The record-union., 1891-08-11
Special to the REcoRp.uN1oN.

Special to the RECoRD-UNIoN.
CHICAGO, Aug. 10.-Alfred Downing,
President, and n. B. Tollman, Vice
President Of the National Capital Savings,
building and Loan Association of North
America, were arrested to-day by Post
Office Inspector Stuart, charged with
using the mails for fraudulent purposes.
1t is charged that the men who have been
conducting the association have swindled
thousands of people from every State in
the Union. They have taken in $500 900
to S30O.OO0, giving nothing in return.
Victims were found in all classes of peo-
pie.
From facts already in possession of the
authorities, the scheme well paralleled
that Of the great "Fund W'' swindle,
which was broken up about five years
ago. There are still two of the men at
liberty, having disappeared several
weeks ago, and it is believed they got
away with most of the funds For more
than six months letters have been re-
ceIved from all parts Of the country by
the Postoffice and city authorities pro-
testing that the company is not what it
was represented to be; that it was collect
ing money and making no loans.
LIS SECCJOi hoILdLj I1ftS DCSH "OTklIlS OH
the case four months. He found that the
concern had agents in every State in the
Union, who were selling the $40, ,000, 600 Of
stock the company had for sale. These
agents were sent circulars and documents
showing the association 10 be gilt-edged.
When Inspector Stuart took charge of
the case, Lewis L. Mortimer, General
Manager and Secretary, was apparently
a responsible man, and handled the cash
received in large amounts every day
Stuart visited the cOmpany'S Office fre-
quently, disguised as letter carrier, in
order to secure evidence. Several weeks
ago Mortimer disappeared, and to-day,
| having waited in vain for his return,
Stuart decided to secure the ether visible
members of the combination. George 0.
| Ferguson Of Lincoln, Neb., representing
about sixty victims in his city, was sum
mOned here. With his assistance the
necessary evidence was completed and
the arrests made. Three young lady
clerks were taken into custody as wit
nesses.
Mr.. Ferguson, in an interview, said:
The association was represented at Lin
coin by local nrnl, acting in good faith
The people of Nebraska are very much
in favor of building and loan associations.
and the offers of the concern were
snapped up very quickly. 1t sold shares
for 90 cents each, with monthly pay
UO,dL
end of which time 81 ,000 loan would be
paid for. Then there was a membe bership
Zee OF $50, an appraiSement fee of so, and
SO for three months payment in advance,
thus making S95. The concern made one
$500 loan that was genuine, and this was
just enough bait to induce others to in
vest, and hundreds sent money to Chica-
go, expecting on the strength of the loans
to make contracts for homes. Stores were
let and building began. The money never
came. We wrote to Chicago to learn
what was the trouble. Finally Professor
Ellwood, of the Wesleyan University.
who was a heavy investor, came to Chi
cago to investigate. Manager Mortimer
seemed to be such fine business man,
and gave such assurances that the loans
would be forthcoming that Ellwood went
back satisfied. But the money never
came, and finally | laid the case before
the Postoffice authorities"
Inspector Stuart and District Attorney
Milchrist went over the concerns books
and found that seventeen legitimate
loans had been made in as many different
States. These, it would seem, were
made to allure other investors. No
records Of any other loans could be found.
although the books show that money
had been received from hundreds of peo-
pie in the places where a single loan was
placed.
II IOuSh GSllllldlG vi Inc amount re-
ceived is $500 III the year and half the
association has been in existence. The
books show that the association had
agents in all the States but the most
active were in Omaha, Denver, Des
Moines, Portland (OrD. Galveston.
Olympia, San Francisco and Minneap-
oils. These agents transmitted hundreds
of dollars daily in checks, drafts, money
orders and registered letters Until
within few months it is said the concern
did a heavy business in PHILADELPHIA. but
it appears that the authorities there made
inquiries which resulted in the manager
leaving.
When the association organized on
February q, 1850, the officers were Alfred
Downing, President; n. B. Tollman Vice
President; Lewis L. Mortimer, General
Manager and Secretary. Mortimer
seemed to be the leading spirit in the en-
terprise, and ut once Incorporated the
concern with q capital of $50, 100000. He
was good manager, and soon had money
flowing III at rapid rate. Everything
went smoothly until the closing of the
Philadelphia branch, when Mortimer
came back here and began grumbling with
his business associates. Finally he
ousted Downing, electing one +. A.
Wenworth as President Downing
threatened trouble, and Mortimer, saving
his son was very i'll in Philadelphia' Jeff
suddenly and has not been seen since. 1t
is said that he took about $4,000 that the
association had in bank here. leaving
about 5000, which Downing had tied uD
by injunction. Mortimer was last heard
of on July 10th in New York City.
Downing and Tollman both admitted
that enormous sums had been taken in.
but asserted that they were not sin it.,'
Both alleged that they never received
more than small salary out of the affair.
Downing added: Mortimer got it all.
We started in what we believed to be An
honest building and loan business. | be-
lieved Mortimer TO be an honest man. as
| had known him in the insurance bust
ness a number of years previous"
Downing, who came here from Peoria.
refused to talk further about the work of
the association. He is rather poorly
dressed man, and does not look as though
he had been sharing in the enormous
profits. Vice-President Tollman, on the
contrary, looks extremely prosperous.
although asserting that he made nothing
from the association. He says he is an
artist, and Mortimer, who was friend,
asked permission to use his name as an
incorporation. He consented, receiving
no money. He added that several weeks
ago he and Downing decided to send out
circulars to the stockholders to ''see If
some settlement could not be reached
They were discussing these negotiations
when arrested. Tollman admitted that
since the associations formation he knew
of SSl, 600 having been received.
inspector Stuart said he was we'll salts