The Washington times., 1929-05-20
INVESTORS
ARE GIVEN
WARNING

Dark dealings in real estate
securities in Washington were
charged on the floor Of the
Senate today by Senator
Smith W. Brookhart of Iowa,
author of the resolution to
investigate local realty finance
corporations.
Brookhart charged that stock pro-
motsrs IN the laultal are ctterinS %
buy from ort-of.town investors bonds
Of the r. H. Smith Company, fright.
ening the bond holders by the
specter Of a congressional investiga.
ton into the business Of that organ"
ization.
Brookhart named two companies
and identified their heads. He mem
toned the Smith company IN, his
speech on the resolution several days
ago when he alleged that grave
charges had been made against that
company.
Warns Investors
In his. speech today Brookhart de-
clared q warning il necessary "to
the people Of this country who have
purchased first mortgage securities
not to permit strangers to frighten
them and to be sure that before
they sacrifice their present holdings
or trade for some other security
they investigate first"
1T is unfortunate that this On.
deayor to get the proper facts rela'
tive to certain financing In the Dis.
trict Of Columbia" Brookhart said,
'is being used by questionable and
improper men posing as security
stances, further victimize the un.
fortunate investor.
Letter Is Cited
"a letter has been received In
Washington from doctor In Chi
cago reading: This morning I re.
ceived a telephone call, alleged to
be long distance from Washington,
advising that the r. H. Smith Com
pany is about to be indicted by the
Senate Of the United States for
pyramiding loans, and requesting
that / forward to the informant i'm
mediately all Of tbs bonds issued by
the F. H. Smith Company which I
hold in order to get as much out
of them as possible before the said
investigation DEVELOPS"
The company mentioned is a
device of a man who has been uu.
der indictment. Brookhart said.
Almost Immediately after the
breaking of this publicity on the
F. H. Smith Company, another
company in Washington sent out
special delivery circulars.
FeIon Heads Company
'@This company Is headed by a
notorious peddler of blue sky secur-
tiles and a former inmate OF the
Elmira, N. T., Penitentiary because
of fraud activities in New York.
Brookhart introduced. in connec-
ton with this speech. q copy Of
one Of the alleged circulars Of the
latter company.
The circular reads: "Importan:
We are in position to make you
a very attractive trade on your r
H. Smith stocks or bonds. The sc.
curity we offer pays per cent and
has a ready market. Phone. write
or cali"
Old Switching Game
In concluding his address today.
Brookhart said that 'the old game
of switching the investor from one
security to. an inferior one Is well
known, and it not the purpose Of
this congressional inquiry to add
fodder to such scheners."
Persons who hold Smith bonds
or other securities now being eati.
cized," Brookhart continued, Should
certainly not be frightened into
taking the advice of questionable
persons who have selfish purposes.
but should make a sound investiSa-
ton of their holdings. This mzy be
accomplished through their banks,
through reputable investment bank
ers or through the Better BUSINESS
Bureau"