Atlanta semi-weekly journal. (Atlanta, Ga.) 1898-1920, 1901-12-26
ALLEGED SWINDLE
STILL UNDER FIRE
REMARKABLE STATE OF AFFAIRS
DEVELOPED BY INVESTIGATION
BIRMINGHAM DERENTURE CO.

BIRMINGHAM, Ala. Dec. A.-As the
affairs Of the Birmingham Debenture he-
demption company are probed the more
sensational become the developments. w.
I. Dodd. who was secretary and treasu-
rer of the company up to the time IT was
sold to G. w. Morgan, president OF the
Continental Security Redemption compa-
nv. and was absorbed by that company
is on trial before United States Comnils-
sioner Cornish on the charge OF Iraudu-
lent use of the mails.
The evidence tends to show that the
birmingham Debenture Redemption COM
pany was organized with capital OF only
5000 and that but 20 per cent or this was
ever paid up.
The business was carried on for about
year and then the stockholders sold out
to George w. Morgan. The total amount
paid by Morgan was $12,50O and, the most
remarkable feature of the case Is that this
amount according to the evidence. seems
to have been paid out of the assets OF the
company. 1t is alleged that Morgan PAID
the stockholders in checks and asked them
to wait a few days before presenting the
same to the bank They complied with
this request and, It is alleged, Morgan
took charge of the company In the mean
time and when the checks were many
presented for payment the money which
they were paid came out out treasury or
the company. 1t is alleged that there
was something over $4,000 in the treas
ury of the Birmingham Debenture Re
demption company when 1t was sold and
that there were notes besides. The stock
holders of the Birmingham Debenture she-
demption company required no bono OF
Morgan to secure the carrying out by
him of the contracts wnlcn hao Oeeh
made.
The principal witness in the case has
been Captain Reuben F. Kolb, who was
president of the Birmingham Debenture
Redemption company at the time the sale
was consummated. Captain Kolb Is one
of the most prominent men in Alabama.
He was three times a candidate for gov
ernor He told of the organization OF the
company and expressed the opinion that
the scheme Of operation was feasible. he
said that the company was organized with
s.. 900 capital but that only 20 per cent OF
this amount was ever paid up; the enter
prise being launched on an actual capital
of 81, 200. He had 100 shares of stock, for
which he paid $500. When the sale oc-
Cured he received 5000 for this. He said
that he was asked by Mr.. Morgan to walt
a few days before presenting his cheek
for payment and that he did wait nine
DAYS. He said that he did not know tnat
the checks issued by Morgan In payment
for the stock were finally paid out OF the
money that was In the treasury OF the
company when the sale took place. de
was shown some Of the literature Of the
company on which II was set forth that
the treasurer was under $4,000 bond. He
said that the treasurer was originally
under $4,000 bond but that meeting
was held after the advertising matter
had been printed and the security COM
pany was released by resolution from all
liability over 5000. He said that he was
40 It'll kI1o 0n n
simply signing the certificates In blank.
The active management devolved upon the
secretary and treasurer, w. L. Dodd.
Another prominent witness was Henry
B. Gray, vice president of the company
at the time of the sale. Mr.. Gray Is
president of the Peoples Savings Bank
and Trust company and is treasurer OF
Jefferson county He testified that he
knew absolutely nothing Of the operation
of the company and that he went into 1t
at the solicitation of Captain Kolb, w. L.
Dodd and w. d. Lee.