The sun., 1919-05-24
OIL FAKERS RAKING
IN LIBERTY BONDS
Statesmen Of Shady Stocks
working" Lists of Pa
triotic Buyers.
HOW THEY GET VICTIMS
Experience Of Bronx Grocery
Clerk Typical-Prosecu-
~ tors Helpless.

tors Helpless.
The telephone beIl rang in a Bronx
grocery store and pleasant voice asked
for one of the store clerks by name.
The clerk responded.
Il have never had the pleasure of
meeting you. Mr.. Blank" said the voice,
but have been recommended to yeu by
a mutual friend" He then named a
man well known to the clerk and made
agreeable conversation over the wire,
eventually confding that he had Just
entered the employ of a downtown brok-
eraBe house and was trying to make q
hit with his firm and at the same time
do a good turn for his friends and his
friends friends by obtaining their val
ued patronage.
At the moment he merely wanted to
begin an acquaintance, which he hoped
would prove profitable to both. He had
nothing TO offer. at present, except an
oil stock that was paying IL per cent
dividends and In a fair way to pay
more in few months but as much
bigger money was to be made by in
siders in the oil boom he would expect
to report something better very soon.
Tho clerk tried to say he was not in
terested In oil stocks, but the stran-
ger babe him an affable goodby and
hung UP, leaving the clerk, who had
never bought an industrial security in
his life. considerably mystifed and with
rather a fiattered feeling as well.
He Calls Up Again.
Three days later the stock salesman
called up again. He had something In
mind too important to discuss over the
telephone and would be pleased to see
the clerk at the latter's home. The clerk,
reluctant and yet curious. made an APP
pointment. The salesman's personality
proved to be as pleasing as his voice had
sounded 1t developed that he had got
into the good graces of several big men
in the oil industry and had discovered
that the IL per cent. stock of which he
had spoken the other day was really q
much better proposition than he had sup
posed. So he was concentrating all his
energy thereon.
The grocer's clerk was impressed by
his line of talk and by the stories OF pool
men who had gone into oil with a shoe
string and come out rich But he wss
obliged to confess that on his small
salary he hadn't saved a cent OF cash
with such an opportunity staring him in
the face Wasn't there some way-had
he no Liberty Bonds? The clerk said he
was buying two nifty dollar ones on the
instalment plan. and had two Govern
ment books showing he had thus far
paid SIS.
WELL" said the salesman. ''ths com
pany is selling this stock in nothing less
than 100 share lots at 81 par value q
share, though it is bound to go much
higher as soon as II is traded in on the
curb. can't let 100 shares go for less
than 800, but as you are friend OF
So and So (naming the man mentioned
| in the first telephone conversation) anC
he has done mo many a good turn
guess I can afford to make up the diff
ference myself"
Paints Glowing Picture.
The oil certificate was delivered ant
the clerk gave the salesman. Endorsed e
the latter, the two Liberty bond books
| The clerk then settled down TO reading
| the lovely folders issued by the com
! pany that was putting out the oil stock
| 1t seemed that the company was drilling
very close to a gusher that had put on,
| OF the Western States on the oil map
| that IL already had several wells IL
| operation and that while for the presen
| 1t was counting on paying a dividend o.
only IL per cent. the shareholders coulC
! reasonably expect 100 per cent in tn,
near future.
After the dividend date, as no checl
| had been received. the clerk went t
| an Office right in Wall street, New York
which was the headquarters of the pro
moters handling the oil company's stock
| There Il was regretfully explained I,
| him that expenses in drilling the we'll
that were finally to bring the compan,
to full prosperity had proved 20 unex
pectedly heavy that the company wa
obliged for the present to forego al
dividends.
/ It was also pointed out 70 the clerl
that the company's literature" did no
definitely promise IL per cent. /; II onl.
said that such a minimum return wa
| to be expected. Suspecting by this tim
that his only souvenir of the episod
| was a worthless stock certificate 70
which he had exchanged his entire saw
ings OF SS8 the clerk nevertheless causes
an investigation TO be made by a Gov
eminent agency
1t developed that the company had n
oil production or prospects to speak OF
that the only dividend 1t had ever pal
and that several officers of the com
pany had unsavory records. But as 4
its literature and letters 1t had no
actually promised anything. had onl
succeeded in making an unsophisticate
man think 1t was promising something
the District Attorneys office felt tina
prosecution would be hopelesa TIL
grocer's clerk made affidavit that tn
salesman had actually assured him tn
company was paying IL per cent, Blu
as he had no witnesses and nothing 1
writing there really was no case. s
presumably the company is still activ
and the promoters statesmen are sti
swapping their pretty pictures for Lib
erty Bonds.
The story is told at this length be
cause 1t is typical OF what is going o
all over the country in the way c
swindles being perpetSAted on Libert
bond holders by dealers In so-called In
vestment securities. The Government
through the Federal Trade Commission
recently and earlier through the Capits
Securities Committee and other agen
cies, has been trying by publicity an
by pressure on corporations and thei
agents TO discourage all this
Takers Rake the Country.
They have succeeded SO far as re
spectacle companies are concerned. bu
the trouble Is that many of the stoc
promoting oil companies whose agent
are now fitting hither and thither lik