A BOMBSHELL IN THE ENEMY'S CAMP
As soon as the Scheftels corporation was able to obtain a copy of the corroborative report of Dr. Walter Harvey Weed, which the great copper geologist made to the C. L. Constant Company, it filed a libel suit against the Engineering & Mining Journal for $750,000 damages. Simultaneously Mr. Scheftels filed another suit for an additional $100,000 in his own behalf.
The filing of the Scheftels libel suits against the Engineering & Mining Journal was a bombshell. It was formal notice to the forces arrayed against us that we did not propose to be made victims of an unholy hostility and that we were determined to proceed along old lines and not abate in the slightest our wide-open publicity measures. It was also noticed that we proposed to go through with the Ely Central deal.
After it became evident that we intended to keep on fighting, the Scheftels offices were openly visited and inspected in detail one day by the late Police Inspector McCafferty. In a bullying manner this police official let it be known that we were in official disfavor with him. His manner could hardly have been more offensive if he had been invading a den of counterfeiters. Mr. McCafferty did not specify just what he was after or just what he expected to find, but he made it plain to us that we were marked and that he had it in for us. He stalked scowlingly through the entire establishment and made vague threats of what was in store for us.
Late that night I learned that the Inspector had invaded the living-rooms of my associate, Nat. C. Goodwin, where he delivered himself somewhat as follows:
"What are you fellows trying to do, anyway? What are you trying to put across on us? Do you think we are going to stand for any such newspaper notoriety as you are getting and watch it with our arms folded? Do you think we are fools or crazy, or what? I want you to understand that you fellows have got your nerve with you. Get busy or the police will be on your backs to-morrow!"
I told Mr. Goodwin that our enemies had evidently sicked the Inspector on to us, but that I didn't think any action would be taken. We were victims and not culprits, and unless, indeed, the United States was Russia, nothing untoward could happen.
I promised Mr. Goodwin, however, that I would attend to the matter without delay. I laid all of the facts regarding the newspaper attack before a prominent citizen who promised forthwith to convey the information in person to the Inspector or one of his superiors. He did so. That was the last we heard of the matter.
The Engineering & Mining Journal's lawyers addressed themselves to customers of the Scheftels company, who had lost money in the market break in Ely Central from $4 to $1.50. By letter they urged them to send on a full statement of facts and suggested that they might be of service, and without charge.
Letters of this character were sent to large numbers of our customers, many of whom simply sent them to us. In some cases, however, customers who had read the attack in the Engineering & Mining Journal or quotations from it in widely circulated daily newspapers, needed but the letter from the lawyers to induce them to come forward with a complaint.
On the whole, this fishing expedition must have been something of a water-haul and a disappointment, for the attorneys of the Engineering & Mining Journal.
The Post-office Department at New York, in January and February, sent letters broadcast to readers of the Scheftels Weekly Market Letter, asking whether the business carried on was satisfactory—the usual form that is used where a firm is under investigation. Scores of these letters were forwarded to us by customers with remarks to the effect that evidently "somebody was after us." An inquiry of this sort is calculated to do terrible damage to the reputation and standing of any house that does a quasi-banking business. Our attorneys complained to Inspector Mayer of the New York division of the Post-office that an injustice was being done. No more letters of the character described were sent out, because the early replies that were received by the Inspector to his circular letter brought forth no serious complaints. However, it was afterward disclosed that the investigation did not cease here and that the Post-Office Department continued to conduct a searching inquiry only finally to abandon its enterprise.
Enters upon the scene an associate of the Engineering & Mining Journal's lawyers defending that publication against our suit for libel. He called at the Scheftels offices and demanded from Mr. Scheftels information with regard to the account of C. H. Slack of Chicago. He got it. It showed that Mr. Slack had purchased 50,000 shares of Bovard Consolidated at 10 cents per share, for which he had paid cash, and that Mr. Slack had purchased an additional 100,000 shares at 14¼ and 14¾ cents per share; and that Mr. Slack had refused, after the market declined to below the purchase price, to pay the balance due, because of delayed delivery.
The delay in delivery was accidental. The Scheftels company actually had in its possession two million shares of the stock or more, and the delivery would have been tendered earlier but for the fact that the raid on Ely Central had piled up so much work for the clerical force that everything was set back. We knew of no legitimate excuse for Mr. Slack, because he could have ordered the stock sold at any time, delivery or no delivery. The Slack transaction receives amplification here, because later, when the Scheftels corporation was raided by a Special Agent of the Department of Justice, it figured as one of the cases cited by the Agent in the warrant sworn to by him against B. H. Scheftels & Company as proving the commission of crime.
Another case about which Mr. Scheftels was asked to give full information was that of D. J. Szymanski, a corn doctor at 25 Broad Street. Mr. Scheftels had urged the Doctor to buy Ely Central when it was selling at 75 cents before the rise. Later, when the advance was well under way, above the $3 point, the Doctor bought some stock through the Scheftels corporation. When the price hit $4 he was urged to take profits. He refused to do so. When the attack began and the price broke badly the Doctor saw a big loss ahead.
He called at the Scheftels' office and begged for the return of the money he had lost in his Ely Central speculation.
The investigation was heralded among the brokers and caused much market pressure on the stocks fathered by the Scheftels company. We were not dismayed. To strengthen our position and to give added token of our good faith we increased our development operations at the mines. Our expenses in that quarter were swelled to the limit of working capacity on our underground explorations, as I realized that our salvation might depend on making good in quick order with Ely Central from a mining standpoint. We knew the ore was there and that it was up to us to get it before our enemies got us.