True Stories of Crime From the District Attorney's Office

by Arthur Cheney Train

The "Franklin Syndicate" had collapsed amid the astonished outcries of its thousands of victims, on November 24th, 1899, when, under the advice and with the assistance of Ammon, its organizer, "520 per cent. Miller," had fled to Canada. It was nearly four years later, in June, 1903, that Ammon, arraigned at the bar of justice as a criminal, heard Assistant District Attorney Nott call William F. Miller, convict, to the stand to testify against him. A curious contrast they presented as they faced one another; the emaciated youth of twenty-five, the hand of Death already tightly fastened upon his meagre frame, coughing, hollow-cheeked, insignificant, flat-nosed, almost repulsive, who dragged himself to the witness chair, and the swaggering athlete who glared at him from the bar surrounded by his cordon of able counsel. As Ammon fixed his penetrating gaze upon his former client, Miller turned pale and dropped his eyes. Then the prosecutor, realizing the danger of letting the old hypnotic power return, even for an instant, quickly stepped between them. Miller raised his eyes and smiled, and those who heard knew that this miserable creature had been through the fire and come forth to speak true things.

The trial of Ammon involved practically the reproving of the case against Miller, for which the latter had been convicted and sentenced to ten years in State's prison, whence he now issued like one from the tomb to point the skeleton, incriminating finger at his betrayer. But the case began by the convict-witness testifying that the whole business was a miserable fraud from start to finish, carried on and guided by the advice of the defendant. He told how he, a mere boy of twenty-one, burdened with a sick wife and baby, unfitted by training or ability for any sort of lucrative employment, a hanger-on of bucket shops and, in his palmiest days, a speculator in tiny lots of feebly margined stocks, finding himself without means of support, conceived the alluring idea of soliciting funds for investment, promising enormous interest, and paying this interest out of the principal intrusted to him. For a time he preyed only upon his friends, claiming "inside information" of large "deals" and paying ten per cent. per week on the money received out of his latest deposits.

Surely the history of civilization is a history of credulity. Miller prospered. His earlier friend-customers who had hesitatingly taken his receipt for ten dollars, and thereafter had received one dollar every Monday morning, repeated the operation and returned in ever-increasing numbers. From having his office "in his hat," he took an upper room in a small two-story house at 144 Floyd Street, Brooklyn—an humble tenement, destined to be the scene of one of the most extraordinary exhibitions of man's cupidity and foolishness in modern times. At first he had tramped round, like a pedler, delivering the dividends himself and soliciting more, but soon he hired a boy. This was in February, 1899. Business increased. The golden flood began to appear in an attenuated but constant rivulet. He hired four more employees and the whole top floor of the house. The golden rivulet became a steady stream. From a "panhandler" he rolled in ready thousands. The future opened into magnificent auriferous distances. He began to call himself "The Franklin Syndicate," and to advertise that "the way to wealth is as plain as the road to the market." He copied the real brokers and scattered circulars and "weekly letters" over the country, exciting the rural mind in distant Manitoba and Louisiana.

There was an instantaneous response. His mail required the exclusive attention of several clerks. The stream of gold became a rushing torrent. Every Monday morning the Floyd Street house was crowded with depositors who drew their interest, added to it, deposited it again, and went upon their way rejoicing. Nobody was going to have to work any more. The out-of-town customers received checks for their interest drawn upon "The Franklin Syndicate," together with printed receipts for their deposits, all signed "William F. Miller," by means of a rubber stamp. No human hand could have signed them all without writer's cramp. The rubber stamp was Miller's official signature. Then with a mighty roar the torrent burst into a deluge. The Floyd Street quarters were besieged by a clamoring multitude fighting to see which of them could give up his money first, and there had to be a special delivery for Miller's mail. He rented the whole house and hired fifty clerks. You could deposit your money almost anywhere, from the parlor to the pantry, the clothes closet or the bath-room. Fridays the public stormed the house en masse, since the money must be deposited on that day to draw interest for the following week. The crush was so enormous that the stoop broke down. Imagine it! In quiet Brooklyn! People struggling to get up the steps to cram their money into Miller's pockets! There he sat, behind a desk, at the top of the stoop, solemnly taking the money thrown down before him and handing out little pink and green stamped receipts in exchange. There was no place to put the money, so it was shoved on to the floor behind him. Friday afternoons Miller and his clerks waded through it, knee high. There was no pretense of bookkeeping. Simply in self-defense Miller issued in October a pronunciamento that he could not in justice to his business, consent to receive less than fifty dollars at one time. Theoretically, there was no reason why the thing should not have gone on practically forever, Miller and everybody else becoming richer and richer. So long as the golden stream swelled five times each year everybody would be happy. How could anybody fail to be happy who saw so much money lying around loose everywhere?

One of Miller's Franklin Syndicate Receipts.

But the business had increased to such an extent that Miller began to distrust his own capacity to handle it. He therefore secured a partner in the person of one Edward Schlessinger, and with him went to Charlestown, Mass., for the purpose of opening another office, in charge of which they placed a man named Louis Powers. History repeated itself. Powers shipped the deposits to Miller every day or two by express. Was there ever such a plethora of easy money?

But Schlessinger was no Miller. He decided that he must have a third of the profits (Heaven knows how they computed them!) and have them, moreover, each day in cash. Hence there was a daily accounting, part of the receipts being laid aside to pay off interest checks and interest, and the balance divided. Schlessinger carried his off in a bag; Miller took the rest, cash, money orders and checks, and deposited it in a real bank. How the money poured in may be realized from the fact that the excess of receipts over disbursements for the month ending November 16th was four hundred and thirty thousand dollars.

Hitherto Miller had been the central figure. Col. Robert A. Ammon now became the deus ex machina. Miller's advertising had become so extensive that he had been forced to retain a professional agent, one Rudolph Guenther, to supervise it, and when the newspapers began to make unpleasant comments, Guenther took Miller to Ammon's office in the Bennett Building in Nassau Street. Ammon accepted a hundred dollars from Miller, listened to his account of the business and examined copies of the circulars. When he was handed one of the printed receipts he said they were "incriminating." Miller must try to get them back. He advised (as many another learned counsellor has done) incorporating the business, since by this means stock could be sold and exchanged for the incriminating receipts. He explained the mistakes of the "Dean crowd," but showed how he had been able to safeguard them in spite of the fact that they had foolishly insisted on holding the stock in their company themselves instead of making their customers the stockholders. Nevertheless "you do not see any of the Dean people in jail," boasted Ammon. From now on Miller and he were in frequent consultation, and Ammon took steps to incorporate, procuring for that purpose from Wells, Fargo & Co. a certificate of deposit for one hundred thousand dollars. Occasionally he would visit Floyd Street to see how things were going. Miller became a mere puppet; Ammon twitched the wire.

It was now well on in November, and the press of both Boston and New York was filled with scathing attacks upon the Syndicate. The reporters became so inquisitive as to be annoying to the peaceful Miller. "Send the reporters over to me!" directed Ammon.