New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1915-05-08
Two Men Accused of Oh,
tanning Rich Returns by
Mail SWindle.
SOLD $4,000 AUTOS
WITHOUT MAKING ONE
Accepted $50 Payments, II Is
Alleged, and Got Money
for Agencies.

William J. A. Bailey, president and
treasurer of the American Hardware
and Machinery Export Corporation.
and Chauncey Holt, jr., secretary Of
the Chauncey Holt Company, printers,
at 227 West Seventeenth Street. we're
arraigned yesterday before United
States Commissioner Houghton charged
with using the mails for fraudulent
purposes. They are said TO have de-
! frauded persons acquiring territorial
agencies in the United States and for
eign countries for the sale of an auto
mobile called the Carnegie. Two men,
| arrested yesterday in Kalamazoo,
| Mich, are also said to be involved in
! the conspiracy.
/ Bailey conducts the suspected bust
/ ness in the Whitehall Building as the
sl,000,000 Carnegie Engineering Cor
/ poration, in the same Office with the
American Hardware and Machinery
1 Export Corporation, which is not in
volved. According to the complaint
sworn to by Postoffice Inspector Hugh
/ McQuillsn. the conspiracy was con-
ceived on July q, 1914, and victimized
the Hudson Phillips Motor Car Com
pany, or 81. LOUIS.
Edwin NJ. Stanton, Assistant United
States District Attorney, said yester-
day that he had half a dozen COM
plants of mail swindling against
/ Bailey and his associates. Among those
defrauded, Mr.. Stanton said, was the
postmaster of Lanceford, y. OAK, who
gave 81 ,250 for territorial rights TO sell
the Carnegie machine.
Tbns Gtaptop addaI a
single Carnegie automobile has been
built although il was represented that
deliveries would begin in September.
To persons in the South and West,
and in South America, South Africa
and Australia, it was represented that
the Carnegie company was known
throughout the world for its soundness,
and that in addition to the Carnegie
automobile il manufactured the Car
negie tractor, sharper and planer. in
dustrial locomotive, steel well drilling
machine and wire rope, and that all
these were made according to order at
an outside factory. The Carnegie Cor
poration, according to Mr.. Stanton, had
no plant of ITS own TO manufacture
any kind of machinery, despite the ex-
travagant statements il issued through
the mails.
The plan Of the Bailey clique. he
said. was to have different parts of the
Carnegie machine made TO order and
assembled in a factory at Kalamazoo,
in which the company had acquired
property. The agents we're supposed to
make one contract year for each 5000
population in their territory.
According to the police, more than
$4,000 cars were ordered, the dealer
paying a deposit of $50 on each car.
The price Of the car was $685.. In CIR
cular letters were the words, THE name
of Carnegie is known the world over.
II is said that Bailey made advances TO
the Russian government at Petrograd
for the sale of automobiles suitable for
use in the war.
Detectives who called at the Carnegie
Steel Company yesterday were told
that there was no connection between
the steel company and the Carnegie
automobile concern. The name OF Bal
lev, they were informed, was unknown
IN the ONCE.
McQuillan, who left last week to in
vcstigate the Kalamazoo factory, wired
Yesterday that no work was being done
on the machine in the city and that he
had made two arrests of men thought
t. be implicated in the conspiracy.
Bailey and Holt said last night that
they would have the automobiles ready
or time if the police gave them a
chance. Without knowing of the in
vestgation that had been made by Nc
QuilIan. they insisted that the work
was being done in Kalamazoo.
At the suggestion of Mr.. Stanton the
examination was set for Friday. Bal
ley's bail was fixed at $4,000 and Hollis
at $500. The National Surety Com
nany furnished bonds.