Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1912-12-23
Sterling DebentuTe coTpo-
ration Reaped Millions.
Hundreds Of New England Peo-
pie Among The Victims.
Most Of Stock Sold Was Of Abso.
IuteIy Worthless Concerns.

Washington. Dec. 22.--The police de-
partment, Saturday, made state
ment concerning the operations of the
Sterling Debenture Corporation, whose
offices in New York were raided. Fri
day, and half dozen men arrested.
1t says:
This corporation, which has been
doing business only since 1906, it IL
estimated conservatively, has sold APP
proximately $33, 000 900 of the stocks sf
the various companies Represented
Considerable of the stock sold by this
corporation was OF legitimate oomra-
MES, but an enormous amount of the
Germs, whose stock was absolutely
worthless.
The Investigations show that the
Sterling Debenture Co, retained from
80 to 55 per cent. of the money derived
from the sale of the bogus stocks Of
such corporations as its commission.
The business of selling the stocks OF
legitimate companies was not nearly
so profitable, the commissions amount
ing to only about 10 per cent.
During the past two years the raids
made on stock selling corporations
through the mails of the United
States has resulted In no less than
1900 individuals having been caught
in the net and indicted. 1t is conser-
vatively estimated that approximate
ly s15o,0o0,000 has been filched from
the American people by these alleged
fraudulent operators.
During this time many large in
stitutions have been put under the
ban, such as the United Wireless,
American Redemption Co., and the
American Telegraph & Typewriter Co.
The operations of these concerns al
though large, are not to be compared
with the Sterling Debenture CO.
Hundreds of investors In Boston ana
New England are victims OF the sterl-
ing Dehenture swindle. which has been
exposed by the postal authorities in
connection with the arrest of Frank
| E. Winchell of North Brookfield and
seven others in various parts OF the
country. who are said to have taken
in at least s3S.0Oo,0 900. during the past
six years in the course Of their OPP
erations.
Winchell was formerly president Of
the oxford Linen Mills of North
Brookfield, which was one of num-
Der of corporations for which the
Sterling Debenture Co. sold stock
Some of these transactions are said
to have Melted the debenture company
SO per cent. of the amount for which
the stock sold. Other transactions
which were with legitimate concerns
only Melted 0 per cent.
The government contends that for
the most part the profits of the COM
pany were not derived from the 10
per cent. legitimate corporations, but
from those which paid SO and over.
and were mere stock-selling organiza-
lions, the nature of which the debsn-
ture company was well aware. A num-
Der of the latter have already been
exposed and prosecuted by the postal
authorities.
Postofiice Inspector Charles b. Jen-
nings, who is handling the case In
Boston, stated. yesterday, that. 80 far
as the Oxford linen mills are con-
cerned, the government believes that
it has a perfect case OF fraud against
the various defendants and win base
its prosecution largely on the linen
mill transactions.
The linen which the company was
supposed TO make in a day by q Sc
cret process, which Benjamin C.
Nudge, graduate OF tina Massachu-
sets Institute Of Technology ana the
present head of the company, had dis
covered, was not made as represented,
according to Inspector Jennings
The splendid property and impos-
ing mills which the company sowna ut
North Brookfield were described and
pictured in the literature sent out, in
which the profits of this quick method
OF making linen We're declared to be
vastly greater than those accruing
under the old and slower process, in
Continued on Page Twelve.)