The Celina Democrat. (Celina, O. [Ohio]) 1895-1921, 1917-01-26
GOV. COX
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(Contlnued from First Page)
tician having been enlisted in the
cOmpany's case. These reports were
particularly insistent at the time sug-
gestion was made that a federal grand
jury was about to consider criminal
prosecutions.
Mr.. Turner's revelations concern
ing the frenzied financial methods of
the concern astounded the state. 1t
was fear OF these disclosures which
had prompted the company in 1915
to seek an injunction against their
being made public. Successful be-
fore Judge Safer of the federal dis
trict court, sitting here, the company
also obtained an injunction from a
special federal court sitting at Gin
comprising Judges Safer,
Hollister and Warrington, gu, a sum-
mary of findings made by two estab-
lished firms of public accountants,
which investigated the Geiger-Jones
and affiliated companies, became pub
lie property when Mr.. Turner filed
his answer in the case brought by the
G.-J. concern to head off threatened
revocation of its license.
The disclosures also embraced a
letter by a state banking department
examiner, who said that H. NJ. Geiger
was going mad" with pyramiding
and reorganizing schemes.
Local Company in List
Among the concerns whose stock
was marketed by the Geiger-Jones
Company was the Ralston Steel Car
Company of Columbus, which has
since passed its common dividend.
It's an old scheme-the payment
Of fictitious dividends-but, accord
ing to Mr. Turner's allegations, the
CD. Company developed it to point
Of fine intricacy unheard of before.
Dividends were paid on stock of one
after it had actually failed
in business. In this case, they were
not paid to all stockholders, but to a
certain number, presumably to those
with means to purchase other securi-
ties the g. ]. Company was market
ing. To pay dividends on the stock
Of several companies, the Troy Wagon
Works, the Massillon Rolling Mills,
The Gramm Motor Co. and Charles
S. Harrison Company and others, the
CD. Company advanced money. Of
course these were not earned divi-
lends.
The G. j. Company also perfected a
novel scheme to boost it's own assets.
It carried as an asset stock of mag
lzine company it promoted of the
face value Of '$1,250,O00, although
he stock was worthless. 1t also car
'ied as assets 100000 advanced to
other companies to pay dividends to
heir stockholders; some 100000 |
alleged to be owing to it from other
the books of which didn't
show any such Indebtedness. In all |
according to Mr.. Turner about ST.
500, 900 of the alleged investments of
he G.-J. Company were practically
worthless. They were securities of |
promoted by the parent |
some of which were con-
;tantly losing money and yet the
stocks were carried as assets.
Whipsaw Guarantees
Investigating this plan of financ- |
ng, Mr.. Turner found a curious con- |
lition confronting the man who
Fought stock in one or more of the |
promoted companies and also in the |
i.-J Company itself. Presumably,
le bought stock in the flotations be-
ause of the impression given out |
hat the G-J Company was guaran-
eeing an income on the stock. When
le bought stock in the G.-J. Com
Dany, he, in effect, was putting up
money to pay himself dividends, u.s.
ng his own money to provide a guar
ntee for himself,
He was whipsawed right.
In his answer filed in court Mr..
'urner exhaustively discussed the
concern and its prac-
ices. He charged them with repeat
d Misrepresentation, violations of
aw and Justification, making mis-
eading guarantees, giving fictitious
cures to hide their bookkeeping
chemes the padding of patent and
ther accounts, the payment not only
( unearned dividends but their pay
nent in the face of actual deficits,
he diversion of capital from one
iEiger- Jones e. 2. q. 2
to another and numerous
ther reprehensible practices
Yesterdays decision upheld the
lue-sky laws of Ohio, Michigan and
outh Dakota There are somewhat