The Appeal. [volume] (Saint Paul, Minn. ;) 1889-19??, 1923-10-13
just for coming down every day and
signing nv name to few UarserS"

signing my name to few papers,.
Numerous as the fraudulent schemes
are, the commission believes that most
Of them depend for their success on the
operation Of the Texas common law
trust. In many advertisements the Of
ficer appears as John Smith, Trustee"
rarely "William Brown, President" IN
der this system the trustee Is monarch
of his company. He makes the bylaws.
And stockholders do not vote.
Three persons-in the case Of the
fraudulent concerns, usually man and
his wife and one other persOn-go to
the Office Of the county clerk and file
declaration of trust" That consti-
tutes the underlying document" for
all subsequent transactions. The share
holder may think he has all the stipula-
tons printed on his certificate, but
when the test comes he finds that he
must go to "the underlying document"
and this probably is in Corsicana
county, Texas, while the shareholder Is
in Maine or Oregon.
Trustee 10 Whole Works.
After the declaration Of trust Is filed
almost anything appears to be possible.
''The trustee" said a member Of the
commission, may issue 100000 Of
stock, put 81 in the treasury and the
rest In his pocket. He may sell to his
new company the assets, including the
sucker list Of any defunct company
he may have been connected with. He
may transfer funds from one company
to another. He may. pay for practically
all of the stock with an acre Of land
100 miles from an oil field. It Is his
stock and, when he sells it, the money
is his. He never expects to strike oil
but If, by some luck chance, he does
strike it, he usually can keep the oil.
I'm this fraudulent kind of company
the trustee makes sure that he is taken
care of out of the sale Of the stock, and
Is not dependent at all upon the finding
Of oil. He usually holds some leases
somewhere. He values them high and
turns them into the company for stock.
He sells the stock and gets the money.
He may donate little to the company
for the sake Of appearances as long as
the suckers are at the n;bbling stage.
When they swallow the hook, the COM
pany for which he Is trustee Is taken
off his list Of charities. In short, the
trustee is an absolute dictator"
About the first thing that a fraud-fos-
tering trustee seeks to acquire is list
Of prospects. Practically every man
and every woman in the United States
who has shown a disposition to follow
the lure Of seductive advertisements Is
on one or more sucker lists" A par
ticular company or particular pro-
moter frequently buys names from
other companies and other promoters.
It also happens, when q company goes
out of business, that its only salable
asset is this list.
In the oil fields there are number
of newspapers devoted to the oil in
terests. A lot Of honest oil men ad-
vertise in them, but so do lot Of the
other kind. They are filed with
streamers such as these, only the
names are different:
"April 10Th Dividend Day-Lucky
Landlord Pays OF Again."
1.-TWO More Shark Gushers Crash
-Four Giant Wells in Ten Days"
1.-THE Viking Flood of Gusher Gold
Has Turned to a Tidal Wave and
Those Who Share 1t Must Act Now"
again I Pay-My Next Pay Off
May Be 1000 Per Cent"
midway Between the Two Mightiest
Gushers on Earth" (But it does not
say how far "between.")
Another Screaming, Howling, Roar
ing, Liquid Mass of Golden Fortunes
for All Who Join Now"
"Walker Won't Wait-rve Set
Time Limit for Gushers."
zone Hundred Per Cent Cash Is My
First Dividend Announcement and You
Can Get 1t If You Act at once"
How the Plan Works.
There, in that last line, is the key
note. Most oil men, even the honest
ones, act on a hurry-up schedule. The
honest ones, however, usually are in no
great hurry about dividends and the
fraudulent ones are. The schemes for
making an appearance of paying divi-
dends are as numerous as those for
getting names on the list. Frequently
dividends are paid to few stockhold-
ers only, those who live in the neigh
borhood where a stock salesman is op-
Grating. Sometimes, when a dividend
appears absolutely necessary, part Of
the money received from stock sales
is diverted to the dividend fund and
paid out where it will do the most
good.
The man who sees the jubilant ad
vertisements and hears that his neigh
Dor has received a fat dividend also is
helped in various other ways to make
up his mind. Probably he receives
letter from some apparently disinter-
ested person-who, however, has been
seen by the promoter-advising him to
buy stock. He even may be led to be-
lieve that the government has under
written the stock.
Probably he receives the report Of
a famous geologist," containing as
surance that Oil will be struck in great
quantities. One Of these biologists,
the commission found, has spent all of
his active life behind BARRIERS chair.
On the other hand, everything that is
said for a property may be absolutely
true, and yet the company represent
ing itself as the owner may own no
more than a 1 per cent interest. If