Wheeling majority. [volume] (Wheeling, W. Va.) 1907-192?, 1913-01-16
How Watering Will
coNTINUED FRo Nj 1sr PAGE.

district. Unable ito swing the~deal
with this small capital they found two
others with more means and the pool
was raised to 10000 With this sum
they were able to put across a deal
buying the corner at SIS per SQUARE
foot-or total of $500, 000-and sell
little profit of $4,000 for few
weeks work The buyer was the
Southern Commercial Congress, sup
posed for many months to be a sort
OF chamber of commerce for Dixie
land, but now shown up to be another
aggregation of promoters out for the
oney In buying this property from
E original option holders, the com
mer a. congress put in only $4,000
cash % Sc are the title
Then t.are was organized the
Southern Building Association which
look the corner from the Commercial
congress, borrowed 100000 and put
up a flreproof office building, known
as the Southern building. The building
was opened in 1911.
But the building. company was ,un-
able. to hold onto 1.-THE building for
want of funds to swing the proposition
and it decided to sell.
Meanwhile three insurance promo
tiers, who had fled from New York
state rather than face an investiga-
ton by the State Insurance Commits
sioner, came to Washington, bought
an old fire insurance company known
as the Commercial, and proceeded to
enlarge it as a money-making propo-
Sitlon according to the best methods
of wildcat promotion. .
II Laws Are Lax.
This they were able to do because
OF the lax regulations in the District
of Columbia, and the sucker-feeding
proving so good, they proceeded to
organize another company of the
same character, known as the first
National, to catch what suckers the
Commercial stock missed. De luxe
promotion literature of the best Roy
croft composition and deckle edge
was put, showing the fabulous profits
to be made by investing in fire insur-
ance stock. In loud type this litera-
ture set forth that the leading fire
insurance companies paid Al per. cent
dividends, being careful however. to
refrain from promising this profit to
prospective investors and thus avoid
ing running foul of 1.-THE post office,
but allowing that impression to sink
into the mind of a careless reader. AS
a matter of fact. legitimate fire insur-
ance in the last ten years has been
losing game. because of the great
San Francisco and Baltimore fires,
but the literature failed to mention
this trivial fact.
hoi H.
gan gathering in suckers by the thou
sand. In short time they had sold
two million dollars in stock-all by
mail
Nevertheless, because of extrava-
ganee in management, the companies
began to lose money As starter the
three promoters took $4,000 as their
commission. But while this SIS, 900
was dead loss to the companies new
ertheless they declared a IL per cent
dividend to keep up the price of
stock. The dividends were paid out
of the moneys received from the stock
sales.
Fake Real. Estate Increase.
The companies, however, needing
a method for covering up this loss,
and the Southern Company also need
ing financial assistance, met almost
proVldentially and at once saw that
they could be mutually profitable to
each other So the insurance COM
panies. using stock as a great part of
the purchase price, bought the equity
in the building, which went into the
sale at valuation of $3.50, 900. This
was on October 20 last. Two days la
ter the insurance companies listed this
building in their assets at a valua-
ton of 100000 and, although they
actually owned but an equity in the
property, they listed the entire \sum
of $45O,000 which they had added to
the purchase price, as an actual in
crease in their assets due to the in
crease in value of the real estate
owned by them! This paper profit the
two companies divided fifty-fifty, each
adding 100000 to its book assets,
thereby.
The transactions assume import
ance because prominent men loaned
their names to the companies. On the
promotion literature of the First Ma
tional appears the names of Justice
G. w. Atkinson of the U. S. Court of
Claims; Justice Ashley M Gould of
the Supreme Court of THE District of
Columbia; Robert N. HARPER, bank
president and the first man convicted
under the pure food law; E. E. Jordan
banker; Henry C. Shober a promi--
nent official in the Interior Depart
ment;; Robert J. Wynne, former
Postmaster-General.
Jordan, in December, was strong
candidate for the Wilson inaugural
Craftsmanship. To injure him, mem
Der of the opposing school of sharks
the real estate ring Of Washington,
complained about the insurance trans
actions. Jordan was not nominated.