Evening star., 1923-07-31
Boob" Statesmen Employed
By Promoters of S,Ui,,dles
Dealers Blocked From Mails Served BY
MisIed Z" "Recruits" Developments
FolIo,v Vigorous Federal Crusade.

latter were he to believe that the
stock which he sought to sell to his
relatives and friends was worthless
or was nearly SO. But he had him I
self been very thoroughly sold" by
any number of clever methods which
the sales organization was using to
impress these recruits with the idea
that the securities In question mad
remarkable value and enormous
possibilities
This enthusiasm often reached
frenzied point, SO clever were the
promoters In driving home the idea
of enormous value for the securities.
The relatives and friends of the re-
crult, particularly IL they themselves
were not versed in the subject of
discerning securities values-as. of
course, most people are not-were In J.
their turn carried away by the en-
, thusiasm of the recruit and the
stories he told them. and trusting him
because of their acquaintance with
him, and anxious to help him out in
his new job. bought what he had TO
SELL
Many of the recruits. after selling
to their relatives and friends. were
;; unable. because of the lack of real
sales ability, to get any further in
their endeavors. The sales organiza-
tion. realizing that that was to be the
case with most of the recruits. just
kept on adding new recruits TO the
Fist.
Their advertisements in the help
wanted" columns of the papers in the
big cities became classics of come
on literature and often one OF the
| largest items in the overhead of the
organizations, some of the advertise
ments running a column in length
size of advertisement such as the
help wanted" columns seldom, If
ever, known.
1.4OO "BOObs" Working.
One New York sales organization,
which in the course OF few years
unloaded several millions of dollars
of worthless securities on relatives
and friends of recruits before going
into bankruptcy with most of the
companies whose securities it sold,
had more than 1.400 boob statesmen"
operating out from its office at one
time.
Paradoxical enough. this style of
promotion had it's heyday during the
period of business depression which
followed the war, one OF the most
severe business depressions that the
this was that because of the bust
ness depression there were more men
out of work at that time than had
been the case in years. and. conse-
ber of men reading the help want
ed columns and eager to try their
luck at almost any kind of job
The adaptation of this system to the
selling of fraudulent securities pro-
yided an opportunity for some of the
biggest swindles that had ever been
accomplished in the sale. of stocks
by personal solicitation. Stocks of
nebulous chain store companies were
a favorite form of promotion. There
We're also extensive promotions of
shares of automobile accessories COM
panies. automobile companies, mo-
tion picture companies and various
other concerns.
shops. these swindles went on unin-
terrupted for years, until they finally
collapsed from internal troubles-the
main trouble was that the list of
new sucker statesmen" began TO
reach an exhaustion point as more
and more people got an idea of
the real nature of the swindle and
talked about it, ra-ambitfous
overhead that was finally developd
by the sales organizations. also served
to finish the organizations. The fact
that the most companies promoted by
the organizations went to smash did
the rest.
Il. o. Department Handicapped.
The post office authorities. who had
been the main agencies in proceeding
against such swindles when the latter
were practiced through the mails,
were powerless to act against the sale
of fraudulent securities when effected
! in this particular form.
The promoters had not only devised
! a system by which they did not use
the mails in soliciting business, but
many of them had the system SO
worked out that there was virtually
no literature on their stock offerings
other than what was comprised in
/ the kit carried by the statesmen. This
would include attractive pictures re-
| lated to the promotion and figures of
enormous profits that had been made
| i'm meritorious issues of an industry
| salesman was generally instructed