Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1922-07-13
SEEKS RETURN OF
MILLIONS GIVEN BY
IGNORANT DUPES

$14,000.000 alleged to have been
paid by more than~ $4,000 persons
for stock in the +. V. G. enc COM
pany, the Commercial Finance Cor
poration, the Mutual Finance Cor
poration and the Peoples Trust
was asked in a bill. in equity filed in
supreme court today by counsel FOX
the Boston legal aid society.
The bill. which joined as defend
ants the directors and trustees OF
the companies both as officers and
individuals, aSkCN distribution of all
the available assets of the companies
and appointmel receivers for
them. Supreme Court Justice Gen
ney granted a petition for an injunc-
ton restraining all the defendants
from disposing of their property
pending a hearing or the bill.
The plaintiffs, il separate mo-
ton, also re. uested a special precept
Of attachment to the mount OF
$15.000,000 against defendants and
defendant companies. All the banks
in Boston were named as trustees in
order that the individuals bank &C
count might be reached. Writs were
also sought attaching the real estate
OF various defendc It's.
The bill charged that certain de-
PENDANTS entered into a gigantic
scheme and conspiracy whereby they
planned to obtain from large num-
bers of poor and ignorant persons
grossly eXhorbita~t promotion fees,
profits and commissions.
The cardinal principle of the con-
spiracy," it alleged, was to play up
on the imaginable NOT the p~ospec-
tive investor with the so-called idea
of financial democracy that is, to
represent to him that the banks were
not paying a fair return to the man
of small means. ,lereas the COM
panies in question were so organized
that the investor would receive the
full earning power of his money. and
that small investor. by combining in
the purchase of the Greene securi-
ties and thus financing a large COM
pany would obtain profits from the
large money making possibilities
hitherto open only to the rich and
to the great bankers.
LAS result Of the aforesaid plans
the conspirators have obtained from
upwards Of $4,000 persons approx
mately the sum of $14,00O.000. OF
said sum approximately $5,500,0OO
was retained by the defendant con-
spirators as illegal fraudulent and
secret profits and gains, in addition
to stock and shares in the said pro-
or over $13,000.0Cr.'
The rest of the $14,000,000 the
plaintiff said. sis now controlled and
used by said conspirators for their
own benefit and unjust en- ,hment
through the fraudulent, unlawful
and illegal voting trust agreements
and other devices created as a part
of the scheme.
The court granted four temporary
injunctions returnable next Z iesday
morning. Under the terms of these
the defendant corporations and trust
their officers and trustees are enjoin-
ed severally from destroying OF
concealing the corporate and trust
records belonging to any Of the said
organizations" and from using, sell
ing or in any way disposing of any Of
the assets, voting any of the stock OF
shares of said organizations, or at
tempting to collect any balances due
on stock contracts" The corpora
tions are enjoined from paying out
any dividends until further order OF
the court and from transferring any
stock or shares in the interim.
Decision on the precept of attach.
ment went over until tomorrow.