Evening star., 1933-04-30
BY CHARLES FOLTZ, JR.

4 \ shackle shanty. Otherwise
Charles place bore nc
mark to distinguish it from the thou
sands of frankfurter stands that bead
the Nations highways from the Jersey
shore to the Golden Gate. Thousands
sped down the White Horse Pike toward
Atlantic City who never noticed it. But
the few who did stop found the shanty
miniStered to by a man called Charlie
shifty-eyed individual who presided
over chaos of sticky chocolates, greasy
frankfurters and Indifferent soft drinks
One of these who stopped was a New
York judge of the United States Dis
trict Court. His car broke down In
front of Charles Place. The court
bought pack of cigarettes and recog-
nized the proprietor as bankruptcy
racketter for whom he had once pre-
scribed vacation of year and a day
a few days later TIE judge returned tc
New York and spoke to Federal prose
cutor. who spoke to Department OF
Justice agent, who spoke to Charlie
And so the story came out.
Charles Place proved to be quite an
establishment. On bond paper letter
heads it boasted a high sounding and
deceptive title resembling General
Foods Production, Inc and was the
home address of long string of promi-
nent names which were listed impos-
ingly down the side of the paper. The
shackle frankfurter stand had piled up
bills for S128,500 for goods sold on
credit and delivered.
Charlie" Frightened Away.
For few weeks the credito1S afraid
of losing what they thought was good
account, merely wrote polite letters. FL
nally one of them sent representative
to the home of the reputed General
Foods Production, Inc but when he
reached Charles Place there was a
sign ON the door-"Out to Lunch"
Charlie had been frightened away by
the interest of the Government agent.
The representative waited. He waited
for three days, during which time he
discovered that nobody in the neigh
borhood knew anything about Charlie
except that trucks always were deliver
ing things and that other trucks always
were taking things away from his place.
Finally the representative went back
home. Creditors threw the frankfurter
stand into bankruptcy, Squab billed over
the few hundred dollars worth Of as
sets and charged off about $4,000 to
bad debts. Indirectly the public paid
for Charles Place.
1t was typical enterprise of the pro-
fessional bankruptcy racketeer and his
bad-busineSS associates, whose dlngy
radio shops in cheap neighborhoodS
bear names strangely similar to those
of nationally known manufacturers;
whose f1y-by might clothing concerns
blossom forth with financial statements
that might make Fifth avenue tailors
blush with envy. whose ~eredit ratings
are not listed in the financial direc-
tories. but whose firm names SO much
resemble those of sounder firms that
are so listed that this sometimes doesn't
matter
They are strange company of GRIM
finals to whom red ink means profit
and days of depression are prosperous
days. Their job is to make big bank
ruptcies out of little ones: to make
liabilities grow where there were assets
before: to see to it that there is moth
ing worth mentioning left when cred
itors become suspicious. and, inciden-
tally, to remember not to conduct busi-
Eess too long at the same stand.
Cover Wide Range.
Bankruptcy racketeers range from
the amateur, who conducts reputa-
BILE business, but conceals his assets
when it collapSes, to the highly organ
lied rings, which do highly proflta-
BILE business in going out Of business.
Since the beginning of the economic
depression these latter have been ex-
periencing a real boom. How much is
lost in the Nation each year by cred
itors of such commercial racketeers 1t
is impossible to estimate accurately.
Some idea of the hugeness of the sum,
however. may be gained from the fol-
lowing fact: Since 1929. according to
the estimates of Government attorneys
occneiatiNnc Nou Vnrk hIIci.
ness houses have paid tribute Of from
$4,000. 900 to S10000.000 each year to
the professional bankruptcy racketeers
alone.
When these bankruptcy racketeers
buy control of faltering business they
find it much more convenient to let
the firm continue under the same name
than to change it. and much wiser to
forget to inform prospective creditors
and credit magazines that the firm
"ain't what it used to be-" Often cred
itors do not become aware of the fact
that there has been a change in the
makeup of the firm until they appear
in bankruptcy court.
Through various underworld chan
nels a Manhattan paWnshop operated
by a member of the Police Depart
ment's undercover squad came to be
known as a good fence where high
prices were paid for certain goods With
no questions asked. To this shop came
a man not long ago with lot of 60
cameras to sell. He sold them, but
members of the undercover squad
trailed him back to the office of an
apparently reputable wholesale house.
The police called in Federal agents to
find out why reputable firms should
sell to fences.
The Federal men found out. Months
previously, the former owners of the
business. then on the verge of bank
ruptcv. had sold out to ring OF rack
eteers. me old name. even the names
of former officers. were retained on let
terheadS. and the firms credit remained
sound-on paper, But goods dehvere9
at the wholesale house were intercepted
by pirate" delivery trucks which
whisked them off to one of the many
warehouses that skirt the banks of the
Hudson along the lower tip Of Man.
haitian. Creditors began to ask en-
barrassing questions. SO the ring started
the "sprint'-an orgy of credit buying
the success of which depended on the
rapidity with which the goods could
be obtained from factories and Jobbers
without too many questions being
asked about credit.
Sprint" Before Bust
There comes time in the affairs of
all racketeers when speed is essential.
and it is during that period that many
of them fall afoul of the law. The
.sprint," for bankruptcy racketeers. US
ually lasts from one to three weeks. de-
pending on the size OF their business
and the vigor Of their creditors During
thst time they sell merchandise far be-
low cost to raise as much cash as pos
sible before the "bust-and when the
bust comes they are nowhere to be
found.
In quiet old Pennsylvania Dutch
town a country storekeeper was engaged
RECENTLY in trying to balance his credit
sheets with his bills when an old cow
bell tinkled over his door. Two dapper
~ Loolr of hic store and there sat