The sun. [volume] (New York [N.Y.]) 1833-1916, 1911-09-24

name was the chief drawing card of the
business is 81 years old; shortish. stout
ish man with gray hair. Who gave his
public record in a low voice and made
no protest against the proceedings ex-
cept through his lawyer. Schiller was
described by Smith as the man who worked
in the Office with Flagg and who. with
Flagg, did the hard work and handled
the money He lives at College Point.
jackson said that he formerly had been
connected with Flagg, but for the last
three years had been with the brokerage
firm of Levitt X Grant and that this
firm had been one of those through which
Flagg bought and sold his stocks.
The business which Flagg has been
doing. was likened ny the inspectors to
that once done by 500 per cent. Miller
The inspectors have a record Of between
900 idsd 1000 clients Of Flagg's who have
paid jn. the inspectors say, well over a
million dollars In every case 40 far
as the nspeC: ors have been able to learn.
the per oent a week dividend has been
paid regularly. When customer desired
to withdraw. however. the inspectors
say that. at least in one case they looked
into, he was unable TO get his principal out.
The investigators do not expect to find
the customers seemed more than pleased
with their little 50 per cent a year and
were not worrying about any future day
of reckoning The post Office people
allege that these dividends. of SO per cent.
a year were paid out of the money paid
market operations Of Flagg were COM
paratively small What there were Of
these operations were conducted. accord
ing to the investigators. through the
L. \ 4 lot
Bros and Mcdonald 4 Co. Early IN
August President Jarvis of the Consoli-
dated Stock Exchange ordered firms IN
that exchange not to take business from
s,rsgnr rlnSg ss fG en am rsfSsns re
accept his orders and went on with his
business
All of Flagg's customers signed an
"order contract" irstructng Flagg to buy
for the customers account and risk
ten shares of each of fifteen named stocks.
all standard shares on the Stock Exchange.
to be sold for the customer when the pur-
chase showed "A profit of one point or better
and to be bought back whenever the price
was a point or more below the high
There was another list of nineteen stocks
on which the reverse of this operation
was to be employed. Flagg's commission
charges under the contract were to be
one-fourth of per cent for buying and
the same for selling The contract au-
posted with him or carried by him for
customers and to pledge than as COL
lateral tor Flaggs loans
Something like a month ago, and after
the Post Office Department had begun
its investigation of Flagg's business.
Neely went To Chief Examiner Dickson
and complained of the investi CATION. ac-
Cused the inspectors of various things
and said he was going to the Postmaster
General with the matter. Dickson ad-
N A
with the United States Attorney.
Flagg, the chief figure in the raid. has
written "A book which he called AFlagg's
Flats about those we'll known buildings.
The one count in the indictment against
him which held recited that the house in
question was an i'll governed house in
which men and women of evil name and
fame gathered and in which there were
tipping. drinking, gaming, cursing.
swearing, gambling and great noise.
Next, in 1904, he appeared as the pos
SCISSOR of, a license to conduct an agency
for inexperienced chorus girls at 10
Fifth avenue. The Commissioner Of
Licenses refused to renew the license in
cations and by the Association OF lheat-
rical Managers. At THE time Flagg said
that 700 young women were paying him
81 year tor registration.
Daniel y. Morgan's pane appeared
as that of treasurer of ihd La Luz Mining
and Tunnel Company. IN which Frank
Conrad Helm was the leading spirit
and which came 10 the attention of the
Post Office Department in 1905. The
Electric, Gas Lighting and Heating Com
pany of America, of which in 1907 Mr..
Morgan appeared as vice-presdent, was
promoted 10y l.. f.. Pike 4 Co.. with offices
in the Metropolitan Building. The COM
pany, the literature informed its readers
was capitalized at S3.OOO,OW and the
par value of the shares was s25. although
the circulars added that the stock prob
ably would be selling at $500 before long
The only reason the general public was
let in on the proposition at all was be
cause the company needed money to do
some construction work
One of Neely's former connections
was with the Afterthought Copper Com
pany. which absorbed the Great Western
Gold Company. Neely went to st. Louis
in 1910 to float a $5OOOOO loan for the
company but a receivership suit filed
by a stakeholder interfered. Neely is
book publisher at ia Fifth avenue. He
failed in 1899 with liabilities of $500, 600
and starting up again failed second
time in 1903
Persons who invested in DR.. j. Grant
Lyman's enterprises wondered yesterday
whether Joshua Brown. one of the aged
men arrested in Yesterdays raid. bore
any relation To the head of the old firm OF
Joshua Brown h Co., which doomed In
ternatonal Zinc some years ago. Mr..
Brown appeared at yesterdays affair as
one of the minor characters.
Some idea of the prosperity of
Flagg's business may be cleaned from his
offer. made after the bail had been set
yesterday. to go down to a safe deposit
vault in charge of detective and get
$87 500 in cash and give it as cash bail for
the Lot of prisoners. The offer was re-
fused and District Attorney Wise said he
would not accept cash bail Flagg's
lawyer said the broker had about $500, 900
in cash on hand. Fagg lives at the Pa
terno apartments. ll6th street and River
side Drive,
PLAINFIELD, y. j., Sept. 20 3.--James T.
Schock is IA retired clergyman Of the
Dutch Reformed Church, living at %
Albert street this city. Before leaving
the ministry five years ago, he held pas
torates at keyport, Cranbury and Bound
Brook. Before going to Bound Brook
hs was principal Of Bernardsville public
school He has lived in Plainfield for
five years and in the absence of the Rev.
John Nouk"rS Brock he has preached
hh,Trnity Reformed Church
Mr., Schock II IA graduate of Rutgers
College and Of Rutgers Theological Sem
mary. he has one daughter, Mrs. James
Close Of Madison avenue, Painfeld. His
wife died ou August 90,
BRIDGEPORT, Conn, Sept 23-Daniel
y, Morgan is rcputod To be very wealthy