In this wide distribution, however, lies one of his own greatest
safeguards against either criminal or civil prosecution.
Scattered over the country are his investors--the mill hand, the
poor seamstress, the humble artisan, whose total investments,
comprising perhaps all their savings, seldom exceed one hundred
dollars each; and, with their savings gone, there isn't money
left to pay carfare to the office of the financial agent, let
alone to undertake a civil suit or enlist the aid of the
authorities. The poor seamstress has no way of knowing any of her
fellow unfortunates. Hence the utter impossibility of cooperation
in seeking to get back their savings.
As an example of the fiscal agent, there may be cited the concern
of Douglas, Lacey & Company, already mentioned, a concern which
in four years, through its operations in this country and in
Canada, culled from the people of this country, according to its
own statement, over $2,000,000 in exchange for stock certificates
in more than forty varieties of mining companies. Here is a
letter written to a woman by this concern four years after she
had invested all her savings in the stock of one of these
companies through this concern, showing the advantage of the
fiscal agency plan:
DOUGLAS, LACEY & CO.
Financial Agents
66 Broadway.
New York Cable Address "Douglacey"--Anglo-American and Bedford
McNeil Codes Telephone, 790 & 791 Rector
DEAR MADAM: June 2, 1908.
Replying to your favor of June 1st would say that we do not find
in our files any recent letter from you, and your letter
addressed care of 44 Wall Street has probably gone to the Dead
Letter Office, from which you will in time receive it.
Now, in reply to your question, we think if you are at all
familiar with business procedure, you will see that it would be
impossible for the fiscal agents of any of the companies to
return money which had been paid for shares and which had been
turned over by the fiscal agents to the treasury of the various
companies and expended in development work on the different
properties.
It is true that we have sold stock for our customers at various
times and we are glad to do so when it is possible. At the
present time, however, as this company is in process of
reorganization, there would be no market for its stock and for
this reason we are unable to help you in the way you request.
Very truly yours Douglas, Lacey & Co.
In pursuing this method, few promoters have had the success of
Dr. John Grant Lyman. He is credited with having gathered in a
half million dollars in his International Zinc operations. This
company was supposed to have valuable zinc properties in the
Joplin district of Missouri. To unload its stock on the people of
this country Lyman organized the firm of Joshua Brown & Company,
Bankers, incorporated under the laws of West Virginia. Through
them the stock was sold until the collapse of the scheme in 1901,
when the investors found that what property it did own was
heavily mortgaged. While the firm was taking in the money, Lyman
maintained a racing stable, had a reputation as a daring
automobilist, and even invaded the sacred precincts of the New
York Stock Exchange.