The sun. [volume] (New York [N.Y.]) 1833-1916, 1898-08-07
THE H0OLEY EXPOSURE.
sC1yptL or THE SToRr TOLD BIZ THE
LONDON PROMOTER.

ToSpoN. July 30.--It would be difficult TO in
vent a more sordid. vulgar and disheartening
s,ory Of commercial and financial immortality
than that which has been partly told in the
bankruptcy court this week by Ernest Terah
HooIey. whose comet-like career l described in
A recent letter. Each country. each genera
ton seems to have a special form or,
method Of INSCRIPTIONS financial adven-
,ure. In London for more than a quar-
ter Of s century Il has been company
promoting. The swindles perpetrated. the
money wheedled out of the pockets OF the pub
lie by what are virtually false pretences, would
amount in the aggregate not merely to mil
lions. but literally billions OF dollars. The pub
lie code OF morality in this respect has so deteri-
Grated that fraud In everything but a technical
sense has come to be regarded as legitimate In
company promoting. Indeed. 1t has almost
como 10 pass that a really honest enterprise
cannot appeal TO the public for Investment
without r~esortinR to methods which a man OF
honor would scorn 20 employ in his private
capacity.
So it happens that the revelation which is
being made in connection with the Hooley
bankruptcy is nothing less than "a great ma
tional scandal-a shame and a disgrace to the
financial capital Of the world. Hooley's adven-
tures and expolients are illustrative on a large
scale Of the reprehensible methods which are
employed to raise capital for a majority OF the
enterprises launched upon a gullible English
publir. 1t is not necessary to enter into any OF
the technical details OF the Hooley exposure.
Two features will sufficiently illustrate the de-
Teneracy OF English company promoting. They
are the purchase of "show" directors and press
bribery and hlackmail. These two sources OF
expense and profit are what made and also
ruined Hooley.
Imagine paying two noble lords $125, 600
each in cash for the use OF their names
as directors Of a single company! Think
Of paving 10000 for a single article in
a venal newspaper. and $l2.50o to another.
simply to prevent its attacking an honest en-
~terrr:se. But these are things which Hooley
swears he did Just in the ordinary course Of
business.
The STORY Of how the Dunlop Tire Company
was formed and loated is perhaps the most in
tarnsting. Hooley bought the business on
Arril IL. 1876. for Sl5. 100000. and sold it Just
one month later for S25. 600. 600. His gross
profits by the transaction were about $1,000
WI. The public rlamored for tho shares and
suhsrtihel the capita! many millions over. The
efforts Of tho Registrar in Bankruptcy to ascer-
vain how he acrom plished this wonderful coup
brought on: some Interesting replies from Mr..
IIooley Here is an extract from his exami-
AHTY 49,. were the promoter of the company
w6a, your duties were A.-W"il. I can hardly
answer that g,
H"o!cy. Il is alciut upon which have often
trijet 70 obtain jpiGTinati9n laughter
do is t. buy a business and then you have To-
sci j. agSiim; fnH then. think the matter ends;
Q-Are you. as the promoter. responsible for
n nr%.es ct" r.s AMI bbiGPf n not ;Dd fa s!N;hms5t,
nA@e in it? A;-No. l think not. My solicitor
'?1Pld answer that question better than | ian:
Niityo on your solicitors. They only act on in
The Ohicial Receiver-Pcrhaps am asking
The Registrar-I do not think so. should
The Debtor-I always think that the most i'm
l,1rtant part of the prospectus is the front page
Nor" laughter.
And then Mr.. Hooley explained that the
names on The front page Of the Dunlop pro.
hp"rtus alone cost him between S45O.0O0 and
SJOH.NDo. Probably there never before has
been 50 striking testimony to the value OF big
names as bait in winning money from British
investors, Lord De in War;. Chairman Of the
hoari, received G2j.0OO cash for the use Of hi.
name. according 70 Mr.. Hooley's testimony
and Lord Albrnarle E25.OOO more. But ap
parentlv Mr., Hooley was not quito sure tina
lor! Albemarle received his G25 600. for thii
was his evidence on that point:
Q;31Was that paid 70 Lord do la VAR onI,
a.E ei' tRin Si"I + ! Pnid TEiii m a e5y. 0 GJI'r aI fliSSI%s
E23,OOO for himself and &25.0Op for one OF tn
On cash or shares? Ain cash.
NJ Syn y0n tell me howthS amount was spli
Min' f:mMet the Duke OF somerset had noth
u3mDia L L AIRe@9qrlG have anything A.
Q-Yon mean he did not know what tn
original amount was that you paid! AHA
board .IITh 6TG t mere Two Other directors on thi
A'SThne"yy were yS% PAID a Zee oi ee26, 90. '2TfRS They II
great deal 4 work and assisted, me a greg
they ought to have IL.
4 fat fee that of 100000 for a few day.
work in registering a public company! Ru
then, the lawyers were an eminent firm an
their names were valuable on that importar
front page OF Il prospectus"
Nh. Hooley then took up the interesting iteI
OF expense. best described as bribing the pres
This expenditure In connection with bringin
out the Dunlop Company amounted to no lei
than S3l7.OOO! Not one penny Of this was Il
Legitimate advertising. the latter expendltu
forming a separate item. MIR. Hooley's lacon
description oi the usual method OF press brihei
Is very much to the point. This is it:
ON addition to those shares you gave viii
A.-les.
O.-What are press calls or shares? AL he
q mar, called Broadley. who arranged all II
advertisements and everything said in Il
press. aud whatever calls he wanted he had.
apnot know the names Of the papers.
FQ.EWhat Do you mean by a " press call
Al would be Tor somebody connected wit
.QT7,D9 you mean they wsere to have the rigI
Rcal upon shares at par? A!--IeS. and gat 4
etiolment The - press calls" amounted
-Would any call be- delivered at less tn
Pr All do not know. You have. the bool
there; These calls would he given Tor abort
n2Ntli Y ant!l the -pecial settlement
pid you purchase these calls back you
ket Al don't know. Ibooght in the ma
,et' never, bought them beck from the pa
g. IIasct was at hat time purchasing
~ ~ hat did you ray A.-27s. i'd. ~
~ @lr a share. On the press calls" Rlol
lost some EtSi, 300.