Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1911-09-26
Postoffice Authorities Aft
sr 100000 in Cash.
Believed Kept as Reserve Fund
By Accused Brokers.
Flagg and Joshua Brown Released,
Monday, on Ball.

New York, Sept 25.-After spending
che better part of two Gays in the cit,
prison. Jared Flasg, the broker, eX.
United states treasurer, Daniel l.
Morgan, the Rev. James T. Shock and
as many others who were arrested Fri
day in the raid on Flagg's office were
released from the Tonhs today on bail
aggreeating s65o90. The greater par
of the sum was furnished by a surety
company, including the $4,000 required
for Morgan, Shock and Attorney Alvin
II. Higgins. Ernest Flagg, an archi-
tect went on the bond of his brother
for 5000.
A ninth arrest in the case was made
late today when post office inspectors
took into custody Elbridge T. sewall,
the cashier of tho. raided brokerage
firm. He was held in $4,000 bail. which
had not been furnished tonight.
After his release Flagg renewed the
charges that he and his associates
were the victims of a conspiracy.
New York, Sept 25.-The post office
authorities today took steps to lay
their hands on large sum, said to be
more than 100000 in cash. which they
believe was kept in reserve by Jared
Flagg. Jr.. and others who were ar
rested Saturday charged with siolat-
ing the postal laws to defraud inyes-
tors
Flagg ard his alleged associates.
Former United States Treasurer Dan
iel n. Morgan. F. Tennyson Nicely,
the former publisher, and others spent
Saturday and Sunday nights in Jail,
but today the federal officials expected
they would produce cash for bail. in
spite of the fact that the court will
require $4,000 before releasing them.
TO prevent the accused stock
brokers from reaching their reserve
fund before the federal authorities can
get control OF il, the post Office in
spectors prepared TO have some Of
Flagg's customers file a petition in
bankruptcy against him. In addition
10 ss1. 600 IN cash which tho inspectors
declare Flagg and bis partners kept
in a safe deposit box, it is said that
$l91 DOC has been received from Gus
toners since Sept. l.. indicating the
magnitude of the business contributed
by investors.
Ffagg maintains that his profits av-
sraged s. per cent, but declares thatl
every dollar was made through legiti-
mate Stock Exchange transactions.
The federal officers have collected a
number of witnesses four of whom
they say, have turned over to Fslagg's
concern as much as 100000. The gov
eminent charges that Flagg's scheme
was TO pay customers this immense
dividend for short, time after their
investment, taking the money from the
principal invested by his small army
of customers. Three wagon loads of
books and correspondence seized in |
Saturdays raid on his brokerage con-
Germ are being examined for evidence.
by far the largest number of custom |
ers outside of New York City. live in
Bridgeport. Conn, the home of Daniel |
n. Morgan. Ithaca. \. Y, is said to
be "a close third and Franklin. Pa,
next.
The detectives say that the weekly
luneheons given customers at FAM
GUS restaurant near FlaGg's offices
were strong feature of his campaign
At these functions no. expense was
spared, although the conversation sell
dom touched on business.
Alvin NJ. Higgins. the lawyer who is
said to have been the legal adviser OF
Jared F1agg, and who with Flagg and
six other men, Was taken In the
roundup, made OH Saturday. was the
first of the prisoners TO secure his re-
lease on bail today. The $4,000 bond
required b. United States Commits
sioner Gilchrist was furnished and the
lawyer was released.
A pretty 19-year-old girl is said TO
have played an important part in
F7agg's financial operations and post
Office inspectors hoped to question her
today.
This afternoon Flagg was released on a
bond for SIS 600 given by his brother Ern-
est. Joshua Brown furnished bondsman
for s25a0 Brown is accused of being one
OF the firms 'icappers,"
The post Office inspectors said they ex-
pacted later in the day to arrest a man
and woman employed in Flagg's Offices.
Tho inspectors exhibited a booklet writ
ten by Flagg entitled .'How to Make
Money Out of Wall Street. in which the
author asserts that his system is founded
ION the rocky bottom of mathematical
certainty"
Postmaster General Hitchcock took UNI
der personal inspection today the Jared
Flags case.
1.-THE case is one of the most importan
that the post Office department has han
died for years" he said. II want to ex
press my qualification to the inspection
officers here on the manner in which the1
have handled it. They have done mos
admirably: all the post Office men con
cerned have done excellent work"
Warren L., Dickson, inspector in charge
Mr.. Hitchcock said, had practically han
died the entire case from the beginning.
UPON FARMERS.