the uninformed promoter. The fraudulent promoter is he who recognizes
this great and worthy ambition of many people to buy a spot to which
they can some day retire and work and rest and dream and enjoy the
coming and going of the seasons, and the sunshine and the shadows, and
who capitalizes this ambition, with that industry as his stock in trade
which, at the particular moment, happens to offer the most attractive
inducements. Those familiar with the industry he is exploiting, can tell
him by his actions, by his words, by his nods and winks. It is hard for
the crook to disguise himself to the informed.
Distinguished from the fraudulent promoter is the uninformed promoter,
but, so far as results are concerned, there is not much difference
between them for the innocent investor. They both lead him to failure.
They are unlike only in this, that the pathway of the one is lined with
deception, crookedness and chicanery; of the other, with blasted hopes
based upon good intentions but bad information. Both lead to the
self-same sepulcher which in the distance looks white and beautiful but
when reached is filled with the bones of dead men.
There is not much difference after all, when one comes right down to the
facts, between the crook who starts out deliberately to get one's money
and the fellow who starts out in ignorance and makes great promises of
returns that he knows nothing about. Both succeed in getting one's money
and both succeed in misleading those who have a desire to lay aside
something for their old days. We naturally feel more charity for him who
has good intentions, but who fails, than for him who starts out with bad
intentions. But, after all, only results count.
Did you ever receive the literature of one of these various concerns
that has pecan or apple orchards to sell? How beautiful their schemes
look on paper! With what exquisite care they have worked out the
pictures and the language and the columns of figures showing the
profits! While writing this article I have before me a prospectus of a
certain pecan company that prints columns of attractive figures.
Fearful, however, that the figures would not convince, it has resorted
to all the various schemes of the printers' art in its portrayal of the
prospective profits from a grove set to pecans and Satsuma oranges, and
it tells you in conclusion that it guarantees by a bond, underwritten by
a responsible trust company, the fulfillment of all its representations.
Yet what are the facts? Their lands are located in a section where the
thermometer falls to a point that makes highly improbable the profitable
growing of Satsuma oranges. And all their figures are merely estimates
of the wildest character, printed in attractive columns, based upon
nothing.
As a member of the National Nut Growers Association I was this year
chairman of the committee on orchard records. I sent out blanks, with
lists of questions, to many prominent nut growers to see if I could
secure data upon which to base a report to the association. The replies
I received showed the existence of some very promising young orchards of
small size, well cared for, but they also showed that there was no such
thing as an intelligent report upon which reliable data as to the
bearing records of orchards could be based for any future calculations.
There are two reasons for this. First, most of the figures we have are
based upon the records of a few pet trees around the dooryard or garden,
grown under favorable conditions. Second, the young groves are not yet
old enough for anyone to say, with any degree of accuracy, what the
results will be. Therefore, the alluring figures printed in these
pamphlets are only guesses.
Furthermore, what of the contract of these concerns? What does it
specify? You would be surprised to know the legal construction of one of
these contracts, together with their guaranty bond. In most cases they
advertise to plant, and properly cultivate for a period of five to seven
years, orchards of the finest varieties of budded or grafted pecan
trees, with Satsuma oranges or figs set between. But the guaranty
company is usually wise enough to have lawyers who are able to advise
them of their liabilities, and about all they actually guarantee is
that, after a period of five years, provided all payments have been
promptly met, there will be turned over to the purchaser five acres of
ground with trees upon it. Five years old? No, they may not be one year
old. Budded or grafted? No, they may be mere seedlings. Oranges set
between them? No, the orange has passed out of the proposition before
the bond stage. The companies generally print a copy of the bond, but
usually in such small type that the victim does not read it, though the
heading is always prominent. It thunders in the index and fizzles in the
context.
Moreover, suppose suit is brought on one of these contracts and bonds?
What is the measure of damages? What basis has any court or jury for
fixing damages? And be it remembered that courts do not exist for the
protection of fools against their folly. The principle "caveat emptor"
is as old as the common law itself, and it means that the buyer must
beware, or in other words, that he should inform himself, and that he
cannot expect the courts to protect him where he has failed to exercise
due caution and diligence. Therefore, as a lawyer, I should very much
hesitate to take on a contingent fee the suit of one of these various
victims against a promoting orchard corporation.
However, in any jurisdiction where there is a criminal statute against
fraudulent representation and obtaining money under false pretenses, I
should not hesitate, if I were the prosecuting attorney, to indict every
member of such a corporation, and, to sustain the case, I would simply
present to a jury of honest men the representations in their advertising
literature, and then have the court instruct the same jury as to the
validity and limitations of their contract. Their advertising is
brilliant enough to dazzle the sun. Their contract is as dull as a mud
pie.
In addition to all of this comes the question of orcharding by proxy,
and the success of the unit or acreage system, and many other similar
questions; and let me say that I doubt if there is today in the United
States one large development scheme, either in pecan or apple orchards,
that will prove of ultimate financial profit and success to the
purchaser. The promoter may get rich--he has nothing at stake. In most
instances he has the price of the land in his pocket before there is a
lick of work done on it, and the payments come in regularly and promptly
to take care of his salary and the meager and unscientific development.
Of course I would not be understood as saying that pecan or apple
orchards cannot be made profitable. I am of the opinion that reasonable
sized orchards in proper locations and proper soil, of proper varieties,
with proper care in handling, are good investments, and, as proof of my
confidence, I am planting orchards both in the north and south. The
adjective "proper" which I have used here may seem insignificant at the
start but, believe me, before you have begun to clip the coupons off
your orchard bonds this adjective will loom up as important as Webster's
Unabridged Dictionary. In fact you will wonder how it has been possible
for anyone to forecast in one word such comprehensive knowledge. Think
of a man a thousand miles away putting money into the hands of some
unknown concern, for five acres of unknown land, to be set in unknown
varieties of trees, to be cared for by unknown individuals. Can he not
see that, in keeping with all the other unknown factors, his profits
must also be unknown?
We look at a great industrial enterprise, such as the steel trust, and
marvel at its success. But it must be remembered that this industry
started many years ago, and step by step built furnace after furnace and
mill after mill, after the owners had tried out and become familiar with
all the factors of that industry, and after great corps of trained
experts had been developed, and after science had given to this industry
many of the most marvelous mechanical inventions of the age. These facts
are overlooked, however, when some fellow steps up and proposes to put a
steel-trust-orchard on the market in twelve months. In most industrial
enterprises there are well-known and established factors to be
considered. In horticultural enterprises, however, no man knows what
twelve months hence will bring. I read the other day with great
interest the prospectus of a great pecan orchard started several years
ago by a very honorable and high-minded man, and the promises of success
were most alluring. What are the facts? The boll weevil came along and
wiped out his intermediate cotton crops. The floods came later and
destroyed acres of his orchards, and, if he were to write a prospectus
today, it would no doubt be a statement of hope rather than a statement
of facts. He would no doubt turn from the Book of Revelations, where at
that time he saw "a new heaven and a new earth," and write from the Book
of Genesis, where "the earth was without form and void."
How many people have been defrauded by these various schemes, no one
knows. How many clerks, barbers, bookkeepers, stenographers, students,
preachers, doctors, lawyers, have contributed funds for farms and future
homes in sections where they would not live if they owned half of the
county. How many people have been separated from their cash by
literature advertising rich, fertile lands in sections where the
alligator will bask unmolested in miasma for the next fifty years, and
where projects should be sold by the gallon instead of by the acre.
Some time ago it was reported that inquiries in reference to the
feasibility and profits of various orchard schemes had come in to the
Bureau of Plant Industry of the Agricultural Department, at Washington,
in such numbers that the officials of that Bureau had considered the
advisability of printing a general circular, which they could send to
the inquirers, advising them to make due investigation, and giving a few
general suggestions about proxy farming and orchard schemes. I was
advised by a friend in the middle west that the contemplated issuance of
this circular by the Bureau of Plant Industry had aroused a number of
protests throughout the country, and that various Senators and Members
of the House of Representatives had entered strong protests with the
Secretary of Agriculture against it. A number of these protests have
come to my notice, and they take various forms of opposition, but are
all unanimous against the Department of Agriculture offering to the
prospective purchaser any information. Various reasons for their stand
were given by the protestants, but how flimsy and ridiculous they are
when analyzed. Congress for a number of years has been appropriating
money and authorizing certain work by the Department of Agriculture. It
is the people's money, and the people's Department, and the information
gathered by the experts in this Department ought to be the people's
information, and it ought to be possible for any citizen to write the
Department a letter about any proposition that he has received from any
of these various promoters, and have the advice of those who know most
about it.
I suppose the Department of Agriculture has entirely too many duties to
perform to undertake a work of this kind, but what an inconsistent
position it is for a Member of Congress, who has been voting for
appropriations to carry on this work, to appeal to the Secretary of
Agriculture to suppress such information in order that some exploiter
may get somebody's money under false representations. I think if it were
possible today to know the list of concerns and companies who
registered, directly or through agents, their opposition to this
proposed warning circular, you would have a correct index of the
concerns good to let alone. For no honest, reputable individual or
company need be afraid of the work or suggestions of that great
Department. I have the pleasure of knowing many of the officials in the
Bureau of Plant Industry, and never anywhere have I seen a body of men
so conscientiously engaged in the work of promoting legitimate
horticultural and agricultural knowledge. It is the very life of that
great Department, and its officers and employees above everyone else are
most interested in seeing the land produce the most and best that it can
be made to produce, and they are best qualified to pass upon these
matters.
Most of the questions in these various schemes are questions of soil and
horticulture. One letter in opposition to the Agricultural Department's
attitude, that was brought to my attention, stated that crops varied
under different conditions, and that no one was able to tell what a
certain soil would or would not produce throughout a period of years,
and intimated that the Department of Agriculture might mislead the
public; and yet the concern that sent it printed columns of figures
guaranteeing returns from pecans and Satsuma oranges in a section where
orange growing is of very doubtful possibility. Boiling down these
objections by the promoters, they come to simply this: That the
Agricultural Department, with no motive but to tell the truth, and with
its corps of trained experts, might mislead the public, but they (the
promoters) could not possibly be mistaken in their fabulous figures
compiled for the purpose of getting money from some misinformed victim.
Proxy farming never was a success and I do not think it ever will be.
One of my friends told me a short time ago of a very successful young
pecan orchard on the gulf coast. Upon inquiry I found that it was of
reasonable size, nine years old, and that the owner had lived in it nine
years. It was not 500 acres in extent, or 1,000 acres, or 2,000 acres,
but about 20 acres. Last summer I went into a beautiful apple orchard in
Southern Indiana and saw about forty acres of trees bending to the
ground with delicious Grimes Golden apples. On that particular day there
were great crowds of people walking among the trees and admiring the
fruit. I too walked among the trees a short time, but of greater
interest to me than the trees was the old, gray-haired man who had made
the orchard. The trees could not talk, but he could, and he told the
story of the years of care, and diligence, and work, and thought, and
patience, that showed why it is not possible to cover the mountains of a
state with orchards bringing almost immediate and fabulous incomes.
Some time ago I stood talking to the old superintendent of the Botanical
Garden in Washington--William R. Smith, now deceased--and while
discussing with him the requisites for tree culture, he said "Young man,
you have left out the most important one of them all," When I asked him
what I had left out, he said "above all things it takes the eye of the
master." So it does, and the master is he whose vigilance is continual,
who watches each tree as if it were a growing child--as indeed it is, a
child of the forests--who has the care and the patience, and who is not
dazzled by the glitter of the dollar, but who loves trees because they
are trees.
Theoretically, one can figure great successes in big horticultural
development propositions, but these figures rest upon theory and not
fact. It would be difficult to state all the reasons why I have a firm
conviction that such big schemes of every kind will fall, but I believe
this conviction is shared by the foremost thinkers in the horticultural
world. A four-year-old boy was once taken to see the animals in a
circus. He was very much interested, but, when shown the tremendous
elephant, shook his head and said "he is too big."
A small grove properly handled ought to be an excellent investment. The
various uncertainties and vicissitudes involved can, in a degree, be
compensated for by great care; and I suppose it would be possible even
with some of these big schemes--by placing enough money behind them--to
insure a fair degree of success. It must be borne in mind, however, that
these promoters, of whom we have been speaking, are not so much
concerned in the successful orchard as they are in big salaries and
profits, and, if one has money enough to pay big salaries and profits,
and still pay for the proper care of the orchard, then he does not need
an orchard. Most of these promoters charge too much for a proper and
honest development alone, and too little for the proper development plus
the profits and salaries of the promoters. I wish it were not so. I wish
the old earth could be made to smile bountiful crops without such
expensive tickling, but this is one of the checks and balances that
nature places upon her great storehouse of wealth.
* * * * *
The Chairman: This is a matter of very great importance and I hope we
shall have a good discussion, from a practical point of view, by men who
know about fraudulent promotions and their effect. We ought to go on
record in this matter right now. I know of numbers of teachers, doctors
and other poor people who have put money into nut promotion schemes
without knowing anything about the ultimate prospect of profit.
Mr. Hutt: One noticeable thing about the promoter's literature is that
he never knows anything about crop failure, and in the agricultural and
horticultural world that is a thing that is painfully evident to a man
who has been in business a great length of time. In the promoter's
literature it is just a matter of multiplication; if one tree will
produce so much in a year, a hundred trees will produce a hundred times
as much. I got a letter the other day from Mr. S. H. James, of Beaumont,
Louisiana, and he said, "I have been very fortunate, I have actually had
two good crops in succession," and when you come to compare that with
the promoter's literature--why he knows no such thing as crop failure.
Anybody who knows anything about agricultural or horticultural work
knows that we have winter and floods and everything else to contend
with.
The Chairman: Someone might tell us about failures they happen to know
of in promotion schemes.
Mr. Smith: I would like to ask if Mr. Littlepage isn't going to open up
that barrel of actual facts that he has about yields?
Mr. Littlepage: Mr. President, I didn't know that I had a whole barrel
of actual facts. When I started in several years ago a barrel wouldn't
have held all of them, but I think that now I could put the actual facts
in a thimble. I've got several barrels of good pecans, however, I'd like
to open up and let Mr. Smith sample if he wants to.
The Chairman: Let's hear about frauds from someone who knows how the
land was managed and how the trees were managed and how it actually
occurred.
Mr. Van Duzee: Mr. President, I feel that I ought to say something,
first in commendation of the paper itself. It is a question how far we,
as an Association, are responsible for the care of our fellowmen, but at
this period when the industry is new, I feel that it is a very
legitimate thing for us to do a little work to try and prevent these
people from preying upon our fellowmen. The president remarked this
morning that something was an evidence of the tremendous waste in
Nature. It is true, Nature, in building a forest, wastes a vast amount
of time and energy. These people who are preying upon the nut industry
today find as their victims the weaklings which Nature buries in the
forest. Those things are incidental and we must expect them, but I feel
that a paper of this kind, at this time, is a very valuable thing and I
hope it will receive wide publication. We cannot say too much to
discourage this sort of thing. Now, to respond, in a measure, to the
President's request for actual facts, I am confronted with this
proposition, that some of the men who have made the greatest failures
are men who have done so through ignorance. They are honest men, they
are personal friends of mine. I don't care to go too much into details,
because they are just as sorry today as I am, but I have seen this done.
I have seen hundreds of acres of nut orchards in the South planted with
the culls from nurseries bought at a very low figure. I have seen these
trees neglected absolutely, not in one case but in many cases. I have
seen the weeds as high as the trees at the time when a telegram was
received by the the local agent that a carload of the purchasers of
these tracts was about to leave to look over their property. I have seen
the local manager hustle out, when he got that telegram, and hire every
mule in the community to come in and, with a plow, throw a furrow or two
to the rows of trees so that they could be distinguished from the weeds
they were growing among. As Mr. Littlepage has said, there can be no
success in such operations; and I feel, looking at it in a very broad
way, that this is a very good time to emphasize the point that those of
us who have the greatest experience in the growing of nut trees do not
feel that these enterprises are legitimate, or that they promise very
much success. (Applause.)
Mr. Pomeroy: I live just a short distance from Buffalo. A few months
ago--I got it on the very best authority--there was some salesman in
Buffalo who didn't have time to call on all those who wanted to give him
money for pecan propositions. He didn't have time, Doctor, he just had
to skip hundreds of them, he said; he was just going from one place to
another, making his collections. Buffalo is a city of only about 450,000
people and there must be some money being collected and sent in to
somebody.
The Chairman: Very glad to hear of that instance; let's hear of others.
Mr. Littlepage: I would like, if possible, to answer Mr. Smith's
question. I didn't know that he referred to facts about these
promotions, I thought perhaps he meant facts about nut growing.
Mr. Smith: You said you had made inquiries as to nuts, harvest yields,
orchard yields; it was those, particularly, that I had in mind.
Mr. Littlepage: Oh well, I could give those to you readily. There are
some very promising orchards, making a good showing under investigation,
handled under proper conditions and of proper size. I would not want to
say that those things are not possible. Talking specifically of these
overgrown schemes, one of them is recalled to my mind, a development
company in southern Georgia, that advertises very alluringly. It set out
one year a lot of culls; they all died. I am told that they went out the
second year and, without any further preparation, dug holes and set out
another lot of culls. They too died; and then they went out the third
year and planted nuts, and those trees, at the end of a year's growth,
were perhaps six or seven inches high, and the salesman from that
company, I understood, took one of the prospective purchasers over into
a fine grove owned by another man on the opposite side of the road, and
let him pick out his five acres from the orchard across the road. That's
one type I could multiply indefinitely.
Mr. W. C. Reed: I think this is a very important matter. As a nursery
man who has sold a great many trees to promoting companies, I want to
say that I have never, with one exception, seen an orchard that has been
a success, but I have seen hundreds of failures, some of them where they
have set out orchards of 150,000 trees and sold them off in one and ten
acre tracts, and in only one case have I seen a success. I think these
promotions should be avoided by the nut growers of the North.
The Chairman: This is very valuable information, coming from a dealer.