The herald., 1894-09-11
Collapse of a Big Land and
Water Scheme.
The Enterprise Denounced as
a Swindle.
Startling Allegations Made by the
Stockholders.
The Alleged Fraud ulcnt Concern IL the
Colorado River Irrigation Com
pany Charges Against
Its President.


New YORK, Sept. 10.-According to
allegations contained in complaint
filed In the United States circuit court,
Judge La Combe will be called upon to-
morrow to take action with the object OF
preventing the continuation and final
contamination OF what is characterized
as one of the most colossal frauds in
modern times. The chief actor in this
scheme is John @. Beatty, an American,
who at present resides in Texas. His
alleged victims include prominent New
Yorkeis and other residents of the
United States and Canada. How far
the echeme has succeeded has not been
determined, but one victim, James Ii.
Beatty, president of the German and
Northwest Insurance company OF Onts-
rio, Canada, and OF the Federal Life AS
surance mpany of Hamilton, Ontario,
swears he has lost s37 500, and it is
charged that the goal OF John @. Beat
ty'e am mbition was to fraudulently obtain
possession of S7,500,000.
The complainants in the case. in addi-
ton to James II. Beatty, are James @.
Aiken, Benjamin H. Dosne and Leo
Wermser of New York. The defendants
are Frank A. Miller, @. H. Dow, Samuel
N. Wood, T. 2. Earnest, Frank Church,
j. N. Brown, @. w. Klttredge, J. w.
Carlisle, Il. J. O'Donnell of California,
and John @. Beatty OF Texas, all direct
ors or trustees of the Colorado River
Irrigation company.
The company was first organized jan
uary 7, 1891, under the name of the
Arizona and Sonora Land Irrigation
company, but the title was changed
January 8, 1898, to its present form. Its
ostensibls object was to carry on the
irrigation of land in California, Arizona,
Lower California and Mexico. Its capital
stock was 81, 300 900, divided into 150. 600
shares of $50 each.
According to the complaint, however,
the company was organized by John @.
Beatty for his sole interest and benefit,
and to enable him to realize $500, 600
on tract of worthless land obtaining
100000 acres on the Alta river in the
province of Sonora, Mex, to which it
IA said he did not even have title.
Having organized the company and OBJ
tanned the issue OF the capital stock by
alleged fraudulent and fictitious state.
ments, it is charged John @. Beatty
went about negotiating with the object
OF transferring the land to the com
pany for the whole of its capital stock,
or 81, 800, 900.
The land formed part of what is
known in Mexico as the Jecher conces-
aion, the meaning OF which is not ex
planned in the complaint, but it is
charged that John O. Beatty mad no
title to it. The board OF directors, it is
charged, were then, as now, the mere
tools ard creatures of John Q. Beatty,
ready and willing at all times to carry
out his behests. The president OF the
board was Charles H. Dow, and by
vote of the majority it was agreed to
transfer 250, 900 shares of the company
to John U. Beatty for 81, 500, 900. as soon
az it was possible to carry out the trans
fer. The directors, being Mr.. Beatty's
factotums, made no effort to investigate
either the character of the land or the
genuineness OF Mr.. Beatty's title to it.
To further facilitate matters Mr..
Beatty'e board OF directors decided to
appoint him manager, with exclusive
control OF affairs, at q salary OF $4,000,
while f. A. Miller, concerned with
Beatty, was elected vice president OF the
company, and also given salary OF
$4,000 year, both OF which transactions
are charged to be illegal.
The first transfer OF stock was made
on January 10. 1894. by the board OF di-
rectors. wnen 54, 900 shares were trans-
ferred to John @. Beatty on the basis of
$50, 0O0 acres OF land or one share for 10
acres.
John @. Beatty himself presided at
this meeting, and against the protests
of James Il. Beatty, stockholder. it
was agreed to issue Sc, 900 shares OF new
stock.
In March last ]. H. Beatty obtained
from the supreme court OF the state OF
New York a mandamus requiring the
directors to show him the books, but
John @. Beatty went to California, taxi
ing the minute books of the transac-
tions with him, and James H. Beatty
was unable to get the evidence he want
ed concerning the title of the Jecher
concession.
The known assets of the company will
not exceed $4,000. II had no bank &C.
count since last October and was obliged
to give up its Office at 66 Broadway, this
city, Inst fall for nom pay ment OF rent.
Its Offices in Philadelphia, Washington
and other cities had been previously
given up after the country for miles
around had been flooded with prospec-
fuses and pamphlets declaring the land
an ell dorado. The place where the COM
pany now has en- Office is in Provi-
dence, Il. /.
The rompany'a known property in
California consists of chattels worth
$39,6l7, which John @. Beatty, by q bill
OF sale. alleged to be fraudulent, trans
ferred to the engineer, Charles r. Rock
wood. without any consideration. In
addition to this, lockwood, il ia said, is
still drawing $500 month for doing
nothing; but the company owes him
$4,000, although he never did anything
for it.
Judge La Combe will be asked to APP
point a receiver to take charge of the
affairs OF the company. He will aso be
asked to declare that the issue OF 56 GOO
shares OF stock was spurious and illegal,
Al. T.. ~. Il -