But Detective Wooldridge had seen so much of "guaranty" and "security" that he was suspicious of all companies which made this name a rallying point in their literature.
Also the Rhodus brothers seemed to be using the same old catch-words which had beguiled men into the fake underwriting schemes. So the detective was not impressed by "security" or "guarantee." He proceeded to investigate the record of the Rhodus brothers.
And ere the great scandal began to open out and assert itself, Wooldridge found that the Rhodus brothers had been in the lottery business in Denver in 1889 and 1890. Now it does not conduce to belief in the soundness of a firm to find that its managers have been common, cheap lottery workers. So Wooldridge went into the record.
In the course of his examinations he discovered that the Chicago Independent in January, 1899, contained the following notice:
In 1889 and 1890, Thos. Rhodus and Birch F. Rhodus were operating the Denver Lottery Company, later called the Denver State Lottery. The following are extracts from the Chicago Independent, January, 1899, number: "The attention of the postoffice authorities was attracted to this scheme by seeing circulars of the Denver Lottery Company about August 20, 1890, saying, 'All remittances to be addressed to A. C. Ross & Co.,' who were none other than Thomas F. Rhodus, Jr. Ross, or Rhodus, Jr., was arrested by postoffice authorities October 5, 1889, fined $100 and costs, which was paid November, 1889. A. C. Johnson, alias A. C. Ross, alias Thomas F. Rhodus, Jr., was arrested March, 1890, and was at that time running what was called the Denver State Lottery Company, having changed its name from Denver Lottery Company. They kept arresting him daily for over forty days. The federal grand jury found five indictments, with over one hundred counts, against A. C. Johnson, alias Thomas Rhodus, Jr., for fraudulent use of the United States mails. He then changed his business to the name of Bank of Commerce. Was arrested several times, and then sold out, or pretended to do so, to Birch F. Rhodus.
Trying Their Hand at Life Insurance.
"The Western Mutual Life Association of this city has been weighed in the balance by the Missouri and Michigan State Insurance Commissioners and found wanting. An examination of the concern by these officials, made as of August 31, 1898, has recently been reported upon. On that date a deficiency of assets under the most favorable showing of $55,635.36 was shown to exist. In other words, the association was impaired that amount.
"President Thomas F. Rhodus and Vice-President Birch F. Rhodus each received a salary of $10,000 a year, and there seems to have been a handsome expense allowance besides. Secretary Charles S. Johnson received $7,000 annually; Second Vice-President John B. Kirk, of James S. Kirk & Co., and Treasurer J. V. Clarke, President of the Hibernian Bank, under an arrangement, the annual sum of $27,000."
The facts here cited were disclosed by the investigation made by the Insurance Commissioners mentioned above. The association did not long survive this incident, and its assets were soon taken over by the Illinois Life Insurance Company.