Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1912-11-19
Going After Alleged
Postal Law ViOlatOrs.

| New York, Nov. 1S.-The Federal
government called for trial in the
| United States district court here, to-
day, what it considers one of its most
important cases growing out of al
lleeed misuse of the mails. 1t involves
+, the integrity of the so-called HaW-
thorne group of mining stocks, and
brings to the bar as defendants men
of national reputation. They are five
in number: Julian Hawthorne, son of
the novelist. Nathaniel Hawthorne;
Joseph Quincy, former mayor of Bos-
ton and assistant secretary of state
in the Cleveland administration; Al
bert Freeman, a promoter; Dr. VIII
liam J. Norton, nerve specialist, ana
John McKinnon, secretary treasurer
of the Hawthorne Cos.
All are engaged, directly or indi-
rectly, in the sale of stock in the HaW-
thorne Silver & Iron Mines Co, and
allied concerns, and were indicted in
New York, last January, for alleged
use of the mails to defraud investors.
The government contends that at
least $4,000, 900 accrued from the sale
Of securities; that sales were eHecteu
through Misrepresentation OF the
character of the properties ana tha'
promises no dividends
have been paid.
The defendants maintain that they
have been the victims of a ruthless
crusade on the part of the post office
Before the case was call
ed, today, a statement was issued IN
their behalf in part as follows:
The defendants contend that the pfi-
mary cause of the suspension OF OPP
erations at their mines is the action
of the pest Office department instituted
two and half years ago, and vigor-
ously prosecuted. except at Intervals,
eyer since, in eireularizing stoekhold-
ers and destroying their confidence IN
the enterprises and their management
thus compelling the directors to sus-
perd operations until the government
case could be disposed of.
II is also contended by the defence
that the properties of the hawthorne
companies particularly the large num-
Der of mining claims upon which sill
yer or silver bearing ores have been
found are even, today, of great value
and that IL the directors are enabled
to operate them the stockholders Will
he fully satisfied with results and that
tbe iron deposits of the Hawthorne
silver & Iron Co constitute an asset,
which, if properly developed ana
worked, would not only insure the
from loss, but would be
a source of dividends
The defendants contend that the
Hawthorne mining enterprises We're
undertaken in good faith and were
based upon geological and mineral
coalitions, which gave sufflclent
grounds for expecting the success OF
mining operations, and that the stock
of the mining companies was offered
to the public with notice of its specu-
latiye character and of the risks of
mining prospects.
ct is claimed by the defence that
the government is trying by TINS pros
ecution to hold the officers of the Haw-
thorne Cos responsible for mining
failures. where disappointments have
been met with and to deprive them of
the credit of success where this has
resulted"
: More specifically, the action OF me
government is based upon the alleged
MISREPRESENTATION dHu ldies sepNN
ments contained in tile literature sent
through the mails concerning mines
of the Continental Syndicate located
ncal. the Cobalt district in Canada
: These mines were described as the
Tenagimi cobalt Mines, Ltd; the Elk
La e Cobalt Mines; the Montreal Co
bait Mines: the Hawthorne Silver Il
Iron Mines and the Julian Hawthorne
co. The government alleges that these
mines gro outside Of the silver pro-
ducing belt at Cobalt. and that this
fact was suppressed in the circulars
and letters sent out, Julian HaW
thorne. it is alleged, was selected for
his ability 10 write glowing deserip-
tioas and lecause his name on the
prospectus and together with that OF
Josiah Quincy would inspire confidence
among investors.
The case was called, this afternoon,
before Judge Houeh in the criminal
bench oil the United states district
court and was continued untl Thurs
day next