The New York herald. [volume] (New York, N.Y.) 1920-1924, 1922-09-27
CRACER, NC.,R AIDED
TO RESCUE MILLIONS
System Charged With Get
ting Investors to Buy Into
Shaky Concerns.
'RELOADING' ALLEGED
Head of Concern, Arrested
Here, Is Under Indict-
ment in Altoona Also.
WARRANTS OUT FOR Is
Z. S. Agents Say Glass Casket
Corporation Was Mis-
represented.
WARRANTS OUT FOR Is

S3,VUO,OOO mas been loSt Dy investors,
was brought to light yesterday when
post Office inspectors raided the spa
cious Offices of the Crager System, Inc.
at 40 West Forty-second street, on a
charge of using the mails to defraud.
Benjamin Crager. president If he
concern. living at TO Riverside Drive !;
his father, Henry Crager. v.ce-rresi-
dent of the company, and Joseph T..
arrested and released later in $4,000
bail each when arraigned before Sam
uel NJ Hitchcock, United States Com
missioner. Warrants for thirteen other
men have been issued charging the
same offense.
The arrests were made by Thomas
Fitch and Nathan Noile, Post Office In
spectors, after two months investga-
ton.
The specific charge is in the sale of
sl.000.o00 worth of reloading stock OF
the Glass Casket Corporation of Altoona,
Pa, to stockholders of record in that
corporation. The complaint was made
BY c. NJ. Daniels of "a Main street. Bos-
well. Pa. to whom II is charged circulars
making false representations were~sent.
According to Inspector Fitch and
Peter j. Mccoy. Assistant United States
Attorney. statesmen represented to stock
holders of the casket company that ma
tional and State legislation was under
consideration whereby 1t would be
t>l@ q Ia.
acted--for person to be buried in any
thing but glass coffin. This. they
said. would reap millions of dollars to
the stockholders.
Benjamin Crager is under indictment
in Altoona charged with conspiracy to
cheat, false pretenses, embeZzlement and
larceny Of securities. He was arrested
here recently at the request OF the Penn
sylvania authorities and Is out on
$4,000 bail pending an appeal in ex-
tradition proceedings.
The Crager System, Inc. was incorpo-
rated in New York on January 10 last
with an authorized capital Of $4,000.
all common stock of 500 par value. Mr..
Mccoy says the concern under a diff
ferent name has been operating for two
years in Chicago and other cities
Concern Has Large Growth.
The Crager System began here with
small force of clerks and statesmen. but
according to MIR. Mccoy it had until
yesterday fifty to seventy-five clerks
and occupied the third and fifth floors
OF the building. Approximately as many
high powered" statesmen are employed
who work on a liberal salary and per-
centage basis, said Mr.. Mccoy.
These statesmen, in person or over the
telephone, invariably convince stock
holders that companies near failure can
be made paying and going concerns by
coming into the fold of reloading
financial enterprises
The reloading stock selling scheme
was exposed few weeks ago by THE
NEW York HERALD. It generally in
wolves the selection Of a company In
depleted financial condition and having
unsold treasury stock.
According 10 the complaint the Crager
System purchased such stock upon the
most favorable terms at a low figure,
and with the purchase was turned over
the llst ~ shareholders under an agree
ment TO Giace = representative In the
office Of the c~tnpany during the period
necessary 20 complete sts financial re-
habilifation.
The Government charges that the de-
remnants FeQuUfu NNdtf ~ signed con-
tract that the officers OF the Glass Casket
Corporation and those Of other corpora
tons whose unsold treasury stock had
been secured In the same way to CO.
operate In selling the treasury stock at
higher figures.
Having obtained a list of the stock
holders, according TO the Post Office in
spectors the selling organization through
the use Of the mails and its statesmen
approached them by means of state
ments. innuendoes and differences. Great
ing In their minds the belief that the
company was approaching prosperity.
The shareholders seeing big profits In
sight refused to sell their original stock.
and. II is charged, by trickery and false
representation purchased more stock
from the reloading company at inflated
prices. In many instances, according to
Mr. Mccoy, stockholders were unable to
nay In full for the stocks and put up
Liberty bonds and other securities as
part payment
Lcaguc Issues Statement.
The Better Business Bureau OF New
York, with headquarters at 81 Broad
way. that for the last six months has
been investigating the activities OF the
Crager system. Inc, issued this state
INVENT last tN1IlliFS
"rhe corporations which employ re-
loading houses are generally SO dcs'er-
ately in need Of money that they either
acquIesce IN the plan Of the stock sales
concern or else they do not inquire too
closely into their practices. The victims
Of reloading statesmen are largely
women. old men and wage carriers who
have saved w little money for a rainy
day.
"As a rule the net price which the cor
poraton Is to receive from the reloading
house for the sale of It's treasury stock
is "a good deal higher than the market
price Of It's stock But there being nc
way Of preventing the reloading house
from buying old stock In the open mar
kct and selling II TO old stockholders
this is frequently done. The corporation
c,.nnt does not benefit in any way by
such transaction. but the reloading house
does as It can buy the old stock cheaper
than Il can buy new treasury stock from
the corporation. At the same time the
sales organization can resell this ole
stock at tile saEae price az new treasury
stock"
Thomas McGrath. former Assistant
District Attorney OF New York county
counsel for the defendants. said that his
ELECTS we're doing a legitimate business
arl' Laa t.nt tsnn3 "a. x,.n M - AafVu "A