The Bridgeport evening farmer., 1911-12-01

This small city had never seen any thing like it before. And never a word about losses came from Union street. Hired agents passed among the towns people and neighboring countryfolk so- liciting investments. He had a won derful system for making money.
 What is this system,' was asked. We do not know replied the agents That is his secret but he is willing to let you in on the benefits"
 GOLD POURS IN.
 The money rolled in. Branches were opened in Whitingsville, Mass, and Keene, N. H., with the same success. If anyone wished, the banker would pay back interest and principal on investments But who wanted to take out a dollar when, by leaving in the magfcians hands, 1t would multiply? So instead of receiving their profits in cash, the investor would accept a new note. While the stream of gold came pouring in, nothing but promis- eS went out. %
 Arnold ingratiated himself with the best people in town. He invaded re- iigious circles and got pastors and their families to invest with him. He rode about the town in a big auto mobile and he had a private chauf- feur. Even his employees trusted him with their savings.
 Here the tide began to turn against the financier. He began buying real estate. He would buy anywhere, whole blocks at time. He put up costly houses and rented them at prices that returned three or four per cent. upon the investment. A few longheaded lo- cal businessmen knew this and mar yelled. His customers evidently never gave the matter a thought
 Just what caused everyone to de- mand money-real cash-from Arnold at this time, no one seems to know. These demands must be met Or the bankers prestige would be lost. He had no money!
 Tn his desperation, the man promis- ed anything. On one loan of $500 he promised $50 month interest-and paid it for several months.
 This could not last long, The gold en stream exhausted, Arnold began to fail to meet some of the notes now due on his real estate holdings, he gave C.NS. Andem, his largest credi- tor, $22,300 mortgage June 3, 1910. The news of this deal brought down on Arnold's head a flood of creditors. They demanded money. He had none. Where had it gone? His real estate holdings as valued by himself amount ed to $163, $50, on which were mort gages of $9S.497.50.
 DECLARED BANKRUPT Arnold was declared a bankrupt, on Oct. z, 1910. In the meantime his property had been attached. The great moaning and lamenting that went up here in. Putnam made it dan gerous for Arnold's personal safety. He left the city for a few days but came back as suave as ever.
 On the witness stand he argued that he was not to blame, that his investors brought his house down upon them ce1x l1 1oox hi hiv,o a1o The public now had a chance to look upon the wreck. According to- Arno' d's own statement, his total lia- l bilities were '$732, ,267.7S, of which $60S,- 243.5S, was unsecured. He claimed as- l sets of $473, 2S6.69, of which $250, GOO was worthless stock accepted from invest | ors and credited to their acts at face value. He included life, fire ana acci- | dent insurance policies among his as- sets. At the time he filed his schedule | it was seen that not $40,000 could pos 1 sib,y be saved from the wreck, and to- day, it is doubtful if a fourth of that will be left for the creditors. | Among Arnold'S books produced at 1 hearings was one used .o record stock | transactions in 1905. It showed great l ly predominating losses. He neglect | ed to keep it after a certain date, His | memory on the witness stand was 1 wretched. He must have made mon- | ey. he Said. but he did not know Iwhere it went. He said he put up margins with brokers of from 10 to 50 | per cent. When asked to show what | he had for all the money he borrowed, l Arnold pointed to his heavily mort | gagged real estate and the quarter mill | lion worth of worthless stock. He | said he did not consider notes that 1 had not fallen due as indebtedness. | This was Arnold the financier. If
 Arnold has money laid by as some | loudly c jim, none have ever found it. He strengthened out several transac- tions in which he was charged with
 having received moneys to buy certain stocks which he never bought and with having received stock to sell and re- turn proceeds to owners which he nev- CT did Criminal action against him
 has been threatened but never realiz- ed.
 And Arnold is doing business, to-
 day.. at the same o'da stand. Some of
 those who were his harshest critics at
 the time the bubble burst, are again
 lauding his shrewdness and claim tc
 be pecketing their weekly profits. AT. | mold himself is soliciting his old GUS
 toners with the same assurance ot
 profits by his system.