The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1910-11-22
Two Concerns Charged With
Fraud Are Closed Up
HITCHCOCK LEADS RAIDS
Brokerage Company and Wireless Tele-
graph Concern Are Victims of the
Vigilance of the Postofice
Department

New York, November 21.-In raids so
important that Postmaster General
Hitchcock took charge in person his in
spectors fell on two concerns this after
noon which they charge with swindling
the public out of more than $40. 0Oo,ooo by
fraudulent use of the mails.
Sheldon H. Burr. president of Burr
Brothers; Eugene III. Burr. secretary and
treasurer of the firm, and Frank H.
Tobey, its vice president were arrested
in the first raid and held in $4,000 bond
each The government charges that the
firm sold between s4o.ooo,0oo and $4,000, 900
OF mining and oil stocks worth little or
nothing
Charles L. Vaughan, a director of the
Continental Wireless Telegraph and Tel
ephone company, incorporated In Arizona,
was taken in the second raid and held in
$4,000 bail. Inspectors say his company
has sold stock to the amount of at least
100000, which has brought in no re-
turn to the investors Vaughan is treas
urer of the Columbia Finance company
which acts as fiscal agent for the Con-
tinental Wireless Telegraph and Tele-
phone company and had charge of the
Continental offices in this city.
Both raids today are further evidence
that the government in its warfare
against alleged interstate swindlers
means business and no longer will be con-
tent with Issuing fraud orders denying
them the use OF the mails but will press
for convictions on criminal charges.
The present campaign began some months
ago and has resulted In the arrest of
Louis Celia and his associates charged
with operating a string of bucketshops;
the officers of the United Wireless COM
pany, the FL Progresso Banana COM
pany. the United Exchange of Chicago.
the Steele-Miller Cotton firm at Coriuth.
Miss, and more than 90 other firms in
all parts of the country.
Public Loses Millions
that thY public has been fleeced out On
AT least y10o.ooo,oe0 by get-rich-daiek con-
Germs in the last five years. but says that
their ''heyday" has gone. The post
office department under the present ad-
ministration intends to keep after them
every minute and Postmaster General
Hitchcock said today that other arrests
involving corporations that have sought
investors the length and breadth of the
country are expected shortly. His state
inent follows:
THE arrest today by postoffice in
spectors of the principals In two i'm
portant companies. Burr Brothers, with
offices in the Flatiron building, and
the Continental Wireless company with
headquarters at 56 Pine street, consti-
tute two more cases in the series of
Investigations that the postal author
tiles have been making in their cru
sade against the fraudulent use of tn e
United States malls. With the work ac-
complished today IS such cases have
been brought to a head during the
year. It Is estimated that the swind-
ling operations of these rs cases have
filched from the American people in a
period of five years over 500, 100000.
Carefully Laid PInn
THE crusade now in progress is the
result of carefully laid plan of some
months ago. the first step In which was
thorough reorganization of the in
spection service with the selection of a
new chief postoffice inspector and GER
tain charges and reorganizations were
effected Instructions were issued to
the newly assigned inspector in charge
to take up and prosecute vigorously all
pending cases of frauds against the
mails. Owing to the extent of these
cases and the large amount of work
involved, it was necessary to detail a
considerable portion of the force of
postoffice inspectors.
"1'he best in the service were select
ed for this work and sent to their tasks
with the assurance that the depart
ment at Washington would back them
up to tAs fullest extent In order to
strike at the root OF this evil the de-
partment directed it's agents to go after
the men higher up In these gigantic
schemes to defraud and to allow no
influence however powerful to prevent
the proper punishment of the Offend
ers. Through the assistance OF the
Attorney General the full co-opera-
tion of his department was secured in
the successful carrying out of this
crusade.
LAS the work of investigation pro-
ceeded 1t became apparent that the
fraudulent use of the mails was far
more extensive than had been realized
by the department. A vast system or
fraud as far reaching in its ramif-
cations as the postal service itself had
been developed by unscruplous mon
who, through the grossest forms OF
Misrepresentation, were stealing from
the people millions of dollars annually.
These fraudulent operations have not
only swindled thousands of innocent
investors but have created a lack of
confidence In legitimate business en-
terprises. 1t Is. therefore, as import
ant to the business community to have
tneSe IFauuS stopped as IL is 10 the
people whose losses are directly trace
able to them.
Different Procedure
Formerly the procedure In such fraud
cases was entirely different. 1t was the
practice to issue fraud order against
the guilty concern. This method proved
to be ineffective, so while It deprived the
offending concern OF the use of the mails
1t was simple matter for its promoters
to reorganize under a new name and thus
evade the law. In the departments pres
ent crusade the practice has been to pro-
ceed Immediately to the arrest of the
in the fraudulent enterprises.
the object being to secure prompt convic-
tion and Imprisonment. The results al
ready accomplished by the department
represent the beginning. The work of in
vestgation and prosecution will proceed
with all possible vigor until the swindling
of the people through the use of the mails
is brought to an end"
The specific charge against Vaughan set
forth in the complaint of William b. Rob-
inson, postal inspector. Is that on June 4,
1910, lie devised scheme to defraud Wal
ter n. Altman, of 2001 Clay street. To-