The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1921-02-23
Get-Rich-Q Quick Bubbles That Have Burst
BY HARLEY MATTHEWS
SHARE DISTRIBUTION FRAUDS
\RLEY Matthew

the mine for 100000.
With the next British Columbian
mine it purchased, the company had
no better luck. In a short time the
shares of this had fallen from $25 to
SO.
Australian stocks on their hands.
There were the Victorian Gold Els
tates, the Caledonian Cooper & Nickel
corporation, and many others. But
their state did not disconcert Mr..
| Wright at all. He Immediately had
the Standard Exploration company
flOated to act as q nurse to them.
Mr.. Whitaker Wright had now been
pros ering in London financial circles
for three years. Yet, though all his
! company's dealings were of highly
speculative nature, no one else seemed
to realize it. Brokers dealt in the
stock of the London Finance corpora
! ton readily. and the shareholders
would have been highly indignant had
| it been suggested that all they had
their money invested in was a mining
venture or two. Mr.. Wright had
proved his theory, but it was pity he
could not have gone further with it
and made a gamble not gamble. For
, soon, before anyone knew the reason,
10000 shareholders in his various COM
panies found themselves without divi-
dends or capital. Where had it all
gone? A meeting was called where
| Mr.. Wright was all confidence. The
London and Finance can be put on it's
legs again for another $1,000,000,' he
declared. Such was his standing, that
NIT
signed an agreement not to press their
claims Immediately. One director said
he hoped that the advice Of the chair
would be taken, and most of the share
holders were confident that all could
soon remedied.
! But the money had vanished. Most
of the securities held were mining
stocks, or options on mining territory
which might be worthless. The meth
cd of finance was simple, though it
took expert accountants months to
trace where the money had gone. Mr..
| Wright's various companies bought
one another's stock and distributed 1t
amongst themselves. When one of
them wanted to pay dividend it
merely borrowed from one of the
others. The London & Globe as it paid
the highest dividends. did most of the
borrowing. Out of the British Amer
leans $7,500,0O0 capital, the London
& Globe borrowed $5,000,000. The
shareholders of the former all the
time believing that the money was be-
ing spent in legitimate mining.
But actual mining was thing that
few of the mining companies. large or
small, did They were only brought
into existence to give the larger cor
porations reason for living.
Questions were asked in the British
parliament whether the law permitted
such trafficking, and could not Mr.
Whitaker Wright be proceeded
against? The socilitor-general re
piled that there had been no indicta
BILE offense against the law committed
and nothing further could be done
though he promised to consider the
drafting of a law to prevent It's repeti
ton in future.
/ Altogether it was found that Mr.
Wright had wasted $25,O00,000 OF other
peoples money, and all the subscrib
ers of that amount had to show, were
certificates for shares in companies
with some fine-sounding names. Only
then did they realize that they had
broken their one financial rule-nev
err to embark in venture that savoret
of a gamble.
>! Copyright 1920 by The Mcclure
Newspaper Syndicate)