In the preceding chapter I called attention to some of the atrociously false statements that were published on the day following the raid. I gave only an inkling. The newspapers declared that Ely Central had cost the Scheftels company 5 cents per share, that the capital stock was over-issued, and that the property was worthless. Jumbo Extension, which has since distributed $95,000 in dividends to its stockholders, has still a treasury reserve of $100,000 and is selling to-day in the markets at a share valuation of about one-quarter of a million dollars for the property, was also described as a "fake stock." Rawhide Coalition, which has produced upward of $400,000 in bullion, and which is to-day recognized as one of the substantial gold mines of the Far West, was labeled plain junk. Bovard, which represented an investment of nearly $100,000 for property account and mine development and which had been promoted at 10 cents per share on representations that it was a "prospect," was stated to be a raw steal.
The Scheftels corporation was said to have got away with millions of dollars by selling "fake mining stocks." It was also stated that I had profited to the extent of millions for my personal account. The Scheftels mailing-list was described as a regulation "sucker list," notwithstanding the fact that the principal names that were on it were stockholders in Guggenheim companies.
The ringleaders were pictured as myself—"a man with an awful Past"—and the "notorious character," "Red Letter" Sullivan. Mr. Sullivan was styled as the facile letter-writer who had addressed the "suckers" and hypnotized them, principally widows and orphans, to withdraw their money from the savings-banks and send it to the Scheftels sharks. "Red Letter" Sullivan was also referred to as a man with a "Past."
The true facts regarding Mr. Sullivan's connection with the Scheftels company were these: A few months before, he had applied for a position. He was then employed as manager of a Boston stock-brokerage office. He was awarded the job of time-clerk in the stenographers' department.
His job, while employed with the Scheftels company, was to see that the stenographers reported on time, did their work properly and were not paid for any services they did not render. He had little or nothing whatever to do with the correspondence department. He never dictated any answers to letters received by the Scheftels company. Never was he employed in an executive capacity by the Scheftels company. We knew little or nothing of the "Red Letter" title with which he had been decorated. The first we learned of it was in the newspapers after the raid. Investigation revealed that ten years before, while a broker in Chicago, he had issued a weekly market letter which was printed on red paper.
I have thus far not given space to one of the greatest wrongs connected with this disgraceful proceeding—the wrong and damage inflicted upon a multitude of helpless stockholders. While the Special Agent of the Department of Justice and his armed followers were wrecking the Scheftels offices and terrorizing the place, the Scheftels group of mining stocks was being savagely raided on the Curb and enormous losses were inflicted on the public. Thousands of margin accounts were wiped out in less time than it takes to tell of the massacre. Declines in Ely Central, Jumbo Extension, Rawhide Coalition and Bovard Consolidated exceeded $2,000,000. This loss was distributed among approximately fourteen thousand shareholders of record and as many more not of record.
This large army of innocent shareholders was helpless. From such species of confiscation the law affords no relief or recourse, except actual acquittal of the arrested persons, in whom lies the confiding investor's only chance for the market rehabilitation of his securities.
A TOOL'S CONFESSION
The signed confession of the Tool of the Special Agent, who appeared before Assistant Attorneys Dorr and Smith at the United States Attorney's office in New York, which says he gave false testimony, and the voluntary statement of John J. Roach, a stock broker who was employed by the now defunct firm of Frederick Simmonds, regarding the relations between the Special Agent and that firm, while Special Agent of the Government, reveal the weak foundations of the Government's charges.
The Tool, prior to the raid, had been in the Scheftels employ. For a few months he had been a traveling business-getter for the firm. Then he was discharged. He associated himself with Frederick Simmonds, a member of the Consolidated Stock Exchange. Mr. Simmonds was badly in debt. The Tool had no money. The Agent, when he was trying to get the United States Attorney's office in New York to agree that the information collected was sufficient to warrant a raid, prevailed upon the Tool to appear before the assistant attorneys and give testimony.