New-York tribune., 1910-11-13
GET PROMOTERS IN RAID
Five Banana Company Officials
Arrested on Fraud Charge.
A PREACHER AMONG THEM
Postal Men Declare Honduras
Plantation Was Nothing
More than Swamp.


several officers and directors Of ii fTo-
,raeso banana COMPANY and the lnterna-
tjonal Finance Company were arrested yes
-ar6av AZ the office of the latter company
The oauture was made by Postoflce IN
spectors Elmer Kincaid and T. Nj hedUS'
who were assisted by Detective Lieuteilaii's
Nillr,ore. Arrsstrone and Reich, whc were
sneciaIlv detailed by the Police Department.
TO help tie fedei al officers
Frank ). watrous president OF I'll fro-
gresso Banana Company, reacheo Ne"
York early yesterday. after an absence VI
three or four months, during "hich ne
visited Honduras where the company was
said TO have a large banana plantatlon-
He was in the Office, with II. l.. Harvey
president Of the finance company, Wheh
the officers came in While they We're
there William I. Sanders, secretary or the
finance company, arrived and greeted every
one effusfvely, but was greatly surprised
rher, tod he vas under arrest
As the officers were about to start away
with their three prisoners they met .. w
Simmons, secretary-treasurer Of the ba-
mana company, and he too, was placed
under arrest.
After the detectives had gone 10 the Fed
eral Building with the four men then under
remained behind TO superintend the pack
ing of papers which they seized as evil
denoe, met the Rev. Claude N. Severance,
8 director of the banana company, just as
he was entering the building. and he. TOO,
was taken into custody.
Held in Default of Bail.
When arraigned before Commissioner
Shields, Watrous the alleged promoter Of
the banana company, was held In default
OF $4,000 bail. The Rev. Claude NJ Sew
erance who lives at Twelfth avenue and
I'D street Borough Park, Brooklyn, failed
70 obtain $500 bail, and O. ". Simmons
could not produce bondsman for $500
Sanders and Harvey were released n $3.50
bail.
According TO the postal authorities, Frank
". Wetrous, a native Of Boston, went
broke IN Denver toward the close OF 1908
after being interested in some mining deals
He is alleged TO have gone then TO Houston,
Tex, where he was helped by some friends,
and later raised money on his mothers
home and furniture in Denver and organ
tzed FL ProgreSso Banana Company, which
he capitalized at s., sos, 600, IN Arizona, in
January, 1903.
Coming to New York, II is said by the
postal authorities. Watrous got in touch
with Sanders and Harvey. Their concern,
the International Finance Company, ar
ranged 10 dispose Of El Progresso stock at
% cents on the dollar. OF this. it is alleged,
70 cents went 10 the banana company and
the remainder to Sanders and Harvey, but
the postal authorities say that the com
mission was divided with Watrous, who
conducted a correspondence with H. l.
ba
With the proceeds OF the stock sold Wat
rous opened an office at Chattanooga
Tenn and later went to Honduras
From La Ceiba he wrote in February, 1909
that the company had secured seventy
thousand acres of land and was engaged il
planting bananas. The postal authorities
say that the company. under the laws OF
Honduras, could not own property in that
country, but Watrous had got a few thou
sand acres under what is known in Hon
0uras as announcement
Glowing Circulars Written.
The conditions under which he got the
property was that quarter should be I'M
proved and planted during the first year.
While no work was done. Il is alleged.
Watrous wrote glowing circulars, describ-
ing the splendid agricultural lands. and he
q
Morales, a director Of the company, who
1old Of the fine banana plantation, cover
ing 1880 acres With the proceeds of
stock sales, the postal authorities say, ne
enlarged the Chattanooga Office, put his
brother-in-law, o. ". Simmons, in charge,
then came North and married Miss Alice
Fernald, of Roxbury, Mass, who now lives
at her old home. He took her to Hon
duras shortly after their marriage and as
the announcement" conditions had not
been fulfilled the land was forfeited 10 the
government
WatroUs then, with the assistance of q
lawyer named Meiser, tried to get a con-
cession from the Honduran government.
He was see-sawed by the officials but
finally succeeded in getting a concession
of ten thousand acres for which he was to
pay $1,000 silver. He was also TO survey
the land and build railroad TO the coast.
None of these conditions was fulfilled, but
the sale Of stock, 1t is charged. went on
nerrily through the International Finance
Company, the principal salesman being the
Rev. Claude NJ. Severance, who had al
ready acted as a stock salesman for other
companies
A sample Of the alleged letters sent out
by Severance to other clergyrnen IS in the
is addressed 10 the Rev. D. C. McNair, OF
Wayne, Mich, and, among other things
said:
Il am decidedly well pleased with Mr.
Watrous. He is a clean gentleman; does
not drink, does not use tobacco; he IS in
terested in Young Mems Christian Associ-
alton work There is no appearance
Of trickery in him. He has a magnificent
presence, is winsone and inpresses you
with great reserve strength. I urge
you now 10 join US and to sell stock tC
your neighbors with the perfect assurance
that you VIII all double your money in a
year and secure an investment which viii
mean d large annual income. You
are justified in working night and day tC
secure two thousand shares for yourself
for you would be self-supporting in three
years time with such an investment"
Say Plantation Was Swamp.
The Rev. D. c McNair bought two thou
sand shares al 80 cents q share but later
the stock went TO - cents The only ship
nent made by the compan5, il is alleged,
was a lot Of six hundred punches Of
bananas. which the postal authorities say
were purchased from others, as the COM
pany had not even an option on banana
lands. thet which they had being value
less swamp.
On receiving complaints in July W "
Dickson, postofice inspector in charge of
this district uur Kincaid and Pada,- "a