The New York herald., 1922-02-19
PUBLIC BAMBOOZLED OUT
OF MILLIONS EVERY YEAR

words. it may discourage sales instead
OF stimulating them.
In the case of the motor company
the effect was to sell more stock
The excuse given for raising the price
was that more money was needed to
build and operate a larger plant.
Boosted to - n Share.
Tie plan of advertising an advance
in the price of the motor company
stock was resorted to several times.
The price finally was boosted to 81 a
share. At this time, Investigations
later disclosed, the company had about
one dollars worth of equipment and
assets for each five shares of stock
outstanding.
In the prospectus issued by TIE COR
poration during its stock selling cam
paign was a section describing the
engine to be built in the automobile
which the company would sell. Here
is the section:
This new and wonderful little en-
gine has the o. X. of the best en-
gineers and mechanics in the country.
1T costs SIS to $40 to build. weighs
so TO 100 pounds: superheated steam
or gasoline model develops 81 to 80
horsepower. cylinder gas model,
power unlimited.
Can increase power without in
creasing fuel consumption. Most
wonderful, economical engine ever in
vented"
This engine was the work of local
inventor who later sued the company
t. obtain payment. Testimony showed
that at the time the company was
promoted the engine never had been
built into an automobile. Neverthe-
less. the corporation advertised that
1t was prepared to turn out passenger
cars and tractors at prices ranging
from 5000 to 800.
When stock sales began to lag the
company acquired very large tracts Of
land and built plants. But when the
time came for production everything
seemed to result in failure. The cor
poration soon was bankrupt.
Hole Yields 100000.
At Spokane, Wash, 100000 in
stock in an oil concern was sold by
man who discovered. he said. seep-
age of oil in his cellar. Hundreds
Of persons flocked to see the hole. The
proprietor of the house took them into
the cellar and dipped up a fluid from
the hole. samples Of which he gave
to some visitors. The man said he
discovered the oil seepage quite by
accident. He organized company
and set up an oil drilling derrick in
one corner of the lot.
Spokane went oil mad. Fifteen oil
companies were organized. Drilling
began N-every other lot, it seemed.
Stock was offered on every hand.
Meanwhile visitors fiocked to view the
little hole in the cellar bottom where
an oil spring was supposed to exist.
One morning, however, a neighbor
saw the proprietor of the oil spring
house abroad at the early hour Of five.
In each hand the proprietor was carry
ing a great bucket. The buckets con-
tained fluid that looked like the fluid
that could be dipped out of the spring
in the cellar. The neighbor concluded
tiidI liiC Oil SPlinS was a diiu
that the spring was simply a hole
which the owner of the house "salted"
with oil.
The fluid which the owner had
dipped out of the so-called oil spring
was analyZed. The analysis showed a
combination of crude oil and vegetable
oil. No such combination ever was
found in nature, and the whole affair
was branded as a fraud.
The stock continued to sell, how
ever. Then came the postal inspectors
and examined the selling methods
which included the use of circulars
cent through the mails. The report
containing the last chapter of the
story has not yet reached the files of
the Post Office Department at Wash
ington.
Motion Picture Promotion.
A high official of a great nationally
L., Ill