The Appeal. [volume] (Saint Paul, Minn. ;) 1889-19??, 1923-11-03
UNCLE SAM WARS
ON OIL FAKERS
Federal Trade Commission Is
Trying to Guard Nations Saw
ings From Sharpers.
Have you ever been nieked by
some oil faker? What do you
think of the governments ef-
forts to protect the savings Of
yourself and your neighbour

/ Inink OF tnS governments . SI.
forts to protect the savings Of !
; yourself and your neighbour |;
WashingtOn.-The federal trade COM
mission is engaged in a war upon the
Wallingfords Of the world. More than
1900 Investigations Of oil schemes have
been made and each day adds it's quota.
The schemers comprise all types and
the victims are found all over the
country.
Yet, although publicity is the only
weapon at the command of the commits
sion, the campaign has been successful
in large measure. The commission can
not send any man to Jail. 1t cannot
even assess fine. Its authority rests
on the construction of slender clause
in the law giving it the nominal power
to prevent unfair competition. 1t pro-
ceeds on the theory that the man SELL
ing fraudulent stock is competing un-
fairly, and when it finds that an oil
stock promoter is making fraudulent
representations it issues an order
against him to "cease and desist'' from
the practice.
The promoter does not have to obey
the order. No penalty attaches If he
violates it. But in about ninety-nine
cases of every hundred he stops his
operations. In majority of cases the
proceeding never gets to the stage Of
issuing an order. Mere publication Of
notice that an investigation will be
made usually is sufficient to drive a
fraudulent operator out of business. He
may get in again later under another
name or move to greater fields, but
the particular fraud that he has been
perpetrating comes to an end. The final
order, denOuncing an individual or
company as fraud, disposes Of class
inclined to resist, with the exception Of
a few old and hardened offenders.
Is Fragile Sword.
It Is q fragile sword with which the
federal government has gone into bat
tie. Nobody knows better than the
commission that it ought to have q
stronger weapon, but it uses what It
has. "And," said one Of the members,
ut is an illustration of the queer fact
that the weakest things in the world
are sometimes the strongest. Who
knows that we could do better, or even
as well, with a more rigid lawT'
OF the 1000 investigations those
which went to the final stage Of orders
to cease and desist" make only COM
Portable handful of manuscript. Every
proceeding begins with complaint
from some one who thinks he has been
defrauded. The commission makes an
investigation. An inspector may be sent
to the scene of operations. Four Of
them give full time to this work, and
others are switched to it upon occasion.
If the commission has reason to believe
that an unfair method of competition
has been used, it issues complaint
which is Immediately made public.
Most of the proceedings end there. It
is not always possible, however, to con-
front the evildoer with even the suspi-
cion Of his guilt. The deal has been
done and the doer very likely has
passed on to fresher pastures. He usu-
ally is the sort of man who can change
his name upon occasion without doing
violence to his conscience. He may bob
up again in a distant field, to be routed
once more by another, complaint. =
For those who have the courage to
face the matter out, there Is a public
hearing. The man cited has 40 days
in which to answer the complaint. If
he does answer, the case goes to trial.
Witnesses are examined under oath
and the proceeding generally resembles
q trial in court. If, at the end of it,
the commission is still of its original
belief, the order to "cease and desist"
is issued.
The defendant may take an appeal
to the Circuit Court of Appeals Of the
United States. If that court confirms
the decision it becomes final. Most Of
them never appeal.
Try Numerous Schemes.
The kinds of fraud practiced are as
numerous as the individuals engaged,
and these are scattered from the new
est oil field at Smackover, Ark, back
through all the fields of Louisiana.
Texas, Oklahoma and wherever else
the oil craze has gone. Most Of them
are promoters from New York, Chica-
60 and other large cities. They have
some competition from the natives Of
the small towns in which they operate.
Now and then one of these novices de-
velops more alluring line than the
veteran takers. Then there is war. A
stockholders protective league or some
thing Of the kind is organized, not for
the protection Of the stockholders at
all, but to cut the throat Of the rival
promoter.
Every human emotion is played upon
by the promoters, all the way from su-
perstition to reverence. One Of the
recently investigated concerns was put
ting out its advertising over the sigma
ture Of man who bears one Of the
most honored names In America. He
was represented as being In complete
charge Of its affairs. When the inspec-
tor Of the commission interviewed him