Shepherdstown register. [volume] (Shepherdstown, Va. [W. Va.]) 1849-1955, 1912-05-16
Another Fraud Exposed.

The Potomac Refining Company. a
concern which has been pecking around
an old abandoned limestone quarry on
the Maryland side OF the Potomac river
between Shepherdstown and Harper's
Ferry, has been proclaimed fraud and
its officers last week were indicted in
the United States Court in Baltimore for
improper use of the mails. Those in
dicted were Michael P. Kehoe, president !;
Dr. Harry c. Hess, treasurer; Louis F.
Plack, vice-president; Charles B. Sanger,
secretary and sales manager; Edward K.
Cooper, general manager; Robert w.
Mobray, general counsel; A. B. Young,
stock salesman-all of whom were ar
rested and held to bail, except Young,
who is said to be in Europe. The prop
erty involved, some 200 acres, cost few
years ago $4,000.
Probably nothing more rosy in the way
OF an investment was ever held out as a
bait to gullible public. The promoters
of the company got out the most beautiful
literature, and their circulars were mar
vels of fine printing and artistic descrip
ton. They showed-on paper-deposits
of millions OF tons of manganese, lime
stone, marble, iron ore, ochre, fireclay,
tripoli, hematite, dolomite and other val
liable minerals, which Mother Nature had
apparently put in one conveniently ar
ranged mountain to await discovery by
the Potomac Refining Company. They
presented figures showing that they had
in sight minerals to the value of SOB, 1885,
600, on which the profits were estimated
at S5, GAL 500. "Sixty dollars second"
was the net revenue they were digging
out of that once-despiSed hillside.
The scheme, OF course, was to sell stock
to confding investors. Alluring circulars
were sent all over the United States, and
900 per cent profit was promised. The
promoters, it is alleged, actually sold
stocks and bonds to TIE amount OF $780,
600, and were hoping for rich haul by
getting rid OF total OF 81 500, 600 in stock.
The attention of the postal authorities
was directed to the operations Of the
company by tempting advertisements in
the magazines and by some OF the litera-
ture forwarded to the department by Off
Gals OF the ShepherdStown poStoffice,
through which it passed. Investigation
showed that it was very suspicious con-
Germ. The Register had been requested
to publish. as a local newspaper, lauda-
tory articles concerning the company, but
we didn't have sufficient faith in it to do
so. One incident that was fiShy was the
borrowing" OF number of workmeD
from the limestone quarrieS at Bakerton
to help make agood picture. For the past
year or two a small number of Workmen
were employed at the Refining Company'S
"mineS," and they dug from the hillside
a lot of rock and laid a few rods OF rails
for trucks and dinky engine. In one
OF the circulars sent out was picture OF
the worknen at the plant. They showed
up in imposing members, but close in
spection showed considerable proper
ton of the Bakerton hands, who had
been induced TO pose in the photograph.
Two experts from the Geological Sur
vey were sent by the government short
time ago to inspect the property and re-
port as to the value Of the minerals. They
reported that the manganese in sight was
worth about 81 500. The company'S cir
culars put it at $25,OOO,OOO!