The Birmingham age-herald., 1923-10-04


 MT. Oates report shows that in Birmingham alone there are 500 stockholders of tho company, some of whom invested as much as $50,OOO and that fully 17.ooo shares of the stock was sold in Alabama, much of 1t at par and some at as high as $150 a share.
 Organized In 1920. ...
 According to the report the Wal ker Consolidated was Incorporated In Dallas March 6, 1920. The tRficers and directors included Judge A. w. Walker, presidnet; Harold Walker, his son, vice president; D. S. Menasco, his brother-inlaw, Hedmon Hopson of Birmingham; T. H. Aldrich, Jr.. of Birmingham. and Charles R. Reed of Birmingham. It Was represented to the Alabama securities commission that of the total of s10.oO0, 900 au- thorized s5,461,OO had been paid in. among those Birmingham men given and the amounts paid In being the following: Hudmon Hopson, s125,000; G. w. Hopson, S15o,00o; c. w. co. F.) Willen, s15O,OOO; E; A. Garter. MT. Oates claims this money was never paid In and that some of the Birmingham men did not even know that their names were being thus used. The list, however, was certi- fled by officers of the company.
 Judge A. w. Walker was pres ident of both the Walker ConsCli- dated and of the Texhoma Oil and Refining company and MT. Oates claims that Judge Walker received $245.000 for selling one company to the other and that other large sums were made by officers and fiscal agents in commissions on sales of the stock. MT. Oates also feels that Ala bama stockholders have a claim upon the assets of the Tuxhoma company, from which they may ultimately get back the money they have invested.
 It is claimed that the company 8 claims all the way through were untrue and cites dividend of S160,000 paid Walker Petroleum stockholders, which was done by making a draft on the Texhoma com pany. The first permit to sell stock in Alabama was Issued April 12, 1920. and MT. Oates claims that the company had an actual deficit at the end of 1920 of s1,SSS,693.
 He gives figures tC show that the two Walkers. Menasco and Hudmon Hopson received as fiscal agents, commissions on stock sales which to- tailed $692,00O. The company's affairs were very complicated and the fact that more than year was spent In investigation of the case shows the immense amount of work that was done. Other syndicates were CIT ganlzed In connection with the com pany, one of them being In Birming- ham and called the Two States syn dicate. The report contains page after page of data and figures, all of which went to the grand jury for its consideration.
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 Brilliant Legal Mooyc.
 One of the first problems that con fronted the investigators was how to get the Texas and Indiana officers finder the Jurisdiction of the Ala bama courts. It was finally decided to present to the federal court some points involving fraudulent use of the mails. This was done and in- dictments have been returned. When the federal courts bring the out-of- state men into Alabama to answer that charge, the Alabama officers will be in position to hold them to answer the moro numerous state charges.
 Preston Officers Case.
 Captain. Oates, under President A G. Patterson of the securities com mission. worked up the case against
 
 corporation which was submitted to the grand jury. This report showed that the officers of the company were R. A. Skinner, president; James T. Driver, vice president; Preston Orr, secretary and treasurer. The company was incorporated March g. 1919, with S10,000,000 of common and preferred stock authorized. Appiica- tion for permit to sell the stock in Alabama was made July 19, 1923. and granted October 27 of the same year Application was also made for per mission to sell S100,000 worth of $ per cent bonds on April 25, 1922. Per mission was denied, but it is claimed that the bonds were disposed of any how. In the sale of the stock 1t was represented that commissions as high as 20 per cent would have to be paid to salesmen.
 It is claimed that the company rep resented that it was manufacturing automobiles and that it's business to grow; that as a matter of fact it never manufactured cars but assembled, and the record of production shows the progress that was made. This shows: 1919. 20 cars; 1920, 103 cars; 1921, 232 cars 1922, 95 cars; 1923, not known.
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 ''Neyer On Paying Basis."
 Mr. Oates contends that the com pany was never in it's history on a paying basis and that representations made to the securities commission and to stockholders to the contrary were fraudulent. He cites as an ex. ample of the company's methods the deal whereby the Fidelity Securities corporation of Jacksonville, Fla, un- dertook to dispose of block of the stock. He also cites the trade deai made with 35 Alabama merchants who were to give Premocars to theii customers, paying the company foi them by note. The notes were ther discounted in bank and ultimately though only seven cars out of the 8; were ever delivered. He cites an other instance where officers of the company gave Priddy Williams com. pany of Memphis $300.000 worth ot bonds to secure a loan of $S2,500, ot which only $55.000 reached the com. pany. The Maybury Banking com. pany of Selma, Ala, was also pledged $300,000 worth of bonds to secure g loan of $5o.0o0.
 MT. Oates asked the indictment or the ground that it made false repre- sentations both to the securities ant to it's stockholders, and that illega and fraudulent acts were commits eo in the management of the company affairs. It was on March IT, 1923 that the company's affairs got into such condition that petition in bank ruptcy was granted some of the creditors and John s. Coxe was made receiver. The company had thhet plants in Birmingham, the chief ol