of the missing
Fredericksens if it becomes necessary to
follow them to the end oil the world. There
are about two hundred servant-girlsi in this
city," said Mr.. C0wie, who invested from
$50 to $500 each in these bogus lands. and
who, of course. have lost all. but aside
from these there are bankers in Chicago
who hold a lot of alleged mortgages which
they might as well throw into the fire. be-
cause they are not worth a sou. Where all
the money has gone. / cannot imagine.
and thai is something have been
q NV III LoL ~ AoAe atA4O~
There is from 100000 to 100000 to account
for, and the only explanation / can give is
that the major portion of 1t. went mp Mil
waukee way. The Fr~edericksens have not
a cent and no property whatever. Now
we have the papers to prove IT., and are
going to prove it in open court. that a GER
tain Milwaukee man mentioned in this
case has figured as the chief in these
crooked transactions, and that he induced
hundreds of people,. among them his own
friends, TO go into this swindle."
The Daily News says: 1.-The scheme OF
the conspirators was a simple one. Freder-
icksen had plats of farm lands In Dakota
and all parts of the Northwest and by pick
ing out a suitable piece, a description
would be filled ont on a. blank mortgage
and sent to the clerk of the county wherein
the land lay. No abstract of title is re-
quired by Minnesota law in recording
mortgages, and the mortgage bearing all
the marks of a genuine docu-
ment similar to those held in
back in the hands of the sharpers. Then it
was easily disposed of to investors. unless
the people 10 whom it was offered demand
ed a complete abstract, and this, 1T seemed.
very rarely occurred, although it is
astonishing that some of the shrewdest
moneyed men IN Chicago were taken in by
the scheme. The real owners of the prop
erty knew nothing of the scheme. of course.
and the poor fellows who bought and part
ly paid for these lands, receiving supposed
abstracts of title. settled upon them and
built homes, put in their seeds and stocked
the places, only to be swo0ped down upon
by the real owners and driven onE. thus
the rich holders OF mortgages and the poor
occupants OF the land were robbed. Among
the Chicago capitalists and banking con-
Germs in Chicago who had confidence
in Fredericksen and are said TO have
invested in the mortgages are L. g.
~Southworth, the Joliet steel man,
who is said to be one of the biggest credit
ors of the company; 5. w RawsoD. who.
bis holdings. and will lose nothing; the
Fort Dearborn National Bank. which holds
a small bundle of nice paper mortgages,
worth about 2 cents 2 pound when paper
and rage are in good demand, and the Chi
cage Loan and Trust Company, which is
in the same boat with the bank.
1T is also said that eight or ten Eastern
capitalists contributed 100000 to tho
Golfers of Fredericksen a. Co., and that l..
G.. Comstock, a Milwaukee capitalist, is
out about $4,000"
Hedge A. Hangar. the receiver appointed
by Judge Shepard for Fredericksen a. Co.,
asked leave of Judge Shepard to-day to re-
sign his receivership. He SAYS that be has
been able to collect only Ss2.39. and that the
concern has no assets except some apparent
ly worthless papers. He sees no need of a re-
ceiver, there being nothing TO receive. The
Judge directed him to serve all parties in
the suit of Josiah Caratty against Fred
erickson with his motion 10 be allowed TO
resign and come in court Monday:
Dr. John A. Rice, one OF the Victims OF
the swindle. arrived this afternoon. why,
that man Fredericksen was the most cold
biooded swindler / ever knew" he said. Il
hold now $4,000 of mortgages sold me by
Fredericksen, and every one of them bears
a written guarantee. signed by Frederick
sen. that the mortgages REPRESENT purchased
land on which the amount of the mortgage
has been paid. OF the whole $4,000 worth
i know of a number which are absolutely
valueless. Besides myself. as has been
stated. cashier Nunnemacber, of the Merch-
ants Exchange Bank. of Milwaukee, is one
of the heavy losers. and T.. ID. Hendricks. q
prominent real estate broker of Milwaukee,
has lost every cent he had, aud has been
forced to assign"
How did it happen that men of such ex-
perience as Mr.. Nunnemacher, Mr.. Kend-
ricks and yourself could DE so deceivedrp
THAT is one of the peculiar features of
il. You sec we knew Chicag0men had been
backing Fredericksen. and it was because
we supposed they had investigated him
that we trusted him. Hendricks. for in
last man one would suppose could be taken
in by q manufactured mortgage. but he
was. s. w. Rawson. q Chicago banker, 1
am told. knew some time ago that Freder-
ickseD was not all right. and stopped doing
business with him. In spite of his knowl-
edge of the man he was lett with q large
amount of Fredericksen's paper on his
his hands. with no security but the same
kind of mortgages we all hold.
81 An. not exaQgerafing when L eav that