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there isn't any more, not since Dolley got common thieves—but I am thoroughly on the job as bank commissioner.
satisfied that they have been robbed of Mr. Dolley is a banker himself. Born from $1,000,000 to $3,000,000 a year. In in Boston in 1861, he has that natural fact, I am inclined to believe that it far New England aversion to seeing money exceeds that amount. I find that there is wasted. Much of his early life was spent an army of agents representing these at sea with his father, an old-time skip- concerns working all over the state. per. Tiring of the sea he got as far “They especially prey upon widows away from it as possible by going
and the beneficiaries of insurance to Kansas. From a clerk in a
policies, calling upon the benecountry store he advanced
ficiaries shortly after the to proprietorship and then
funeral and offering to into banking and still is
sell them stock which interested in several
they assure them will financial institutions.
pay enormous profits, Incidentally he has
in many cases prommanaged several
ising to pay as political campaigns
much as forty or in Kansas, so that
fifty per cent a he is used to hard
year. Ninety-eight knocks, and whatever
per cent of the the stock swindlers say
money so invested by about him will not hurt
the Kansas investor him as much as it might
is absolutely lost." hurt somebody else. As
Here is a case in a matter of fact, it
point : doesn't hurt him at all.
In a certain He rather enjoys it,
town out in Kanbecause he always has
sas, a woman the last laugh. That JOSEPH N, DOLLEY, STATE BANK COMMISSIONER
nearing middle age bends over a
washtub six days and dishonest investment schemes as well. sas as “The Blue Sky
in the week in a Law.” To describe it
little shack at the in a nutshell, the “blue sky” law con- edge of town rubbing herself into a prefers on the bank commissioner almost mature grave to provide a living for herautocratic powers in saying whether any self and three children. Just a little stock company may offer its stock or more than a year ago the husband-a bonds for sale in Kansas.
railroad shopman-died, leaving her a While Mr. Dolley actively was in the pretty little cottage half-paid for, $2,000 banking business, several instances came in insurance and a little ready money to his notice where trusting widows had which paid the funeral expenses and left been beggared by putting all their money a few dollars over. She was just the into fake investment schemes. After he ordinary type of a woman, a good mother became bank commissioner he heard of and a good housekeeper, who grew up in many others. He began a systematic inves- a country town with little opportunity to tigation and he found that the people of learn much about business affairs. Kansas were being swindled through the One morning, a week or so after the purchase of immense quantities of stocks husband's death, the clerk of. his lodge and bonds in unreliable and unproductive went to her home and paid over to her concerns and corporations.
a check for $2,000. Meantime, she had "It is impossible,” Mr. Dolley said in sought advice from the secretary of the a report to the legislature, "for me to building and loan association which held advise you accurately as to the probable the mortgage on her house. He advised extent the people were and are being her to pay off the loan and invest the swindled each year by these fakers—and remainder in stock in the association I wish to say, in the great majority, which, he said, would pay her at least
SHELTON C. BURR
Fuller Building. New York City. Dear Sir:-Please rerd me free and without any obligation on my part the BOOKLET, "Yours For More Money."
Tompkins of the Pan-American Plantations Company. By a happy chance he had belonged to the same order as her husband and hearing of her bereavement had called to offer condolences. He had known him slightlyfrom what he had hastily conned from the newspaper notice of his death—and he was a fine fellow and all that. In fact he had shown some interest in the PanAmerican Plantations Company. Sorry he had died because he probably would have invested in what would have been an immensely profitable venture. And so on for a half hour or so until Mr. Tompkins casually mentioned that it was unfortunate smaltinvestments at home brought such small returns. Now, for instance, he was not exactly a rich man but he was putting every cent he could make into Pan-American Plantations stock and counting upon being a millionaire shortly.
All of which was calculated to – and did – impress the widow, ignorant of such things and oh, so eager to keep up a
good home for her fatherless A SAMPLE OF THE LITERATURE BY WHICH AMERICAN INVESTORS little ones! She listened, fascin
ated, to the glowing description
of the almost unbelievably rich five and probably six per cent on the properties of the Pan-American Plantainvestment.
tions Company, her eyes bulging as the "It isn't much,” he said, “but it will be suave Mr. Tompkins discussed probable absolutely safe. Perhaps I can find some fifty per cent dividends in the near thing later that will be just as safe and future. Why that, she saw, would be bring you a better return."
enough to pay off the mortgage and keep That very afternoon the widow had the family, too. She could stay at home planned to go to the secretary's office, and care for her children and never need pay off the loan and invest her money. to worry about the future! Then, as the secretary told her, she Yes, indeed, that was the very thing would have her house rent free, an in- Mr. Tompkins was leading up to; with come of $5 a month and probably she the result that Mr. Tompkins carried could find something to do that would away with him a very common looking bring in enough more money to keep her check that was worth $2,000 at any bank and the children comfortable. She had in the country and left behind him a sent the children back to school for the beautifully lithographed certificate for afternoon and was getting ready to go 2,000 shares of Pan-American Plantadown town when there was a knock at tions stock that wasn't worth what it cost the door.
to have it printed. An accommodating The caller was a well-dressed stranger. bank cashed Mr. Tompkin's check and an He introduced himself as Richard J. accommodating railroad carried him out
are for her she could eage and kebe
of town half an hour later. He hasn't dollars in fake investment companies. been back since, and doubtless never That is a conservative estimate. Bankers, will be.
postoffice inspectors, legitimate investThat is just one instance of the down ment brokers and Federal district attorright thievery that has been, and still is, neys to whom I have talked say the practiced in this country in the sale of figures for the last ten years will run stocks for investment. It is a somewhat nearer three billion dollars. And mind aggravated—but not exaggerated—case, you, this vast sum, somewhere between but there are thousands and thousands of one and three billion dollars came, in the others, differing only in detail, scattered majority of cases, from persons who up and down the United States, and could not afford to lose it. I place the thousands of Mr.
estimate low, beTompkinses busily
cause I have exengaged putting
cluded from it the more trusting
"sucker s." A widows into the
"sucker” properly hand laundry busi
is one who knows ness. So long as the
very well that you law maintains a
can't get something passive attitude to
for nothing and yet ward the Mr.
w'ho risks his Tompkinses and
money in the fond their business, so
hope that he is long as the "blue
going to beat the sky". lasts—and the
other fellow's supply is illimitable
game. It never has -Mr. Tompkins
been done and will be right on the
never will be not job.
in the fake investNow, perhaps,
ment game. you will say you
The people who sympathize with
worthless securities course, it was her VERY DUBIOUS STOCK SELLING SCHEMES
were not "suckers.”
UNDER ARREST. own fault. She had
They just didn't good advice and
know. They are didn't act upon it. What can you do honest and unsophisticated, knowing little about it?
of business affairs—especially. so the Why stop it, of course! If you advise women—and ready, as they were with your neighbor to insure his house and he their equally honest neighbors, to take neglects to do so, and it catches fire, do each man at his word. When the wellyou stand by and watch it burn? Cer- dressed, ready-speaking stranger came tainly not! You call out the fire depart among them and painted glowing picment. That's what Kansas did. It called tures of the easy road to affluence out the fire department. When it saw its through investment of their savings, they people being robbed right and left it took him at his face value—and bought called out the fire department, figur- at enormous cost the bitter experience of atively speaking. That is what every being swindled. other state will, or ought, to do. Funny For the "suckers” there needn't be any how simple are the solutions of these sympathy. The ones who should have intricate problems. Just stop it. That's that, and the ones who need protection, all. Put a penalty on such outrageous are those who have lost and those who thievery and stop it.
will lose through ignorance. Of course, If you will sit down with the figures, no one should be ignorant, but since it is you will find with little difficulty that in "a condition and not a theory which conthe last ten years the people of this coun- fronts us,” we will have to put aside try have been swindled out of one billion academic propositions and consider prac
tical things. When men and women money invested. But what's the use of have toiled for months and years to lay throwing good money after bad? Beup a few dollars against a rainy day, both sides, the stock swindler seldom leaves the state and the nation should see to it his victim enough money to hire a that, beyond question, they have a safe lawyer. He believes in getting it all while place to put these savings.
the getting is good. Bad as it was, the Louisiana Lottery Suing is too much like locking the never took from any state one-fiftieth of stable door after the horse is stolen. The the money that has been taken by ped- thing to do is to lock the stable door dlers of worthless stocks and it actually first and then stand guard with a shotdid distribute a large share of what it gun, in other words to put the swindlers took in. One may even say in compari- out of business and to keep such a close son a good word for the loan shark, too, watch on the other investment companies
that there wouldn't be any chance for them to do any swindling. That was Mr. Dolley's plan. There was no warrant in law for what he purposed to do, but Mr. Dolley has a sort of Rooseveltian knack of
THE LITTLE CORNER OF MR. DOLLEY'S OFFICE HAS
even if he does exact his pound of flesh. finding ways to do things that the law Yet the nation, the state and the Church does not specifically provide for. So, rose as one to drive the lottery out of some two years ago, he established a business, upon the loan shark society bureau in his department for the purpose wages a relentless war. The policy gam- of advising the people of Kansas, without bler is hounded through the slums and any charge to them, as to the value of the alleys and some people would like to stocks, bonds and other forms of securbrand the food adulterator as a criminal. ities offered to them for investment. But the king of all the swindlers, the Wide publicity was given the innovation man who sells worthless stocks, occupies and almost at once there was a noticeable the finest suite in the most expensive shrinkage in the number of swindling skyscraper and goes about his business schemes being operated in the state. with the sufferance, if not by the protec- Cautious investors welcomed the new tion of, the law.
bureau and made frequent use of it, but In every other state except Kansas, the the persons who most needed protection, only recourse of the victim is to hire a as usually is the case, were not reached lawyer and sue for the return of the at all. The only way to protect them was
to strike at the root of the evil by driving not unless the agent is willing to risk a the swindlers out of the state. Thus was fine of anywhere from one hundred dolborn the “Blue Sky” law.
lars to five thousand dollars or ninety While he was drafting that law, Mr. days in jail or both. Furthermore any Dolley did a good job of it. In the statute person who makes a false statement in book it covers seven pages of closely set filing an application for a certificate to do type and the bristles stick out of it like business subjects himself to a fine of quills on a porcupine's back. And it has from two hundred dollars to ten thouteeth, too, fore and aft, for the legislature sand dollars and not less than a year nor in passing it, to make sure of the job, more than ten years in the state peniadded a clause which provided that, if tentiary. And to make it just a little the supreme court should declare any one stronger, if any company authorized to of its provisions unconstitutional, all the do business in the state conducts its busiothers should remain on the statute book ness in an unauthorized manner or bein full force and effect.
comes insolvent, the bank commissioner In brief, the law, which is entitled “An may immediately throw it into the hands Act to Provide for the Regulation and of a receiver and wind up its affairs. Supervision of Investment Companies;” It might be added, by the way, that requires every corporation or association, Kansas has learned so many things about foreign or domestic, which purposes to wild-cat stock selling from Mr. Dolley sell stock in Kansas, to file with the bank that the judges are just in the right mood commissioner a clear and complete state- to impose the maximum fine and imment of its affairs down to the minutest prisonment on any agent or any company details; it must file its written and irre- that violates the law. So far, none has vocable consent to accept service upon it dared attempt to violate the law. through the secretary of state of Kansas, When the law first went into effect and pay the expenses of a minute investi- there was a great clearing out of many gation into its affairs by an agent of the of the worst of the fakes which, underbank commissioner. It must agree that standing the “Kansas language". when no amendment to its charter shall become they read it in the law, saw the uselessoperative until the amendment is ap- ness of staying in Kansas any longer. proved by the bank commissioner; it They moved off to greener fields. Others must file copies of its contracts and each with that unlimited self-assurance, castof its agents in Kansas must be regis- iron nerve and total lack of conscience tered in the bank commissioner's office. which goes with their calling, promptly The law provides methods of bookkeep- filed their applications and were as ing and each company must agree to promptly turned down. Some quit on open its books at any time to any stock that, but there were a few who still were holder. If, upon investigation, the bank not convinced that the law meant just as commissioner finds the concern is solvent, it read and that Commissioner Dolley fairly conducted, and, in his judgment, meant just exactly what he said. They promises a fair return on the securities protested. Some were grieved at the offered for sale, the commissioner may error which the commissioner had comissue a certificate permitting the company mitted in refusing the application ; others to do business. The certificate, however, were insulted. recites in bold-face type that “the bank For these Mr. Dolley had a set forcommissioner in no wise recommends the mula. “Go out,” he would say, "and securities to be offered for sale.” : bring me one person who ever bought
If the commissioner isn't satisfied with stock in your company, or who ever the company's showing he can refuse the bought stock in any company from you, application. Since the law went into effect who ever received as much as five per last March more than seven hundred cent in return from any or all of them applications have been filed under it and and I'll pay you two dollars for each and at the time this is written exactly forty- every one." eight of them were approved and given They expected to make a bluff and the certificates. Not one of the others dares bluff was called. Up to the time this was sell a share of stock in the state, that is written Mr. Dolley hadn't paid out a cent