The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1891-08-11
BRANCH OFFICE IN OLYMPIA.
Hundreds of Thousands Collected
From Dupes in Western States.
n Bogus Concern, With Headquarters
in Chicago, Obtains Thousands OF
Dupes and Even Deceives CONNER
cial Agencies-Oficers Arrested.

Building and Loan Association of North
America, were arrested today by a post
office inspector, charged with using the
mails for fraudulent purposes. 1t is
charged that the men who have been con-
ducting the association have swindled
thousands of people from every state in
the Union, and have taken in $4,000 to
$350000, giving nothing. in return. The
victims were found in all classes of people.
From the facts already in possession ofthe
authorities. the scheme will parallel that
of the great fund" swindle, which was
broken up about five years ago. There are
still two men at liberty, having disap-
peared several weeks ago, and it is be-
lieved that they got away with most of the
funds
For more than six months letters have
been received from all parts of the country
by postoffice and city authorities, protest
ing that the company was not what it was
represented to be; that it was collecting
money and making no loans. Inspector
Stuart has been working on the case for
four months. He found the concern had
agents in every state in the Union who
were selling the $20,0 900 of stock the
company had for sale. These agents were
sent circulars and documents showing the
spector Stuart took charge of the
case Lewis F. Mortimer, general
manager and secretary, was apparently
the 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 today,
having waited in vain for his return, Stu
art decided to secure the other visible
members of the combination. George o.
Ferguson, of Lincoln, representing about
sixty victims in his city, was summoned
here. With his assistance, the necessary
evidence was completed and the arrests
made. Three young lady clerks were
taken into custody as witnesses. Mr. Fer
guson. in an interview, said:
The association was represented in Lincoln by
a local firm, acting in good faith. Nebraska
people are very much in favor of building and
loan associations, and the offers Of this concern
were snapped up quickly. 1t sold shares for
so cents each, with monthly payments, for
ninety-six months, of sl105 At the end of that
time SO loan would be paid FOR. Then there
was membership fee of 35o, an "appraisc-
ment fee of so, and $f5 for three months pay
! ments in advance, thus making s95 The con-
Germ made one loan of $500 that was genuine,
induce others 10 invest, and hundreds
sent money to Chicago, expecting on the
strength OF the loans to make contracts for
homes. Many buildings were begun. The
money never came and we wrote to Chicago to
learn what the trouble. Finally, Professor
Elwood of the Wesleyan university, who a
heavy investor, cams to Chicago to investigate.
Manager Mortimer seemed to be such fine
business man and gave such assurances that
the loan would be forthcoming, that he went
back satisfied, but the money never came, and
finally laid the case before the postal authori-
ties.
Inspector Stuart and District Attorney
Gilchrist 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 people IN places where the single loan
was placed. rough estimate of the
amount received is S175, 900 in 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 III Omaha, Denver, Des Moines, Port
land, Or, Galveston, Olympia, San Fran
cisco and Minneapolis. These agents
transmitted hundreds of dollars daily in
checks, money orders and registered let
ters Until with a few months, it is said,
the concern did heavy business in Phila-
delphia, but it appears the authorities there
made inquiries which resulted in the man
ager leaving.
When the association was organized,
February 21, 1890, the officers were: Alfred
Downing, president; y. b. Toman, vice
president; Lewis f. Mortimer, general
manager and secretary. Mortimer seemed
to be the leading spirit IN the enterprise,
and at once incorporated the concern with
capital of 100000. He was a good
manager and soon had money flowing in
at a rapid rate. Everything went
smoothly until the closing OF the Ph1lade-
phia branch, when Mortimer came back
here and began wraneling with his busi-
ness associates. Finally he ousted Down
ing. electing one f. A. Wentworth as pres
ident Downing threatened trouble and
Mortimer, saying his son was very Ill in
Philadelphia, left suddenly and has not
beer heard of since. 1t is said he took
about so, 900 that the association had in a
bank here, leaving about 5000 which
Downing had tied up by injunctions.
Mortimer was last heard from July 10 IN
New York city.
Downing and Tollman both admitted
that an enormous sum had been received,
but asserted that they were not ''in 1t.
Both alleged that they had never received
more than small salary out of the affair.
Downing added:
Mortimer got il all. He started in what be-
Ijeyed 10 be an honest building and loan bust
ness l believed Mortimer to be an honest man
as had known him in the insurance business
years previous.
Downing. who came here from Peoria,
refused 70 talk further about the work Of
the association. He is a rather poorly
dressed man, and does not look as though
he had been sharing in the enormous
profits. President follman, on the
contrary. looks extremely prosperous, al
though asserting that he made nothing
from the association. He says he is an
artist. and Mortimer, who is a friend,
asked his permission TO use his name as
an incorporation. He consented, receiving
no money. He added that several weeks
ago he and Downing decided 70 send out
circulars TO the stockholders 10 see if ''some
settlement could not be reached" They
were discussing these negotiations when