New-York tribune., 1909-02-12
GAS REBATE WARNINGS
COMPLAINT AGAINST An
AUDIT COMPANY.
Promoter of Scheme Says Use OF
Federal Judge and Commission
er's Names Vas Mistake

4
Agents representing a company orsaili1eu iVi
-. ,,,-,ose of collecting gas rebates for con-
,,-,,e-s entitled 10 part of the millions await
inc 5s+-iEl11jon under order of the Un''ec STATES
s-irruit Court were said yesterday to nave useo
the name Of Commissioner Shields without au-
.4ov5za+ion Complaint was made TO Judge
1,aconohe that they had represented that the
Commissioner had agreed 10 the bonding at
81 eoo each Of twelve men forming the Gas CON
srrners' Audit Company. and that the agents
were collecting 81 as fee for getting the re-
bate
I. was deried later in the day by A L. Rowe
counsel for the company. that the concern had
,,sse such representxtions. ne said that II
had received the right TO do business from the
-onntv clerk. and that if COMMISSIONS
shields's name had been used by agents in the
way complained Of they were acting entirely
without orders.
Judge Llacornbe, as soon as he received the
cornn,sint called fn Commissioner Shields. and
each prepared warning 10 gas consumers
Judge I.acombe's memorandum follows;
An nersons entitled TO a refund from the
-,oneys deposited by the several gas companies
are notified again that under the regulaCionS m
sY,nroved by the court they VIII receive the re-
bates promptly and without trouble or @ eApeIse II
~ they will hold their receipts and notify the
-or1nanjes of any change of address. Those OF
them who assign their claims, or who sign CON
tracts with soliciting agents TO prosecute Ine
experse and are probably postponing the uhle
when their refund can be made
Commissioner Shields followed this with
seclsratton that as information had come 10 him
that agents representing various alleged audlt-
ing companies were using his name In coiiec-
ton OF gas receipts he wished TO serve notlce on
.be nublie that such representation was entirely
l1sf F1a
consumers. who already had been warned by the
co,5r+ sho-la look to It that they were not de-
4rsr5ed Of their full rights. He had not au-
sha-ized any agents to collect gas receipts he
said
II was said in the Federal Building that the
audit corupazy was not doing anything Illegal
and that the uss Of Commissioner Shielos's name
undoubtedly was due 70 overzealousness on the
mart az TIE one hundred or more agents sent
or4 The contracts made so far were for about
$4,000 of the gas refund money. and this repre-
sented the work OF only eleven days
Following these warnings. A L. Rowe, attor-
,ex, for the Gas Consumers Audit Company, Of
No 2s5 Broadway, made statement to the
effect that he had advised his clierts that the
-,u-chase of gas rebates perfectly legal and
mat they had applied for and received from
the County Clerk the right to do business under
the name Of the Gas Consumers Audit Com
many other than that he said, he had had
little to do with the concern except TO rent it
desk room and telephone service in his ONCE
and advise it in minor points Of law
a man who gave his name as James E Smith,
formerly a manufacturer of stationery in New
arl. \ / said in broken English, that he
originated the scheme and that he had the back
ing of Joseph Miller who. he said was a cap
itaIist living at the Waldorf Smith said that
he had been doing business eleven days. and
that he had bought about 5000 worth Of gas
rebates
II advertised for agents. and have twenty men
AZ work in different sections Of the city" he
said. The use of Commissioner Shields's and
Judge Lacombe's names by one of my agents
was unauthorized and unnecessary. can ac-
count for it only by the fact that our contracts
were drawn from a similar contract IN which
their names were mentioned. / took particular
pains 20 specify on our blanks that reward of
500 would be paid for the arrest and conviction
uf sny person using our claim forms for fraudu-
lent purposes. This was with the idea Of pro
teeting and safeguarding the public further
specified that promises agreements not in
cluded IN the written contract were void.
When asked the terms under which he did
business Smith said he made a charge Of 25
cents when client signed the application and
rs cents on delivery OF the rebate. He said he
paid from so to 20 per cent Of the face value
OF the rebate, and in some cases. when the
client did not wish 20 sell outright, he agreed
20 accept E per cent commission on his deliv-
cry OF thepayment made by the gas company.
Smith sesd he gave his agents 25 per cent OF
their collections, and required them to deposit
real estate bond Of $500 SIS in cash. or, in
case they were unable TO do either, he withheld
so per cent OF their commissions until s25 had
been paid
AS an added tnducement 20 prospective clients
the company agreed TO give free legal advice in
civil and criminal action for one year.
Judge Lacombes warning followed complaint
by woman living at No. <76 East oath street
who seid tha. al agent Of the company told
her that Commissioner Shields had authorized
the bonding Of the company. made up OF twelve
men, each bonded at $1,000