SZJ,
KYEKtHG teDaEBPHDBl)PHiA', MONDAY, DECEMBER 3& gS
?.fi.jjjr .A -
i
'3?
IttEOTBS ON tfRAIL
ACCUSED IN
f
T- "J i-. Au
v ,tlW 1ltrnUonl' fleeced httMrrfl of,
f jmk eaxf women, lnoludlnr wrr widow,
fe 4rtWJ With Uwr sating upon vision
pi "ajefc-rich-quIcV dreamt.
ifnty bt Oi rlctlma of the 'International
'XAttabet' nnd Development Company "
wld to hare been roped Into the new
siktrrr, on official Bald, showing "one ft
' , mfcer alway fc wcker,'
THltBH INDICTKD
A alleged swindle tnvotvea Almost
, m ol fcotnpanlee In thla and other cities,
MI organised 1 directed by the earn
Md of alleged Wgh-nnancler. three of
whom already hire been indloled by the
federal Grand Jurar. They 'A1?
IMn cleaned tip more than M0O.0O0, end
Is haw lived in atyta, with automobiles
t other luturiM.
Tho Indicted werejS .
t,A.W8OT lUCHMAN. fl Et Jehnion
ata. NMr n( Af1n fftti.
Osrrniutawni aecordlnair to lnpeelere. art
area-high flnineler u4IlMlini' able lieu-
a&Sffi. KiBaurr. ef mitn. ra,. form"
hr ef . fluelton bank, who Is J4 t ;
old wofiMiss iteck wholesale) sad brosa
csi In the Tldnltr of Mi nome 'town.
"Waminta hare been Issued for nil lhre
COirPXNlBO INVOLVED
The companies Involved are: .
Kw buiiW. j?MJi5d ln "" wllh
wt'Simrssr tf tea.
I TOmmpAM QAfl COUPAMT. of KH
mSSEWM 6'AB COMPANT. of Osstonts.
Pt .. ni.fitfiv mn t.tmiT
fafaMS &I&IWC COM-
PAKT, wUh off lots formerly w we oi
ir."r; :.i Tn.tnr i.vnk-wu.
Mr amIUi. who'nuxdo tha InvMt'iatton and
(ectd the alled nwlndle, the Jnjerna
llonal Ona and Hlictrlo ComPny '
jKjnetpni companr In tho eoheme. IU worth
Sen atoek of 11.800,000 waa d ,roa,I"'
mone more than 600 vlotlmi. Mr. Smith
atd, while tha othini were mere """
1yn companies tieed merely for the pur;
jjone of miking the swindle all tho ea.Hr.'
DMASII XJP IN 1815
Accordlnr to Toetal Inspector Smith, tho
fateSaUonal Oas and Kleotrto Company
and nil It underlylnr companlts. wllh the
exception of the Dank of Independence, hail
the snmo otneta, officers and director!, ana
11 paseed Into thi hands of a recelyer in
Deoember, WIS, In one Itenerat BnMlfup.
leaTlns trail of wrecked fortunes behind
throuahout tho Btote.
Th auaplolon of the rederal authorities
had been aroused for some time previous
to the crash. When that came Inspector
Smith was asslmod to tho case. After a
detailed and lenrthy Investigation .the mat
ter was brouaht to b. head today, Mr. 8mlth
aid l
Most of thoae fleeced were more or
i less poor widows, school teachers and
'any number of elderly men and women
who parted with their life's saylns
v ' to buy worthleos stock.
I It waa ono of tho boldest and most
flagrant schemes of high finance and
' of tho Bit-rlchjulcU variety that I
Jutve aver heard of. It waa tho twin of
the International Lumber awlndlo. and
assumed almost tho proportion of the
' Storey cotton fraud.
Tha aamo methods were used. The
i International Qaa nnd Eloctrlo Ccm
1 sany had palatial offices In the Morris
' Bulfdln;, nnd then In the Stock Ex
' change .Building-. In this city.
All tho "Walllngfords" connected
, with tho schema looked and noted pros.
"' i 'serous. Bachman formerly had a real-
- 4enca at Allen lane that waa a palace
't -almost, and he waa the maater-mlnd
of tho whole scheme.
' I ' Sleeclng; the unwary proved easy.
I It was the same old scheme of paylnc
I dividends from tho principal, which
f seems to work so often, These arch.
' financiers started with cash nmountlng
' to between 185.000 and (40,000, with
' which they paid tho Crst dividends. In
r aolnff this they urged reinvestment, and
" '' ktforo lone their stock waa selling like
hot cakes.
CHEOIC MANIPDLATIONS
f,i further dlvldenda then were paid from
U'tliO principal, Mr. Smith explained. "In any
IT number of cases," ho aald, "the dividend
checks were roturned for reinvestment,
which saved tho company tho trouble even
of maklnr good the checks,
"Ono of the most astounding parts of It
all was tho way checks were 'kited' by tho
International Oaa and Electrld Company,"
lie added. "From my own Investigation I
know- that checks of astounding amounts
wero 'kited' at one time by the company.
This scheme of high finance was made
easier by havlne a broker and a bank con
nected with the company."
The International Oaa nnd Etectrlo Com
Mny waa organised ln 1911 under tho laws
,t Delaware with a capital stock of f 1,600,-
' too.
'rrho first officers of tho company were
J. T. Hayden, of Philadelphia, president;
yr, &, Armstrong, Jr., vice president, and
MIm M. A. McMenamln, secretary nnd
treasurer," .said Mr. Smith.
Postal Insoectora said, however, that the
real promoters of the company were Claw
. son Bachman and Joseph T. JUyden, of
Philadelphia. Postal Inspectors said also
both Hayden and Bachman had been In
trouble with tho State Insurance Depart
' sent whllo promoting an alleged crooked
Mann & Dilks
1102 CHESTNUT ST.
Tyrol Wool
. (In,aJCnittd fabric)
lena Motor Coats
50 18.50 22.50
An to Wight J
&?
"JW l liadU o -weaT - ,
' An J all luo4f of watW.
Bswluilvcly at tKIs etorf.
AWGftlf fwttff Top aaJStreat
OF SCORES HERE,
tflUANTIC SWINDLES
Insurance deal. At that time
offices In the Drexel Ilulldlng.
inr nad
HOW COMPANI OPnnATED
In explaining the working of the com
pany, Mr. Smith raldl
The alleged swindlers made their first
haul after getting a list of the stock
holders of the Ihlematlonal Lumber
and Development Company, which woo
then In litigation before Us Kmnih-up.
Nevertheless, at that time the Inter
national Lumber stock had n certain
market value, Many of the stockhold
ers were Induced to exchange their
lumber stock for worthleis stock In the
new International riks and Kleolrle
Company. After this lumber stock had
passed Into the hands of the alleged
swindlers, they sold It at once nnd
realised from between 131,000 to
140,000 on the deal, In cash.
This cash, Mr, Smith said, gave tho men
the ntart they needed. They at once de
dared dividends on their own stock which
they had sold.
Then, accordlnr to Mr. Rmllh. id. ,.
pany began to branch out In Imitation al
most of the International lumbermen, they
acquired so-called gas plants In every ec
Hon of the country. Among their franchises
werot
Tho Concord da Company, of Concord,
N. C. the Hyrocuiie Suburban tins Com
pany, of ICast Syracuse, N. Y.f the Claiton
County Oas Company, of Clse.on!a, N. C.s
tho Georgetown lUllway nnd Light Com
pny, of Georgetown, fl. C and the South
ern Oaa and Electric Company.
These franchises were all bought by the
alleged swindlers as Individuals, who sold
them to the company.
onoANizrcn hank
"Affairs of the company prospered to
such an extent," Mr. Smith nnld, "(hut they
decided to organise n banking firm. This
was done and the banking firm was known
as Ilachman A Co., which had offices first
In tho Morris Ilulldlng nnd then In tha Block
Kxchange Ilulldlng In this city."
According to Mr. Smith, tho chief mem
bers of tha banking Arm wero Ilachman stid
Hayden.
Tho name of tho banking firm, postal
Inspectors said, was well chosen, since many
of tin Investors mistook It for It. F. Ilach
man A Co., bonkers, of 1M2 Chestnut
street, a firm with which It had absolutely
no connection, of course,
Hoth ths suites of offices occupied by tho
International das and Electrla Company
and Bachman A Co. were palatial. The
desks, rugs, and other olHco paraphernalia
wero of tho finest cradn and most expen
sive. The look of prosperity won their
stock ln trado, Mr. Smith uxblalned.
"In n nutshell." ho eald. "all they ncedcil
Wire the large wicker baskets used by tho
Story cotton swindlers to gather In tho
deluge of money which swamped (heir of
fices every day,"
EAST STOCK SALE
"The company soon foutid Itself the re
cipient of a steady flow' of money," Mr.
Smith explained. "N'owh of how tho com
pany was prospering spread among the
unwary, with the result that demanaa ror
Its stock Increased, Tho prospects outlined
by tha circulars of the International (las
and EIoc.trlo Company wero golden and
many could be found to 'fall.'
"Samuel P. Jarret, n nlnety-three-year-old
rraldont of JefterHonvlllc, Pa., sacrificed
savings he had accumulated during his life
time to buy the 'International' stock.
"Ono woman In Reading was turnod out
of her home after having mortgaged It to
buy moro of the slock. Homes wero mort
gaged right and left to buy this stock.
"Nevertheless, tho arch high financiers
were not lacking In nerve. They ottered In
somo cases to take prospective stock buyers
Bouth to look over tho plants of tho com
pany. In two cases ofllcers of tha 'Inter
national' said the company owned proper
ties on which It only had an option,
"Whott money kept on pouring In tho
company went one etcp farther and had
Its own bank -the Bank of Independence
which went Into tho hands of n receiver
along with tho others In 1916,
'True, that bank paid dollar for dollar;
i
Backed by a great name
Proved'b,y incomporable periormonce
but that was due to the llouldator'a shrewd
business management. lie waa ex-Congressman
3. Washington Logue. It Is quite
posilbte that the officers of the, 'Interna
tional' were willing to pay the bank's cred
itors since ihey must have been living In
fear of prosecution. Mr, Logue evidently
knew how to handle the situation, I think
his action In the matter la deserving of
great credit and praise."
CONTIUCTOrt'B SUSPICIONS
Mr. Smith said that the crash of tho
company csme when It was pressed by
Walter Wetstone, n contractor, who had
erected a gas plant for tho company which
had been paid for In stock. The contractor
wanted his money and was put oft for
some time, Mr, Smith said.
"The suspicion waa nroused," he aald, nnd
the blow-up came. There was no Income
earned by the company out of which It
could pay dividends, so, In tho and. It natu
rally went broke.
i "We do not know how tho schemers got
the list of stockholder of the International
Lumber concern. It Is peoullar, but they
seemed to have fleeced some of the same
crowd as the lumber swindlers did. Ily
telling the lumber stockholders that no
further dividends would bs paid on the
lumber stock, the schemers Induced many
of the lumber stockholdern to 'nwnn' fnr
''International.'
"Ilachman disappeared after tho crash.
Ho gave n brilliant entertainment for his
daughter, n society 'bud,' and then closed
his house at Allen lane Ho returned to
thla city a few weeks ago.
"IN TIIOOIILC BKl'OItE"
"Federal authorities wero on the trail
of the schemers before the crash. Muoh
of their work wss done by usrsonal Inter.
'views, nnd for somo time they were cautious
oi, using me mans, Things ueenmo rather
hot for them In 1012, and they closed their
offices In the Morris Ilulldlng nnd moved
the 'Internatlonsl' headquarters to New
York. Later.they returned and opened n
suite In the Stock Exchange Ilulldlng. The
heyday of the 'International' was from
1912 until Just lieforo the crash of 19 in.
"Ilachman has been In trouble before.
He was a former president of tho Bay
State Mutual Company, an Insurance con
cern, Ho was urrrstnl In 1911 with eev
eral others of the company, accused nf em
bexslemcnt and conspiracy. Only 116,800
wan the sum Involved at that tlmx. He wn
accused of conspiracy to defraud tho Bay
Stato Mutual Company of that amount.'
According to Inspector Smith, tho I.an
rosters, fathor and sons, cleaned up prob
abty 1100,000 from small dealers nnd others
throughout tho city who were ntrxlous to
d litiioio of their properly or small stores.
Ho said:
In several cases persons through
death In tho family or for other rea
sons have been nnxloim to sell and havo
answered the "Lancaster" nds.
Wo have received more than 300
complaints against tho prisoners from
all over the State. Mont, however,
coma front Philadelphia. Tho com
plaints received total more than 126,000
JuniiiiratiiMiiiiiiiiiijniriiiiiiaiiiiiiiiiiiiitiiMuiuiiiiaiiiiiiiiniitiiimiiiiiiiiiiMiiiiiiiiitJiiiiiiiiniicjiiiiinnmtiiiuiiiiiiiiaiiiimiiriitiiiiiiiMimri
NOTICE
Wo can supply Christmas tree lighlinp;
outfits for tho homo thnt has electric
ity or for the house that HAS NONE.
BatterioB will supply tho current. The
lampB, in various colors, aro in forma
of animals, flowers, fruit and Santas.
It will be a delightful surprise to the
kiddies and the grown-ups will enjoy
it, too.
Easy to install. No danger from fire.
The prices are moderate.
WALKER
531 Chestnut St.
mimniutxiimiiniinniiiiiimiiaafl "ri Bit of
and we estimate the amonnt of tho
alleged swindle at $100,000 at least.
Mr. Smith explained that for tho last
five years the I.aneaeters had been adver
tising themselves- as real estate brokers.
Using the various names of "A Ellwood
Lancaster A SOns" and the "Lancaster
Itealty Company." They had oftlces at 2266
nidge avenue until 11, when they moved
to the Land Title Building. The firm Is
now at 400 Chestnut street.
According to postal Inspectors, ths Lan
caster answered ads In the business op
portunity columns of dally newspapers and
would Inform the advertisers that they had
buyera and could sell their property.
Inspectors said a call would then be
msde by one of the Lancaster On the
advertiser, whot would bo asked to pay
a sum of 120, or anything they could
get, to cover the legitimate expenses. Mr.
Smith said that onco thla money was ob
tained, the Lancasters made little or no
effort to dispose of ths property and simply
pocketed the $20. "In n few cases," he
sstd, "when pressed, the l-ancastr would
advertise the property nnd let It drop after
"In any number of cases, after the ad
vertiser would pay the $20 asked, no fur
ther Information would be received from the
lancasters relative to' the property In ques
tion. "The Lancasters made a specialty In an
swering the ads nf persons who wero anx
ious to dispose of small stores, meat mar
kets, restaurants and others.
"We havo positive Information that the
Lancasters guaranteed to bo able to sell
the properties In question nnd said that
Ihey had buyers waiting. These, however,
'never materialized.
Tho Lancasters have been living In
style. They have good homes and motor
cars. Many of their victims wero women
In moderate circumstances,"
There will be probably 300 witnesses to
appear against them at their trial.
Percy If. Klseckcr. Iho commission mer
chant, who trades under tho nnmo nf P. K.
Klseckcr A Co., 107 Vlnn street, waa ar
rested, accused of using the mulls to de
fraud. Tho scheme Mr. Smith nnld. wan
cnrrled mi In nt leoat ten different Htntes.
"lie would iidvlHn fnrrnorn nnd others to
send him their prndurn for sale nnd sell It
to u confederate nt n reduced and nlmost
ridiculous prlcn. ltaturns for this small
nalo prlco would bo sent to thn farmers and
producers. Tho confederate would then sell
tho produce nt tho regular, or high, prlco
and dlvldo wllh Klnvvkar."
According to postal Inspectors, Klsecker
was nrrested onco bcfnro for n similar of
fense. Numberless complaints hnvo beon
received against him, Mr. Smith said.
Christmas Cariis?
butlnr. rretlnin nllh or wllhant enirated
or printed name of neniler, lteniibto prlrea.
LOUIS FINK A SONS
PrinltrMSlatlonurs Engravtri
SO North 7th Ftriwt. (lit Moor) rhlladelphla
i"
& KEPLER
Thins Electric"
-1916
mnintumminnnnraiinintj
mm
9S3S3
'&
?WSSH
lP".
"'X.
CL0110NG WORKERS
ANNOUNCE BIG SIHIKE
60,000 in New York and Vicinity
Plan Wnlkoutj
Tomorrow ''
NEW tonK, Dee, 11. Officials of the
Amalgamated Clothing Workers of America
have announced that a strike , M00
makers of men's and children's clothing In
this city, Newark and nidgewood, N, J
will be called tomorrow or Wednesday. The
committee of eight In charge has decided
on the hour and the day, It wss said, but
theso details have been kept secret
It Is planned to carry the fight to Phila
delphia If manufacturers there attempt to
make clothing for Utw Tork shops afTecled
Union leaders asserted last night that the
contest would Isst not more than two days
for about half of those who o.ult work, or
only long enough to resch an agreement
with the contractors regarding work for
firms not In accord wllh the union. The
workers demand an Increase of $2 n week In
their pay nnd an eight-hour day.
Thlrty-flvo members of the Amalgamated
Clothing Workers of America wero nr
rested today outside tho clothing factory
of the Klrschbsum Company, Uroad street
and Washington avenue, to prevent dis
order which waa threatened when several
hundred men, supplied with pamphlets en
deavored to cause the employes to Join
the union.
Ten of Iho prisoners wero held by Msg
Istrnte Coward, of the Seventh nnd Car
penter streets station, for further hearing
next week. They are accused of breach
of peace nnd Illegally distributing the
pamphtets, which were printed In Kngllsh.
Italian nnd Yiddish. Tho other twenty
five weni dismissed.
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