The Hawaiian star. [volume] (Honolulu [Oahu]) 1893-1912, 1910-07-28
UNITED WIRELESS
TELEGRAPH co.

CAACCu W hClSSS JSiSSldDu SJOChJ re-
Gently palmed off in this city by one
| W. A Scale, representing the Seattle
office of the concern-should be in
terested in the following from the
financial pages of the last Munsey:
| The affairs of the United Wireless
Telegraph Company have attracted
much attention of late, in consequence
of the arrest, at the instance of the
| post-office authorities, of G. G. Wilson
and Seth S. Bogart, president and vice
president of the company, and of w.
W. Tompkins, president of the New
York Selling Agency, which acted as
the fiscal agent of the company in
marketing it's stock throughout the
country. The charge against these men
is that they used the United States
mails for the purpose of defrauding
would-be investors.
The affair is of peculiar interest to
investors, because it may be regarded
as typical of form OF exploitation
which has reached enormous proper
lions in this country. / refer to the
case of men having a fair or even
meritorious undertaking, which APP
peals to the popular fancy, but which
is not subject to the restraints i'm
posed on security issues by stock ex-
changes. Acting through alleged sell
ling or fiscal agents-for whose asser-
lions and actions, when the time
comes they disclaim responsibility
such men are simply flooding the coun-
try with prospectuses, and selling large
,amounts of stock to credulous per-
sons.
In. extreme cases, little of the money
received from the public goes to the
development of these enterprises, but
the sales Of stock continue without
supervision, furnishing a tremendous
revenue to the promoters of the COM
pany, or to their selling agents. In the
present instance, a post-office inspec-
tor is quoted as saying that while
the selling price of the stock-of which
nearly fifteen million dollars, par va.
, lue, was issued-was boosted" from
time to time, by artificial means, to
as much as fifty dollars per ten-dollars
share, the. actual value of the real
assets, consisting of land stations,
|, patents, Neutrality-suspicious., and
real estate of all kinds, appears to be,
on a conservative basis, about four
= hundred thousand dollars"
: Continuing, this government official
: is reported as saying:
There are about twenty-three thou
, sand stockholders in the United States
The operating expenses have been
! much greater than the receipts, and
the total accumulated surplus of $6,5S2
$50, as shown in the balance-sheet OF
December 81, 1909, is fictitious. The
asset, stocks and bonds In other com
. panies, $14 ,148,610," shown in the lat
ter, refers to the "defunct American
: DeForest Wireless Stock" which was
j, received in exchange on the basis OF
! ten shares for one share of United
}. Wireless stock. The treasurer of the
company has admitted that 100000 OF
4 the 1917, 449 cash" is fictitious. The
patents and patent-rights, placed by
e a firm of licensed accountants at 500,
: $685. was arbitrarily increased to IS,
52O233.
While the officers of the company
p were privileged to sell their stock
Y the outside purchasers were, it is sale
y required to accept stock certificates
stamped mot transferable until Feb
e ruary II, 1911" thus enabling the off
}. GERS to make improperly an enormous
; amounts of profits.
: The arrested officials deny the
= charges of the post-office inspector;
q but the company's balance-sheet o.
, January / last is damning affair. II
placing total assets at $25,272,219.15, il
J. includes such bloated items as patents
and patent-rights, $5,005, 1907; Urea
sury stock, $5,310,410"; "stocks ant
e bonds in other comprehensive de
. funct American DeForest Wireless
$14,12S,610," and sundry other items
OF course these tremendously inflated
figures were used to balance, and APP
- parently justify, an authorized CAPT
talization of no less than twenty mil
lion dollars, which the officials
. through the fiscal agents, have beer
-. selling, and which is now in the hands
Il of more than twenty thousand share
i holders.
e How many companies are working
l. in the same way-companies that ma!
f have fair or even meritorious PROPOSE
lions, but over whose stock issue
Il there is no supervision, and who's
= activities are chiefly in selling stock
not in developing their enterprises
The trial of the arrested officials o
= the United Wireless Company will