The sun., 1892-06-17

| lnhtIs 10 say. WnlI0 ne was Wiliiuk W bioW
his written opinion to stand for year and
n half before tho stock-buying public as
an inducement to invest in Pan Electric.
he was unwilling that his associates inside
| should regard IL as n guide to their own ac-
tion. His associates followed his private ad-
| vice and consulted an expert. They went to
the Hon. z NJ Marble. ex-Commissioner OF
Patents. and Mr.. Marble informed them In a
written opinion that tho principle OF the Pan
Electric telephone was covered broadly by the
Bell patent: and that 30 long rs the courts
sustained the Bell patent. the invention OF Mr..
Rogers would be subordinate thereto. This
| opinion from the expert consulted By the Pan
Electric statesmen at Mr.. Garland's sugges-
tion wns dated Fob. ~. 1884. about sevcn
weeks after Mr.. Garland had writton his own
opinion that there was no infringement Tho
Marble opinion. on the strength Of which no
| stock. licenses. or local rights could possibly
| be sold to tho greatest fool living under
| tho moon. was carefully suppressed. 1t
did not get beyond the Pan -Electrics
inner circle. There is reason to believe that
the real contents and significance OF this opin-
ION wero kept evon from Gen. Johnston. the
President OF the concern. who had manifested
| on several occasions decided reluctance to
figure before tho public as q common swim
| dler. But for seventeen months after the
| opinion. for seventeen months after they
know that the Rogers patent did infringe
| on tho Bell patent. and that II tho Bell patent
| was valid the Rogers patent was worthless
| tho Hon. Augustus II. Garlands certificate
| as the lawyer OF the Senate that there was no
| infringement on Bell by Pan Electric. was
kept before tho great American public as toll
bait for ignorant and unwary purchasers.
=. Among the gulls was Senator Vest OF Mis-
souri, He testified afterward that he received
ono OF the circulars from Parthenon Heights.
saw that Senator Harris was concerned in tho
enterprise. and went to him for information.
This was In April. 1884. three months aftcr
the Pan Electric statesman had put forth Mr..
Garlnnd's no-iniringement certificate. and ono
month after they had privately learned that
there was Infringement Senator Harris sent
Senator Vest to Senator Garland as an author
ity on the status Of tho Rogers patents and the
Pan n-Electric's relations to tho Bell Company.
Both Harris and Garland assured Vest that
there could be no conflict with Boil. and
Garland told him no had already given a
written opinion to that effect to a man who
was about to buy stock. Tho Marble
opinion was not mentioned. Vest thereupon
bought one hundred 500 shares for 81 900. or
at tho rate OF ten cents on the dollar. giving
his check in payment He seems to have
been speculative but confdine investor in
good faith. who was notlet In upon tho ground
floor like certain OF his fellow Senators. but
was moderately taxed and ushered to the SEQ
ond story front Tho most interesting point
in Mr.. Vests testimony Is that he swears that
Garland. after assuring him that there was no
danger OF a successful infringement suit on
the part OF the Bell people. weat on Ito rep
resent that in his opinion the Bel patent ras
illegally obtained and that the Pan Electric stock
~ IL
mark tho transition from tho earlier policy OF
asserting that Bell was not infrnged. to tho |
later and more audacious policy Of admitting |
tho infringement and attacking tho validity OF |
tho Boil patents.
3. While the statesmen were still selling |
local rights in the South and Southwest on the
strength Of Mr.. Garland's and Mr.. Harris's
no-infringement opinion. and while they had |
in their strong box the suppressed opinion Of
Mr.. Marble that Pan Electric did infringe.
they employed another expert. DR.. Wellington
Adams. Like Mr.. Marble. he advised them in
writing that their apparatus unquestionably
intringed on Bell. Meanwhile the Bell Com
pany began to press them here and there with
interference suits. Tho statesmen thereupon
hired DR.. Adams to wrte pam phet in their In
terest. entitled The Telephone Case. prepared
for tho Pan Electric Telephone Company.
by Dr. Wellington Adams" This book was
published as early as April or May 1885. and
1t was the authorized and acknowledged state
ment OF the Pan -Electric's claims The book
was afterward introduced as such by tho
company in the proceedings In the Depart
ment Of the Interior and sworn to be true.
In this pamphlet the Pan Electric statesmen
say on page 252. whom discriminating their
case from the Spencer case. that the decision
OF the court In the Spencer case was based
solely on the proposition that the Spencer in
struments wero not such as to infringe the
Bell patents. II is quite different ,rith us. since
TOE admit Ha! il the Bell patents arc held valid
ue most certainty do infringe" So that
not only did these speculators OF Par
thenon Heights and OF the Cleveland Ad-
ministration privately know that they in
fringed on Bell but they publicly and under
oath admitted the infringement when 1t be-
came convenient so to do: and yet. then and
for months afterward. they kept on raklng
in and dividing the money procured from in
nocent investors by the exhibition OF the Hon.
Augustus II. Gar!and's opinion. furnished to
stool pigeon investor and publicly adver-
tised. that the Pan Electric telephones did not
infringe tho Bell patents. and that no trouble
Was to be apprehended from suits BY the Bell
Company. As late as February. 1885, Mr.. Will
liam Gredner reported from Birmingham. Ala.
that Gen. Upshaw Chief Clerk In the Indian
Gently visited that city. In the interest Of the
Pan Electric. and had succeeded In absorb
ing over $4,000 out Of our people. upon the
strength ofletters written by Attorney General
Garland and United States Senator Harris,
which he circulated extensively around. These
letters stated. In effect. that parties having
money could safely invest In the Pan Electric
Company. as its patent was sound In every
way. and would be sustained by tho courts In
any conflict that would arise between It and
tho Bell patent"
Such are the reasons for describing tho Pan
Electric speculations. In Its earlier phases as a
sawdust game. No wonder that Gen. Johns
ton. IL little more sensitive to points OF honor
than some OF his associates. wrote In anguish
OF heart to DR.. Rogers. warning him against
the public sale OF the ompany's stock! "Such
sales" wrote the General. would be very
dangerous For II the enterprise did not sue.
ceed all concerned In them would be con nsidered
by tho public as swinders I mean all con-