University of CaliforiMj Berkeley
From the Library of
EdwJHd Oscar Heinrich__________________ÄS*

■ ;
OF
■mi
CONFESSIONS
CONFIDENCE MAN
m
¥; ^■J7-'- -jf*r. T?-:'¿ ?: ■• t-‘/f <‘if ; »?''-i
MMPHHSSiffii
yfijyfrW.
HHBBflHeB™
MCONFESSIONS OF A
CONFIDENCE MAN
A HANDBOOK FOB SUCKERS
BY
EDWARD H. SMITH
All that you meet are thieves: to Athena go
Break open shops; nothing can you steal,
But thieves do lose it.
—Timon of Athens
NEW YORK
Scientific American Publishing Co.
munn & co.s®
Copyright, 1920, by
CURTIS PUBLISHING COMPANY
Copyright, 1922* by
SCIENTIFIC AMERICAN PUBLISHING COMPANY
The right of Translation is Reserved in all Countries including thi
Scandinavian.PREFACE
BOOK should have a purpose. The moralists
demand it and we accept. It may, however,
be cautious to observe that the only discernible
design of the average volume is to take some trifles
of cash from the pocket of the reader. In this detail
the authors of the present writing lay claim to origi-
nality; These confessions are intended, primarily and
finally, to keep the money of their audience at home,
safe from the lures and trammels of outrageous temp-
tors. In how far they may succeed in this high and
laudable ambition depends upon him who reads, for
good counsel is lost upon vacancy.
It is one of the commonplaces to observe that several
billion dollars are lost by our public every year be-
cause that public loves to chase the fen-fire of quick
and easy money and persists in this ancient pursuit
in spite of every protestation. What is not so well
understood is the fact that a large and growing class
of men makes its fortunes by preying upon this fatuous
hope of riches in the poor, the simple and the ill-
advised, and that what many a man regards as error,
misinvestment or unhappy speculation is, in fact, no
more than downright robbery by cunning instead of
by violence. Prom this type of crime no man and
no class is immune, and this is the main point made
by the present confessor. The rural banker is as
prone to the wiles of the confidence man as the
Viiviii	Preface
veracious and authentic rustic, and the man of edu-
cation and position is today more likely to be gulled
than the obscure simpleton. Indeed, it is the man
who feels himself most secure that stands in the
greatest danger. Accordingly, most men may read
some profit out of what is set down here. That, at
least, is the intention of the retired and chastened
chevalier d’Industrie who sponsors it.
There is, to be sure, a class whose members could
never, by any chance, be deceived by such devices as
are here set forth; a kind of person far too clever,
astute, far-sighted and aloof. To this group you and
I unquestionably belong. If we read at all it must
be for entertainment, not for profit or information,
since we know whatever is knowledge. Paraphrasing
what Mark Twain is reported to have said of Kipling,
we know whatever is to be known—you know it all
and I know the rest. We are in need of no teach-
ing, and “Confessions of a Confidence Man,” can
serve us as no more than a reminder of the fallacies
of the man next door. It is to him, of course, that
the serious undertone of the book is addressed.
EDWARD H. SMITH.
November, 1922.CONTENTS
CHAPTER I.—Age of Con ....					PAGES 1-18
II.—Trimming the Financier	•				19-34
III.—The Talking Typewriter	.				35-45
IV.—Schemes for Business Men					47-61
V.—Frauds for the Wise .	•				63-74
VI.—The Wonderful Window	Closer				75-87
VII.—Gold and Greed . . .					89-99
VIII.—Patents and Pirates .	•				101-117
IX.—The Color of Romance	•				119-136
X.—The Wireless Piano	•				137-150
XI.—The Public’s Credulity	•				151-163
XII.—Oil and Your Money .	•				165-181
XIII.—The Gold Brick, Modernized					183-196
XIV.—The People’s Liberty Bonds					197-213
XV.—Milking a Dry Brewery	•				215-237
XVI.—The Discretionary Swindle					239-254
XVII.—The Game of Games	•				255-273
XVIII.—Radio and Chain Stores					275-293CONFESSIONS
OF A CONFIDENCE MAN
CHAPTER I.
THE AGE OP CON.
iN the placid spring of 1910 a young man, W. C.
Crosby, found himself poor and determined to
be rich.
It was no sudden geysering of ambition within him.
He had been fluctuating between fortune and indi-
gence since boyhood. Several times after his six-
teenth year Crosby had made himself wealthy by
means within and without the law, and just as often
he had spent and speculated and skidded his way
back to poverty. And there he stood now, beside
the highroad, looking wistfully back to his fortieth
year and forward to being moneyless within a few
months. The prospect did not disconcert him. He
had been tossed about long enough to be perfectly
resilient. But he must get in motion at once. He
must have a scheme of some kind and go to work.
By the time the roses were blowing in the suburban
gardens, W. C. Crosby—under a somewhat altered
name—had flowered out in Broad Street, overlooking
Wall, as an installment dealer in speculative stocks.
The euphemism he permitted himself in the matter
of his firm name was dictated by caution. Not that
12 Confessions of a Confidence Man
he was, as the phrase goes, known to the police, but
that the post-office inspectors, the commercial-rating
people and others of the prying crew who often in-
terfere with the best-laid plans of dishonest men,
were far too familiar with his proper name and many
of his past peccabilities. These gentlemen would un-
questionably have called Crosby a confidence man—
and who are we to dispute official opinion? The fact
remained, however, that they had not then lived to
prove it. They had arrested this scheming gentleman
several dozen times in the course of twenty years or
so, but they had never yet been able to close retentive
doors against him. All of which they attributed to
bad luck and Crosby to his own perspicacity.
That was nearly a dozen years ago. Since twenty
years of scheming and swindling had not brought him
low, this debonair concocter of business marvels looked
forward to immediate prosperity and lasting immu-
nity. He considered his installment-stock scheme
perhaps the surest and safest of the many tricks he
had devised or used in all his roguery. No need to
describe it beyond the confession that it was purely
a device for lightening the purses and shortening the
bank balances of the avaricious and unwary. Crosby
was not the only man and his by no means a solitary
firm in this field. And none of the others had gone
to jail, though some had passed it uncommon close.
So Crosby felt at peace with trouble and went ahead.
Seven years later and six years after he had left
this Broad Street business at the height of its pros-
perity to turn his variable and subtle talents to other
endeavors, W. C. Crosby was placed on trial in the
United States District Court in New York, chargedThe Age of Con
3
with using the mails to defraud in connection with
this long-extinct enterprise. And somewhat there-
after he entered the gates of Atlanta, which swing
inward with alacrity and outward painfully. Here
he remained a guest of the Government for two years.
Not long ago, Crosby returned from his expiatory
pilgrimage, punished, chastened and even contrite.
He is done with that moving and changing world in
which he was for more than a quarter century a large
and perhaps a luminous figure. He is finished with
con. And in token of his resolution he intends here
to burn his bridges behind him by revealing com-
pletely the secrets and conspiracies of his craft. He
goes on the assumption that he knows his subject as
thoroughly as anyone living to-day—this with all
proper modesty.
A man who has been intimate and more or less
continuously associated for upward of thirty years
with the modern confidence or get-rich-quick game in
a hundred of its variations, who has known nearly all
the contemporary large operators in this field and
has been closely or distantly connected with most of
them, must be conceded very definite knowledge of
his profession. In the same spirit it is reasonable
to believe that a man who has taken perhaps one
and a half million dollars from the public as his
personal profit from his schemes must have possessed
special gifts in his dubious line. The number and
depth of the iniquities are confessed at the outset,
with nothing to offset the evil record but the plea
that the perpetrator has been punished beyond what
is implied by a sentence of two years in prison, and
the assurance that he is done with his crimes and is4 Confessions of a Confidence Man
trying to make some sort of reparation by disclosing
the whole fabric of swindling to the public for its
future protection.
Crosby profited a million and a half by his crimes
—and has nothing left. He defrauded persons in all
parts of the country and in all stations, from the
obscure sucker to the city banker. He worked every
imaginable type of superior confidence trick. His
activities took him over a good half of the United
States and he has been engaged in scores of industries
—mining, oil, inventions, lands, brokerage, banking,
local and general promotions, building, real estate,
engineering, electrical and mechanical devising, hotels,
produce and what not. To many of the enterprises
he initiated he brought the intent of honesty. As
often as otherwise he planned his adventures along
legitimate lines, but the itch of quick-and-easy money
always overcame him and in the end his projects
uniformly eventuated in fraud. Why he does not
attempt to say, unless it was that the oblique was
always easier for him than the straight,?*
For the purpose of this volume Crosby is the con-
fessor and furnisher of information. What he wishes
to attempt in the following narrative is an informa-
tive survey of the whole field of con—of that large
and inclusive class of swindles based on misplaced
confidence and worked by means of a certain definite
psychology in the mass of mankind. It may not be
amiss to say that the man who stands behind this
material is a person of education and rather general
culture. He is a graduate engineer; he was always
an indefatigable reader of everything that concerned
his multifarious activities and much that did not.5
The Age of Con
No man without unusual equipment could have done
his deeds. Above everything else, he is a shrewd and
sophisticated knower of life. He has watched the vain
procession for many years with eyes that defeat all
masquerade—a very different person from the crook
as he exists in the mind of the general public, very
different from the old type of confidence man.
The origin of the confidence game is not easy to
trace. The Vedas and the Mediterranean classics reveal
the ancient gods themselves as sad rascals. Petronius
and the Gesta Romanorum contain descriptions of
Latin roguery. Chaucer is forever dwelling on the
trickery and scoundrelism of his contemporaries and
in the succeeding era a whole literature of lawlessness
had sprung up in Europe, reflecting the manners and
methods of the engaging criminals of the sixteenth
and seventeenth centuries, undoubtedly greatly ro-
manticised. Lazarillo de Tormes in Spain, Gil Bias
in France, and Till Eulenspiegel in Germany are the
archetypes. England’s Robin Hood is a quotable but
less analogous figure. The early English novelists
are, however, brimming with the stories of picaroons
who are the progenitors of the modern confidence
man. The chaste Richardson has a type in his Clarissa.
De Foe’s Colonel Jack is of the stripe and so are the
numerous picaresque heroes or antiheroes of Fielding.
And Smollett in his Roderick Random described with
uncanny exactness the work of a bunko steerer. Those
familiar with this old romance will remember how
Random and his friend Strop were accosted by a
suave stranger on their arrival in London and shortly
relieved of their gold in a card game, perhaps the6 Confessions of a Confidence Man
very eight-dice-eloth which came into enormous profit-
ableness in America a good deal later under the
familiar name of banco.
But all these rogues and their rogueries, with the
exception of the last, bear only a distant relationship
to the great American confidence game. They are the
forgotten ancestors. Banco, or eight-dice-cloth, on
the other hand, was one of the three immediate par-
ents—if I may take such a liberty with parentage—
of the game as it exists to-day. The other two are
the old sawdust or green-goods game and the gold
brick of poignant memory. These latter two appear
to have been indigenous and all three began life in
this country simultaneously, or within a single decade.
Banco, brought across the Atlantic by the inflow-
ing British crook, was first put to work about 1855
in the Western United States, contradictory as that
may seem. In my judgment it was preceded a few
years by the gold-brick swindle in its most' primitive
form and followed in a few years by the green-goods
fraud. These early confidence tricks are important
to any consideration of the game as it now stands,
since they reveal how social conditions breed, cultivate
and change the practices and devices of the swindler.
The gold craze, which swept over the United States
with the 1849 rush to California and the succeeding
waves, gave rise to the gold-brick scheme. The coun-
try was drunken writh gold greed. The marvelous
stories of nuggets dug from the hills and millions
washed from the California creek gravels had the
population in so fabulous a frame of mind that nothing
was easier for the sharper than to play the stranded
miner forced to sell a brick of gold for much less7
The Age of Con
than its value. This was the erudest form of the
gold-brick game, which has passed through innumer-
able steps of evolution since then and is—though
it may be a surprise—still worked in a greatly elabo-
rated form.
The crook is always attracted to regions of sudden
prosperity and quick expansion. There he finds loose
and easy money. So it was natural for the recently
arrived British swindler to flow west to California
along with the gambler and the dance-hall prostitute.
It was thus that the great and costly game of banco
came to be introduced to America via the Pacific
Slope. Banco masqueraded as a lottery, but was
simply a gamble with marked cards or a stacked deck.
Its important feature was the manner in which the
victim was led to the altar. Bopers and steerers were
sent out who struck up acquaintances with miners
who had more gold than sense and led them, after
winning their confidence, to the banco establishment,
where the victim was skillfully led along through a
series of small winnings to a great wager—which he
invariably lost. Here are all the characteristics of
the complete confidence game, and it was from the
ropers used in this swindle that we have the still cur-
rent bunko steerer. In later years banco, with its
name transmuted into bunko, was played in every
large American city and its victims were the verdant
rubes of fragrant memory.
Green goods came into notice on the heels of banco
and was again born of a social condition. During and
after the Civil War the paper currency was enor-
mously expanded and in many parts of the country
the treasury certificate &ud the bank note displaced8 Confessions of a Confidence Man
specie for the first time. Many were not familiar with
the new money or the precautions taken in its pro-
duction, and these retarded ones were easy prey for
schemers who pretended to sell counterfeit or genuine
bank notes at great reductions.
Just who originated the green-goods idea has always
been in dispute. Con men of the old school accredit
it to various of their former leaders. Major Arthur
Griffiths, the Scotland Yard authority, who made a
study of this game a number of years ago, attributes
it to James “King” McNally, who is said to have
plied it first in New York. Griffiths got his informa-
tion from the late Thomas Byrnes, the celebrated New
York police inspector and detective chief, and from
testimony given before the Lexow committee. The
probabilities are with this authority. Certainly green
goods was originally a New York game, and McNally
was at least its first large operator.
In the green-goods game again success depended
on the artful preparation of the victim, the winning
of his confidence, the dulling of his good sense, the
allaying of his suspicions and the excitation of his
natural avarice—all the elements of the genuine con-
fidence fraud. Later on one of the chief ingredients
of the latter-day con concoction was added when the
victim was made to take part in the criminal con-
spiracy and was thus stripped of his right to go to
the police and complain.
Most present-day schemes are descended detail for
detail from these old and sterile frauds. The ever-
fruitful mining-stock swindle is a mixture of the
gold-brick and green-goods rackets. And there isn’t
a get-rich-quick mechanism in use to-day that doesThe Age of Con	9
not employ some variant of the steerer who was first
used in banco.
Now then, if the con game was first plied about
1850 it is precious close to seventy years old and
ought to have been buried some time ago. Every
few months the newspapers and periodicals expose
some sort of bunko game. The courts are continually
sending our fellows to jail. The people are much
better educated than they used to be and there are
practically no rubes left. But the confidence game
is greater than ever and vastly more prosperous than
its early disciples ever dreamed it could be.
W. A. Pinkerton was quoted some time ago as esti-
mating the annual takings of con men at $10,000,000.
He must have been using con in its very narrowest
sense. All the old estimates placed the figure between
$25,000,000 and $50,000,000 with the leaning toward
the •greater .amount. This was supposed, in the days
before the war, to include the peculations of stock
swindlers, promotion schemes, crooked brokers and
all their crew. To-day such figures are entirely inade-
quate, as will appear. At the moment it is impossible
to calculate with any accuracy what total the year’s
swindlings will arrive at, but all estimates place it
in the hundreds of millions, probably in the billions.
It may seem puzzling, all this enormous expansion
in eon in spite of the attacks made on the swindler
from every side. But to me the reasons for it are
good and clear. Confidence is a business, and, like
all business, changes and conforms to conditions. In
fact, con takes rise from the conditions of life about
it and adapts itself as does social life. And con plays
an invariable chord in the human make-up—good old10 Confessions of a Confidence Man
earthy greed. But this greed must be played upon
according to the times and circumstances. Few are
swindled with gold bricks nowadays, for there is no
gold fever, but many are mulcted by means of fake
stocks.
There are other reasons why con is perennial. It
has taken advantage from the beginning of the public
foibles, of what is now termed mass psychology. Our
people know that the great American fortunes were
made, either from the natural resources of the coun-
try—mines, oil, timber and land—or from spectacular
inventions, or from fortunate speculation. Rocke-
feller is the man who stands for the first type, Henry
Ford for the second, and J. P. Morgan for the third.
That is the way the popular mind sees these things.
It remembers the few successes and forgets the many
failures.
So the con man bases all his schemes on these three
great wealth producers. Almost without exception
he offers his victims a chance to get rich through
mines and oil wells, through some wonderful mecha-
nism' or patent or through speculation. No wonder
con grows constantly greater.
In the old days of plain bunko steering, which I
think ended back in the 1890’s, the average haul from
a victim was a few hundred dollars. When the
famous Hungry Joe Lewis cultivated Oscar Wilde on
his American tour and got a five-thousand-dollar check
from the poet it was considered a remarkable coup
and two countries were struck with mirth and won-
derment, even though Wilde saw through the scheme
in time to stop payment of the check. But nowadays
a first-class confidence operator would spurn a scheme11
The Age of Con
that promised only five thousand dollars. That is
almost the irreducible minimum and most swindles
of these times are aimed at pots from five to fifty
times as great.
One other change has come over the confidence
man. Once he tackled only the rustic, the simpleton,
the suburban merchant, the stranger in town. Now
he pays little attention to this class. To-day your
swindler goes after the most experienced and most
cynical. The banker and man of moneyed affairs has
recently become a favorite mark of the most expert
confidence man for reasons which will shortly appear.
So I may as well begin by exposing a series of schemes
aimed exclusively at banks and bankers. I guarantee
that all these devices have been successfully demon-
strated by myself and others and that they are being
worked at this very hour. At least two of these tricks
originated with me, though I wish now I had been
better employed.
It must be borne in mind that these devices repre-
sent the refinement of the swindler’s art, for he is
dealing now with men used to finance, trained to
investigate, practiced in caution. That I and other
men have been able to victimize the occasional banker
hardly reflects on the astuteness of bankers in general.
There are bankers and bankers, and the swindler natu-
rally uses discretion in selecting his quarry. There
can be no doubt that the average banker is pretty well
informed in the matter of swindles and not to be
taken in. But there are men in the profession who
are not too well up on the most modern expressions
of the subtle con game.
Any time you feel in the mood to buy shares in12 Confessions of a Confidence Man
banks and so become a banker I can tell you bow to
begin, ; In many cities are brokerage bouses which
regularly hold auction sales of assorted blocks of
bank stocks. To these concerns consignments of bank
stocks are sent by estates and individuals with instruc-
tions to sell to the highest bidder. Men who buy such
securities are always conservative. They calculate the
earning power of the stock and fix their top bid before
they go to the auctions. Thus by bidding a fraction
of ’a point over the top anyone can get bank shares.
Naturally a schemer can always afford to pay more for
any article than a legitimate investor.
These auction sales of bank stocks had been inter-
esting me for some time, when a number of years
ago I found a way to make use of them. Another
broker and I were out of operation at the time and
looking for a scheme. I explained my idea to my
friend and we promptly pooled some resources and
bought forty-five shares of the stock of a prosperous
bank in a Central Illinois city. We paid, as I now
recall it, $122 a share. I then boarded a train and
went to Illinois. As soon as I reached the town I
made some inquiries to find out who was the attorney
representing the bank in which I was now a stock-
holder. Having discovered the name and business
address of this person, I went at once to the bank
and approached the cashier.
“I’ve just bought some shares in your bank,” said
I. * ‘ How soon can I have them transferred ? ’ j
The cashier was very polite and genial. It would
take a few days to make the proper transfer on the
books and issue a fresh certificate. Would I have it
sent or would I call?13
_
The Age of Con
“I’ll be back next Monday if that will give you
time,” I told him, and we fell to talking.
“Did you buy this stock for investment or specu-
lation?” he wanted to know.
“Oh, I buy anything,” I answered. “I considered
this a good buy when I made it, but I’m always ready
to take a profit.”
My man grew pardonably enthusiastic. The price
of $122 a share was very low. It wa9, in fact—as
such prices always are—considerably below the book
value. My banker, however, exalted the stock far
beyond its book face. His institution was prospering.
This year would show much greater returns than the
last. No doubt the stock was actually worth $175
and should go to $200. This ebullition of hopes I
expected and took advantage of. To make my man
stress his boasts I asked him to repeat. Then I called
for a bank report, which was given me, and I went
my way.
Now anyone who is shrewd enough can find fault
with the average bank statement. If he can discover
nothing worse he can always cry that the loans are
too heavy. As a fact, this is an evil of some fre-
quency in banking and one at which much recent
legislation has been aimed. It is called loose lending,
or spreading too thinS The point at which overlend-
ing may begin is extremely variable and opinions will
differ greatly about it in every case. Thus a crank
may object to the methods of the most conservative
bank. This was what I did in this case. It was my
first leverage.
For several days I had to lounge about the city,
seeing the sights, motoring to surrounding places or14 Confessions of a Confidence Man
gassing -with the hotel keeper. Then Monday came
and I went, for my transferred stock. It was ready
and the banker brought it to me, smiling and cordial.
I examined the new certificate carefully and put it
into my portfolio. Then I went to work.
“I am now a partner in this business, am I not?”
said L
“That’s what you are,” smiled the banker.
“Well, since that’s so, I want to call your attention
to something. In looking over this statement I find
that the loans are pretty large compared to the surplus
cash on hand.”
“Not at all, not at all!” protested the banker.
“Our loans are all very conservative. We know our
borrowers personally. All the money we have out
is practically call money. No, indeed, we consider
our lending very small in view of the conditions.”
“That may be,” I went on, “but I have had a good
deal of experience in such matters and it is this over-
lending that breaks banks. I’ve got considerable
money tied up here now and I’m naturally anxious—”
“No reason for it,” snapped the cashier.
“So I wonder if you’d mind if I were to look over
the books and examine the list of borrowers?”
I said it blandly and innocently.
The banker went through the roof, as the word
goes. No, indeed! That was the business of the board
of directors. They were all conservative and clever
business men. Look at the books? Not by a good
deal! The more he talked the angrier he got, and I
pretended to get as hot as he. Then I went out in
a huff and directly to the office of the bank’s lawyer.
Mr. Black, the attorney, was in. I told him I was15
The Age of Con
a stranger in town, having come in connection with
some stock I’d bought in the local bank.
“Now I don’t come for advice,” I told him with a
great air of determination. “I know what I want
to do. All I require is a lawyer to conduct the legal
matters for me. ’ ’
“I guess we can accommodate you, Mr. Crosby,”
he assured.
I told him that the bank had refused to allow me
to see the books or list of borrowers. I was suspicious
of the overlarge loans and wanted to get a court order
forcing the bank to give me access to its records.
The attorney paled just a little and fidgeted. “You
intend going to court and asking for such an order ? ’ ’
he asked, almost incredulous.
“That’s exactly what I’m going to do,” I said,
closing my jaw and looking angry.
He was silent for some time, pondering this di-
lemma. He saw from my attitude that it was useless
to try to dissuade me. Finally he said: “I’m sorry,
Mr. Crosby, but I can’t represent you in this. I am
the attorney for the bank.”
I expressed great surprise and regret, got up and
went my way as gracefully as possible. When I got
down on the walk I began to chuckle, for I knew
what was happening at that moment. I hadn’t left
the lawyer’s floor before he was at the telephone
calling the bank. The cashier assured him that I
was a stockholder and that he didn’t know what had
got into me. I must be mad, asking to see the books.
“Do you know what he’s going to do?” asked the
lawyer. “He’s going to court for an order to see
the books.”16 Confessions of a Confidence Man
“What?”
“Do you know, what that means?”
“Good Lord! What’s wrong with the fellow?”
‘ ‘ It means a run on the bank the moment the news
gets out, whether he gets the order or not. ’ ’
I can see the poor bank cashier trembling and stut-
tering.
‘ ‘ What can we do ?” he demanded.
“Get hold of Crosby,” said the lawyer, “and stop
him at any price. Get his stock away from him if
you have to.”
And they did. I soon received a summons to the
bank, where I found the officers angry but frightened.
They didn’t dare let me see the books, because to do
so would be to establish a very dangerous precedent.
Besides, they now had reason to doubt my good faith
and could not risk letting me have access to such
information as their books might have given me. No
matter how faultless their business conduct, I had
them in a hard knot. I had to be bought out and
got rid of. They made me an offer and I laughed
at them. Hadn’t the cashier told me three days before
that the stock was worth $175 or $200? Well, if it
was worth that then it was worth it now. There was
much argument and passing of hot words, but I got
$50 a share profit on my stock, forty-five shares of it.
When I got back to New York I found that my
partner had done almost as well. He had bought
thirty-two shares in a small Ohio state bank and
forced the bankers to buy it from him at an advance
of $55 a share. We now set out and began working
this scheme steadily. For some months it went along
smoothly and profitably. Then I was lured away to
17
The Age of Con
something still more lucrative, but my partner con-
tinued in the game with various assistants, and these
men are still holding up banks by this simple and
effective means.
Here the secret of success is that no bank wants to
have such an action brought against it as we invariably
threatened. No matter how high its standing, a run
will result, and runs are always troublesome and
occasionally disastrous. The bank depends on the
confidence of the community and will protect this
confidence at any price. So I have often referred
to this scheme as con versus confidence.
It may be as well to notice right here that this game
of bank-stock selling is not properly a con game. It
is more than anything else a gentle, but not too gentle,
form of blackmail. Its mechanics are far removed
from those of the old bunko conspiracy. In all except
that confidence men worked it, this little jewel stands
apart. But that means only that it is one of the most
recent developments. The most remarkable thing
about the scheme is that the banker is not gulled and
no confidence of his has to be won. In other words,
the banker is not victimized through the slightest
fault of his own. No amount of banking shrewdness
can prevent a crook from buying bank stock and put-
ting it to illicit uses. Thus there is only one effective
armor against the sharpers who are working this
trick—and that is being forewarned. Since I wish
to stamp out the evils I expose I desire to recommend
a remedy for this flagitious practice.
I recommend that the American Bankers’ Associa-
tion send to every banker in the country an account
of this swindle, warning him to be on the lookout■n
18 Confessions of a Confidence Man
for the stranger who suddenly turns up with a pur-
chase of bank stock." As soon as such a person appears
the approached banker should immediately make in-
quiries of the Post Office Department, the detective
bureau and reliable rating and investigating houses
in the city where the stock was purchased. The bank
may legitimately refuse to transfer the stock until
such an investigation can be made. The banker need
merely say to his new stockholder that many black-
mailing swindles have been perpetrated in the manner
I describe and that the bank has the right to protect
itself. If this is done the schemers will invariably,
I think, take to flight. Generally men who work at
such devices have criminal records. They will take
no chances with a man who says he is about to inves-
tigate. This is the cure for bank-stock hold-ups.CHAPTER II.
TRIMMING THE FINANCIER.
iHAVE said that the banker is now a favorite
mark of the cleverest confidence men of this day,
and I cited the foregoing experience, first, because
it reveals clearly one of the conditions of banking
which draw the swindler to the banker. Banking is
based on public confidence and this faith of his people
the banker must attract, sustain and protect always.
But this necessity is but one of several characteristics
of the banking business and the banker himself which
make him prone to the attacks of the con man.
If the banker must keep the faith and respect of
his clients and the public at large at all costs, the
criminal translates this fact into immunity. The
banker will not holler, he says, and too often truly.
Again, the banker always has available money to
swing a deal that interests him. This is quite as
important, for the con man deals in cash only—on
the receiving end. Third, the banker has business
experience and faith in his own judgment. He is
ready to act without seeking outside advice. Rarely,
but still in instances enough, minor bankers allow
this faith in their own astuteness to run hard upon
rashness. It is these occasional men that the swindler
is always on the watch for. Finally, bankers are
everywhere available, and it is a natural thing to go
1920 Confessions of a Confidence Man
to them with business propositions. For these reasons
the eon man has lately been picking on men of finance.
On the other hand it takes a first-class operator
with a highly organized scheme to trick even the
rashest banker, who is ever cautious and very much
from Missouri. But the virtue of a truly fine con-
fidence scheme is that it can be demonstrated. It
will stand a reasonable amount of investigation and
is plotted with such care that it contains in its own
technic various elements of conviction. Against such
plots only the most astute are proof unless forewarned.
It is perfectly certain of course that the vast ma-
jority of bank men cannot be and never have been
victimized by swindlers. They are either too con-
servative, too well informed or too perspicacious. But
there are occasional dunces in banking houses and
these are the men the swindlers bleed.
I need not point out that whereas some bankers are
men of unusual talent and ability who have raised
themselves to positions in their communities, there
are men who have come to the control of money mat-
ters in their towns through inheritance or blind chance
or mere hoarding. Among these men are those to
whom I wish to address special warning. At the
same time it is only fair to say that, while bankers
have been and are being victimized through confidence
schemes, I know of no instance in which a bank has
been wrecked by such depredations and I doubt if
the depositors have ever lost a cent on this account.
There are two reasons for this: Even the rashest
banker is too cautious to risk in any one scheme a
sum large enough to ruin his bank. Again, the con-
fidence man himself does not try to take too much.Trimming the Financier
21
from a banker, for to do so would mean bank failure
and exposure. That is the last thing the swindler
wants.
I have said that only the most modern and skillful
scheme is likely to succeed against the man of finance.
Yet the rare exception to this rule springs to mind
at once. The ludicrous adventures of the notorious
Maybray gang in the Missouri Valley deserve to be
mentioned.
Maybray and his confederates, of whom more than
eighty went to prison about ten years ago, operated
various antique con games throughout the Middle
West, and for many years. The organization com-
prised hundreds of lieutenants, employees and hangers-
on. It was so large and unwieldy an affair, with so
many chances of betrayal through its numerous en-
tourage, that no careful operator would have any
connection with it. Eventually the conspirators came
to grief through a banker. The tale contains humor-
ous virtues.
A Middle-Western banker, pillar of his church and
arbiter of local social and business morals, was in
the habit of going to St. Joseph opce or twice a year
for such diversions as were taboo in his home town.
One of Maybray’s steerers roped him, captured him
and let him win some small bets on fixed horse races,
prize fights and wire-tapping games. After a time
this upright but verdant gentleman felt himself one
with the urbane conspirators. In other words, he
was fattened for the slaughter. A fixed prize fight
was now proposed in which the banker was to put
up a large sum on the obscure amateur who had been
framed to beat a well-known champion. The banker22 Confessions of a Confidence 31 an
knew that local faith in the favorite was unshakable
and that odds would be bet against his money. He
accordingly went home and returned with about forty
thousand dollars. He committed a flagrant dishon-
esty wrhen he bet on what he knew—or thought he
knew—to be a frame-up. No need to dwell on the
painful result. Something went wrong. The cham-
pion won by what looked like an accidental punch
and at that very moment there was a prearranged
raid by the police, who had been “seen.” The banker
fled to save his reputation, leaving his money in the
hands of the Maybray crowd.
But in this case something went awry. Either the
banker was in a position to indulge his revenge or he
was overpersuaded by government agents, who were
just then bending every energy to stamp out the evil
of the Maybray crowd. At all odds, the banker did
squeal, wholesale arrests followed, and wholesale con-
victions.
A good deal more modem than this ancient hurrah
was a little plan we worked on a banker in Indiana
a few years ago. This type of swindle is current
and very popular. I do not know how many bankers
in small communities have been victimized, but their
number must be considerable. Recently I was told
of a fresh instance:
I heard—through a young man who had been dis-
charged from a broker’s office and wanted to take
his revenge—of this banker and the fact that he was
taking flyers in oil stocks. I paid nothing for the
information, though it proved to be highly valuable.
The scheme which immediately came to my mind re-
quired three conspirators. I picked up my two assist-Trimming the Financier
23
ants and hurried out to Chicago, where we fitted up
and opened a brokerage office. Here the first of my
lieutenants began to deal—or pretend to deal—in the
shares of an Oil Lease Company, a decrepit concern
whose half million dollars’ worth of beautifully
printed and worthless shares I had long and vainly
been trying to foist on other brokers.
After establishing my second partner, a young
woman who should have been an actress, in a neigh-
boring small town, where she settled down and passed
herself off as a widow, I hurried to see the banker.
I found him a rosy, overfed, side-whiskered old fellow
who knew more about the quality of Volstead’s best
than about finance. What is called a cold approach
was made. By that I mean that I walked in on him
without the slightest preparation, v'hieh is contrary
to the con man’s habit. I told him that I was inter-
ested in a block of oil stock which could be bought
at fifty cents, whereas there was a market for it at
$1.10. The old man was interested enough to ask
numerous questions, but was cautious. If I was sure
of a market why did I need him at all ? Why didn’t
I buy an option on the stock and then dispose of it ?
For this I had been waiting. I explained that the
holder of the stock was no fool. If I tried to buy
an option the stockholder would immediately make
inquiries. She would learn at once that her stock
was worth $1.10 and my profit would go glimmering.
The stock must be bought outright and had in hand.
I must go to the woman with the money and push
through the deal in a hurry. This appealed to the
banker’s good sense, but he was by no means satis-
fied. For this we were of course prepared.24 Confessions of a Confidence Man
“What makes you think you can get a dollar-ten? ”
he asked.
“I know what the market is.”
“How do you know it isn’t a fake quotation?”
The old man was wise enough to understand this
patent fraud. Evidently he had been burned by that
Randle.
“I have an offer from a reliable firm,” said I.
“How reliable?”
“Known them for years.”
“That’s not good enough to get my money,” said
he.
I pretended to be puzzled and baffled. Then I asked
him what would satisfy him. He said he would have
to have some guaranty. Again I considered. Then
I proposed tentatively, as though I had my doubts
about its feasibility, a purchase and sale agreement
between us and the brokers I had mentioned, whereby
the brokers contracted to buy the stock and put up
a cash forfeit to bind the contract.
“That would satisfy me,” said the old banker, and
took me to his club for a drink of his private stock,
which I downed for policy’s sake. Drink was never
one of my failings. It mixes badly with sharp busi-
ness. As soon as I could get away I hurried off to
Chicago and pretended to negotiate the contract with
the brokers, which was not difficult inasmuch as
“they” were my first confederate in his office suite.
In a few days I summoned the banker to Chicago
for a conference. He was led into the excellently
appointed offices of my confederate and we talked
business.
Yes, the broker would buy the oil stock in any25
Trimming the Financier
amount at $1.10. How much did we have? "We had
to hedge a little here. We were not sure how much
we Could scrape up, but probably about 70,000 shares.
“Well, what do you want?” snapped the broker
abruptly.
“It’s this way,” began the banker. “Of course
your firm looks solid and responsible to me, but I
don’t know you and I can’t do business with strangers
on a chance. If you are willing to enter into a con-
tract and put up a cash forfeit we can do business.”
“How much?”
“Twenty per cent.”
‘ * Ridiculous! ’ ’
“I think not.”
“Well I do,” snapped the broker. “This firm is
just as reliable as your bank. But we want the stock,
so I’m willing to do what’s reasonable with you. You
say you can get 70,000 shares. At my price that
would amount to $77,000. Well, I’ll go half way
with you. I’ll post ten per cent—$7700—if----”
“That’s satisfactory,” the banker interrupted.
“If you’re willing to put up some sort of forfeit
on your side,” the broker finished.
There was consternation in the banker’s face. He
was once again on the defensive and highly suspicious.
This was just what I wanted, for nothing is so effec-
tive at this stage of a game as suddenly to rearouse
and as suddenly allay the suspicions of your victim.
I jumped into the breach.
“How about some of Such-and-Such oil stock?” I
suggested.
'‘Nothing better,’’ said the broker. ‘‘How much?’’
“Well,” I said, “I’ve got a thousand shares that
2G Confessions of a Confidence Man
are my personal property, but I’m willing to put
them up if that will satisfy you. We’re on the level,
and so I’m taking no chance.”
The banker’s face lighted with the immediate relief
I had been playing for. The broker grumbled some
at the small forfeit we were willing to put up against
his money, but he finally acquiesced and a regular
purcliase-and-sale agreement was drawn. The broker’s
$7700 and my thousand shares of oil stock were put
up at a large Chicago trust company and the banker
and I set out for his home town.
On the train I was jubilant, as well I might have
been. Laughingly I pointed out to my ancient part-
ner the iniquity of taking 70,000 shares of stock away
from a foolish woman, paying her $35,000 for it when
it was worth $77,000.
"Business is business,” said the banker philosophi-
cally.
The next day we called on the little widow with
the cash in hand, the banker having first given me a
demonstration in cold-blooded business that would
have curled my hair had the transaction been genuine.
When we arrived at his bank he had sat me down
in his office and calmly told me that my share of the
profit would be five per cent. I could take it or leave
it. I had protested vehemently, to carry off my part.
I wanted half the profit. He laughed at me. I came
down by degrees, but nothing could move him. At
last by threatening to go back to Chicago and draw
down my stock I had forced him to grant me ten per
cent. So my banker having hogged the deal—as he
thought—we called on the widow.
He took the whole matter into his own hands, madeTri nvmiruj the Financier
27
short work of the woman’s objections, laid down the
cash on the parlor table and fingered the bills tempt-
ingly. She acted her part well and sold the shares
after just the right amount of hesitation. That night
she disappeared from the town with the money.
We were in a position to close the matter at this
point, taking the banker’s $35,000 and leaving him
our forfeit of $7700. But the old man had played
hog and I was determined to save our money if I
could, so I began to play on his greed from a new
angle.
When we got back to his home town I managed
to extract from the old gentleman an invitation to
spend the evening with him and I used it to slip into
his mind some new wrinkles in avarice. I reminded
him that the Chicago broker had been very anxious
to get the shares at $1.10. What did that mean?
Either the company had struck oil in paying quan-
tities, in which case the stock would go much higher,
or the brokers were getting ready to bull the stock on
the market, in which case we would do better to wait
and sell at the top. When I had my man fairly sweat-
ing cupidity I came into the open and suggested that
we refuse to sell our stock.
“And lose your thousand shares?” he inquired.
“Why not, for the sake of the 7000 I own of this
block?”
This was the final blow. My willingness to lose the
forfeit utterly confounded the old man’s judgment.
He put the 70,000 shares into his vaults, allowed the
contract with the broker to lapse and thus let us take
down our money. We had made $35,000 clear out
of him. It had taken about three weeks and cost us28 Confessions of a Confidence Man
$2000 in expenses. The banker pocketed his loss with-
out a murmur.
What shall be said of so crude a fraud as this?
Certainly this banker was an exception, for I think
the average man of affairs could not have been vic-
timized, could not even have been approached with
such a scheme. But this man was really inexperienced
in spite of his years. He thought he wyas cautious
when he was merely stubborn. His greed was far
stronger than his judgment. He was a common hu-
man, but an uncommon banker type. Nevertheless,
he is by no means a solitary figure. This scheme has
been worked many many times and is as effective
to-day as ever it was. The right man for the fleecing
has to be found—and he does exist.
Means of protection against this device are so ob-
vious that I hesitate to set them down. In the first
place no conservative banker in these days has any
right to dabble in unlisted oil stocks. He probably
would not dream of using the bank’s money for such
a purpose. Why, then, his own? Again—and here
is a rule which I lay down as absolute in all cases—
it is good sense to investigate the men you deal with
as well as their proposition. If my banker had shown
the slightest disposition to inquire into me and my
confederates we must have stopped instantly and
given up the game. Why did it not occur to this
shrewd man to ask how long our Chicago broker had
been tenant in his fine offices? Why was no rating
asked on this broker? Why was I never asked for
references or credentials? All these questions and
others I might answer, but what’s the use? All I
have to say to business men is: Investigate the strangerTrimming the Financier
29
who comes to you with a proposition and investigate
him thoroughly. If he is straight he will demonstrate
it. If he is a crook he will decamp at the first sign
of inquisitiveness.
The confidence man of the better sort is not always
bent on crookedness. In his ranging and wandering
he often comes by chance upon excellent opportunities
at legitimate business, but nothing is easier than to
convert a straight enterprise, once under way, into a
fraud. The temptation always rises in any venture
and the conspirator always falls. This happened to
me many times, as in the ensuing instance.
A partner and I were doing a general brokerage
business in New York within recent years when I
came upon a town where there was an excellent open-
ing for a trust company. We went there and organ-
ized the concern on a commission basis. The existing
bank in the town fought the scheme hard, but ineffec-
tively, and thereby taught us a lesson that was shortly
to result in an elaborate and successful swindle.
After this enterprise we continued on the lookout
for towns where trust companies might be organized
and soon found one. I set out at once for this place,
but did not immediately disclose my plan to the citi-
zens. Instead I investigated minutely the affairs of
the two existing banks in the city and possessed my-
self of a list of the stockholders and the amounts of
their holdings. This done, I went quietly to an obscure
shareholder and bought of him fifteen shares of the
stock in the stronger of the local banks. I asked him
to say nothing of the deal for the present and did
not then have the stock transferred to my name. In-
stead I launched my scheme.'30 Confessions of a Confidence Man
I first organized a committee of prominent citizens
who were not interested in either of the existing finan-
cial houses and proposed to them the incorporation
of a title and trust company by popular subscription.
The capital stock was to be $250,000 and my firm was
to receive five per cent of the total amount subscribed
when all shares had been sold. All money collected
was to be made payable to a great New York bank as
trustee and we were to handle no money. This gave
the scheme the air of absolute honesty—and honest
it was in so far as the people of the town were
concerned.
The virtues of our plan as outlined to the committee
and the public were numerous. Not more than ten
shares could be held by any single individual. In
this wray the new bank would have a numerous stock-
holder list and assure for itself from the outset the
deposits of these many interested persons. The de-
positors would share in the profits and would work
automatically to bring other depositors to the new
concern. It would be a cooperative affair. Everyone
felt its success assured.
The committee formed, I began to sell the stock,
opening an office in a ground-floor store in the town’s
main street. I worked quietly for a few d&ys and
got in several thousand dollars in subscriptions. Then
I began to advertise in the papers and make a great
hurrah. The opposing banks were on my neck in an
instant. It is not unusual for newspapers in smaller
cities to be indebted to the banks to the limit of their
borrowing power, and the two weeklies were bank
controlled and I had known this from the start. But
the single daily had some independence. The estab-Trimming' the Financier
31
lished banks now began to attack me savagely through
the two weeklies.
“Trust it not!” they screamed in black headlines,
making a bad pun on the trust company.
“Why summon New York sharpers to organize a
bank in this city?” demanded another lampoon.
And the papers were full of denunciation of the
scheme, asserting that the town had capital and enter-
prise and business ability enough to run its own affairs
without summoning assistance from Wall Street.
I immediately bought the back page of the daily
paper for a fortnight and answered the arguments
of the local banks. I pointed out to the working people
of the city, which was a thriving manufacturing town,
that they were taking their wages from their em-
ployers on Saturday night and handing their surplus
back on Monday to these same employers in the shape
of their bank deposits, for the manufacturers owned
the banks. I asked the working people if this wasn’t
tantamount to working for food and clothing. The
banker-manufacturers did not relish it a bit. The
fight got hotter and hotter. I sold more and more
shares in my trust company. Two weeks passed.
Now I felt it was time to strike.
One fine morning just as the officers were arriving
at their desks I walked into the biggest bank and into
the office. The bankers were surprised to see their
enemy, to be sure. They were vastly more conster-
nated when I laid down my certificate for fifteen
shares of their stock and asked that it be immediately
transferred to my name. I have seen some badly
flabbergasted people in my busy life, but none to com-
pare to these banking gentlemen. They knew what32 Confessions of a Confidence Man
they had said about me, the insults they had flung
and the insinuations they had made—and they were
not fools. They saw in an instant that I had them
foul. With those fifteen shares of stock in my hands
I could demand to see their books. If they refused to
transfer the stock I had only to announce the fact in
the daily paper, whose back page I had optioned for
some time to come. If they refused to show me their
books I could announce that fact, or I could apply
to a court for an order and thus precipitate a run.
If they were nice and let me see the books I would
be certain to find discrepancies—real or fancied—to
exploit in my newspaper page. It was a bad situation
and my banking friendjtiknew it.
That very morning there was a hurried running
together of the directors of both local banks. An
anxious conference was held—to which I was politely
summoned before noon. When lunch time was at
hand I had been bought out by the local bankers,
bought out completely. They took my fifteen shares
of stock at a handsome profit and they paid me in
cash the five per cent which I had planned to make
from the organization of my trust company—a matter
of twelve thousand five hundred dollars. They con-
tracted to undertake themselves the promotion of my
company and asked me to leave for parts unknown
with all due haste. I went! The bankers built up
the trust company by popular subscription, in part
at least. Somewhat later a fine building went up in
the center of the town to house my creation and it is
there still, doing a very nice business.
My partner and I continued in this game for some
time. In nearly every instance the local banks bought33
Trimming the Financier
us out before we got well started with our company.
We always incorporated for a large initial capital, so
that our five per cent might come to a respectable
figure. Usually we were conveniently relieved of
our task at the end of two or three weeks. If not we
went on with our stock selling and started the new
bank in motion. This sometimes took as long as ten
or twelve weeks, but in the end the profit was the
same. Heads we won, tails they lost. A quarrel with
my partner finally caused the collapse of this fine
conspiracy, but I understand that other men are now
plying this almost impeccable trick.
Here again it is no fault of the banker that he is
bled. He is in no sense deceived or misled. He simply
comes up against a piece of sharp business and has
to deliver or allow a competitor to spring up at his
side. Nevertheless, with the information I hereby put
into the hands of the banking interests it will not be
difficult hereafter to defeat most of such machinations.
If the bankers in this town had wired to New York
and asked the post-office inspectors, the commercial
rating houses and the confidential investigators, who
are in constant touch with men and affairs in Wall
Street, they would have come upon information
against me sufficient to defeat my scheme.
I had not at that time been convicted of any crime,
but both my partner and I had been in many shady
and even criminal transactions which had not been
brought home to us. Of many of these things the
agencies I mention were thoroughly aware. If my
local bankers had taken the trouble to get this infor-
mation and to publish it or merely to confront me
with it I would have been forced to clear out. Instead34 Confessions of a Confidence Man
they contented themselves with hurling vague and
unsupported insinuations, which did not terrify me
at all. Hereafter legitimate business will know how
to defend itself against this form of mulcting.CHAPTER ITT.
THE TALKING TYPEWRITER.
T* E come now to what I consider a high de-
velopment—a perfect flower—of my con
creations. Like the foregoing schemes it is
aimed at that small body of inexperienced bankers
who are the con man’s meat and drink, and how well
aimed you shall judge. Before I begin to recount this
adventure I must call attention to the elements which
constitute the full-blown technic of confidence gam-
ing, otherwise you may not appreciate this trick.
There are six definite steps or stages of growth in
every finely balanced and well-conceived confidence
game. One follows the other with absolute precision.
ItS some games one or more of these scenes or acts, to
use a theatrical comparison, may be dropped out, but
where that happens the game is not a model one. The
reference to the stage is apt, for the fine con game
has its introduction, development, climax, denoue-
ment and close, just like any good play. And this
is not the only analogy to the drama, for the scenes
are often as carefully set; the background is always
a vital factor. In the colorful and mirthful language
of the bunko man, all these parts of the game have
their special names. I give them with their defini-
tions:
Foundation Work: The preparations which are
3536 Confessions of a Confidence Man
made before the scheme is put in motion, including
the elaboration of the plan, the employment of as-
sistants and so forth.
Approach: The manner of getting in touch with
the victim—often most elaborately and carefully pre-
pared.
Build-up : Bousing and sustaining the interest of
the victim, introducing the scheme to him, rousing
his greed, showing him the chance of profit and filling
him so full of anticipation and cupidity that his judg-
ment is warped and his caution thrown away.
Pay-off or Conyincer :	An actual or apparent
paying of money by the conspirators to convince the
victim and settle doubts by a cash demonstration. In
the old banco game the initial small bets which the
victim was allowed to win were the pay-off. In stock
swindles the fake dividends sent to stockholders to
encourage larger investments are the pay-off.
The Hurrah : This is like the dénouement in a play
and no con scheme is complete without it. It is a
sudden crisis or unexpected development by which
the sucker is pushed over the last doubt or obstacle
and forced to act. Once the hurrah is sprung the
victim is clay in the schemer’s hands or there is no
game.
The In-and-in: This is the point in a con game
where the conspirator puts some of his money into
the deal with that of the victim; first, to remove the
last doubt that may tarry in the gull’s mind, and,
second, to put the con man in control of the situation
after the deal is completed, thus forestalling a squeal.
Often the whole game is built up round this feature
and just as often it does not figure at all.37
The Talking Typewriter
In addition, some games require what is called
“corroboration,” which means what it says. This is
important in games where a banker or other shrewd
customer is to be the victim.
And now to my story, which illustrates this whole
elaborate mechanism:
As an electrical and mechanical engineer I have
always been deeply interested in inventions and this
bent has swallowed up much of the money I have taken
from the unfortunates who were foolish enough to
enter into my schemes. But inventions have also
made me much evil profit, as we shall see. Some years
ago I made exhaustive and vain experiments with an
automatic typewriter—a mechanism to be guided by
the voice, which was to do away with both the sten-
ographer and the dictating machine. My invention
was a failure, but I have no doubt someone will
one day solve this problem, perhaps on a principle
different from mine, for the idea is a sound one
mechanically.
I did not contrive an automatic typewriter, but I
made some people believe I had-~to their sorrow. My
apparatus was a cabinet equipped at the top with a
number of microphones, which were to receive the
sound of the operator’s voice. Beneath on a project-
ing shelf was a regular typewriter of standard make,
and over each of its keys was a round selenoid magnet
with a central core or armature. According to theory,
at least, when these magnets were energized by the
voice the armature pressed down on the keys in their
proper sequence and caused the dictated letter to be
written. The inside of the cabinet was supposed to
contain the mysterious mechanism which strained the38 Confessions of a Confidence Man
voice and put the pressure on the proper keys in turn.
In reality it contained a device of another sort, though
hardly less ingenious.
The operator sat down before this cabinet and slowly
dictated a letter, which the machine faithfully wrote
out—faultlessly and swiftly. I explained to my vic-
tims that sound waves controlled the electrical ener-
gies which were arranged automatically to operate the
typewriter. In reality the microphone conveyed the
dictated letter into an adjoining room, where an expert
stenographer took the dictation directly upon another
typewriter. This was hitched by electrical means to
the typewriter at which the victim was sitting, so that
when my stenographer in the next room pressed a key
the corresponding key on the automatic typewriter
was depressed and caused to write. An elaborate and
wonderful deception to begin with, if I must say so
myself.
The commercial possibilities of such a contrivance
were apparent to the most stupid. And when you sat
before the cabinet there was no way to tell that the
machine was not actually responding to your voice.
The physical demonstration was absolute.
Now the old-fashioned con man of one type would
have incorporated for a couple of millions and tried
to vend his worthless stock to the general public.
Another type would have gone to some city and vic-
timized the professional men and small business people.
I chose a more dignified if more difficult route. I
went after bankers.
Two confederates and I set out one early autumn
for the Virginia city whose possibilities we had pre-
viously examined. It was a manufacturing and min-The Talking Typewriter	39
ing center of some size and we had located a fair-sized
unused factory, which we rented. Here we made
the necessary alterations and set up our typewriter.
Then I summoned from New York my expert stenog-
rapher, a young woman who was long associated with
me in. various deals. One of my confederates was
now sent to the principal local bank with twenty-five
thousand dollars in cash, which he deposited to the
credit of our new manufacturing firm. In order to
do this he had to interview the cashier, who was natu-
rally curious. Our man explained that we had come
to the town to manufacture our wonderful automatic
typewriter. We represented men with large means
in the North. We would require and ask no credits
of any kind, since the backing w7as more than ample.
We made the deposit in order to pay for materials
and to foot the expenses of the factory, and we pur-
posed keeping our balance up to a good figure.
The bank cashier did not know whether to be more
pleased or inquisitive. On our man’s next visit he
again engaged the cashier in friendly talk. The banker
was more curious than ever. He hinted round until
he was most cordially invited to the factory to see
a demonstration of the wonderful machine. Of course
anything he might see of the manufacturing process
was to be kept confidential.
The banker put on his coat without delay and was
driven out to the factory. He was taken directly to
the cabinet and instructed in the operation of the
device. He sat down, put in a sheet of paper, cleared
his throat and began to dictate. The machine followed
him rapidly and accurately, turning out a perfect
letter. He stared and rubbed his brow. We were40 Confessions of a Confidence Man
volubly explaining the alleged mechanical and elec-
trical principles at work.
The poor banker stared even harder. He tried a
second letter and a third. He was like a child with
a toy. "VVe let him play to his heart’s content, sup-
plied him with cigars, told him the sad story of the
untimely death of the inventor of this marvelous
machine and sent him back to his bank in our motor
car. I feel sure he came very near asking about stock
in the concern, but he decided from our attitude that
he would be wasting his breath—and so he would
have been. He was not our intended victim.
All we had done to this point comes under the head
of foundation work. Now for the build-up.
The banker in this larger city having been thus
thoroughly prepared and filled with confidence in us,
I departed at once for a smaller city about twenty
miles distant, where I planned to make my coup.
After establishing myself I went to the local bank
and opened an account with a deposit of $1000. In
answer to the usual inquiries of the banker I explained
that I was in the town to do a little business. I was,
in fact, quietly buying some shares in a company out
of which I hoped to realize a nice profit. To avoid all
suspicion I explained that the shares would come
with a draft attached, but that I did not want him
to assume any responsibility in the affair, even in
the matter of taking up the draft.
“I will drop in personally to see that the stock is
0. K. and I’ll pay the draft,” said I.
“Perfectly satisfactory,” chuckled the banker, who
was already betraying his interest.
This visit constituted the approach.The Talking Typewriter	41
In a few days came a certificate calling for shares
in the Automatic Typewriter Company with a draft
for eight hundred dollars attached. I paid it out of
my deposit of one thousand dollars. Immediately I
sent the shares to the company through the bank in
the larger city with a draft for fifteen hundred dollars
attached. This draft was immediately paid out of
the twenty-five thousand dollars we had on deposit
with the larger banker.
Now followed a series of similar transactions in
varying amounts. My one thousand dollar deposit
grew in two weeks to be more than five thousand dol-
lars. My small-town banker was in a sweat of interest
and avarice. He began to ask me questions and became
more minutely inquisitive every time he saw me. Thus
little by little, without any definite steering from me,
he was made ready for plucking. This part of the
operation contains both the build-up and the pay-off,
if you will observe.
Now my small-town banker was quite convinced that
this business was straight. He had seen a demonstra-
tion of it through his own bank. But he was cautious,
as I had expected. To make sure, he made a trip to
the larger city and called on our banker there. This
man was, by virtue of our excellent preparation, full
of our praises. We seemed to be an exceptional con-
cern, he said. We had opened an account with twenty-
five thousand dollars and kept a large balance. We
had asked no credits of any sort and appeared to be
amply backed, and he had been out to see the inven-
tion himself. Of that he could speak definitely. It
was a wonderful thing. My small-town financier went42 Confessions of a Confidence Man
home in no pretty mood. He was out for a share of
the cream.
Naturally I had taken the trouble to observe the
movements of my banking friend. As soon as I knew
he had been to see his brother banker I remained away
from his place for a few days and then dropped in
on him after banking hours one afternoon. He was
glad to see me and careful to conceal it. After some
preliminaries I told him that I had a chance to make
sixty thousand dollars or better and wanted his assist-
ance. I wanted no money of him, but only the use
of his prestige as a banker and I was willing to pay
handsomely for its use. The widow of the inventor
of the wonderful automatic typewriter, in whose stock
he had seen me make some profitable deals, had a big
block of the shares and did not know of the recent
developments. I felt sure we could get her stock for
about forty thousand dollars and sell it to the com-
pany for one hundred thousand dollars. The backers
were trying to buy up all the outstanding stock. They
would be certain to approach the widow shortly, but
I meant to forestall them to my profit and her loss.
“And how do I figure in this?” he asked.
“I want you to go with me and help me influence
the widow to let us have the stock. You can get her
to send it here with a draft attached. Then we can
sell it immediately and pay her. It will take no
money, only the use of your name and your aid—
and I’ll pay you ten per cent of my profit for your
trouble. ’ ’
Here was $6000 to be made without the risk of a
penny. The banker agreed to aid me.
The visit to the larger banker was the corroboration43
The Talking Typewriter
step in this scheme and these latter negotiations com-
pleted the build-up, or nearly completed it. That
night I took my banker into an automobile, drove him
to the factory of the Automatic Typewriter Company,
where I had the stage set for him, and gave him a
demonstration of the machine. This was done clan-
destinely, or so he was made to believe. The marvels
of the machine did their work impressively. We were
ready for the hurrah.
Next day my banker and I called on the widow of
the unhappy inventor. That girl could run a type-
writer and act a part equally well. She received the
banker with grace and reserve, listened to his propo-
sition and raised some slight objections, which he
smoothed away. She could trust him, he assured her.
He was a banker and certain to keep his word. Would
she not send the stock to his bank with a draft at-
tached? He would remit forty thousand dollars or
return the stock within three days.
“I see no objection to that,” said the little wridow
at last. “But I’m really no hand at business. I’ll
have to consult my lawyer first.”
The hurrah!
I got the banker out of that house in less time than
it takes to say it. On the walk I turned to him
excitedly.
“Do you know what that means?” I cried. “If she
sees that lawyer it’s all off.”
“What’ll we do?” he asked helplessly.
“We must act in a hurry,” said I, pretending to
think rapidly.
Suddenly I seized him by the arm and dragged him
to our car.44 Confessions of a Confidence Man
“There’s only one way,” I shouted into his ear
as we drove off. “You rush back to the bank and
get the money. Take my five thousand and get thirty-
five thousand of your own. I’ll give you half the
profit. It’s our only hope.”
We broke all speed laws along the road to his little
town. He went to his bank on the run and came back
in a little while with the money. By two o’clock in
the afternoon we were at the widow’s home and were
again received.
She had not yet seen her lawyer. A sigh of relief
went up from both of us. The banker displayed the
cash and renewed his persuasions. Keal money the
widow could not resist. She brought out her stock
certificates, which we examined minutely and found
correct. Then we handed over the forty thousand
dollars in bank notes and went away jubilant.
Please observe now that I had worked the in-and-in
on my victim at the last moment, when I put my five
thousand dollars in with his money to pay for the
stock. We were now joint and equal owners of these
shares and—as my partner believed—stood to profit
thirty thousand dollars each on the deal. But here
the purpose of my in-and-in and the rub of the whole
matter developed. My banker could not sell the stock
without my consent and I temporized, pleading that
there was no hurry. This gave the little widow time
to get back to New York. It also gave the factory
opportunity to vanish in the night—I mean the con-
tents of the factory. This done, I made a pretext of
going to the big town to arrange for the sale of our
stock, but I did not stop there—and I have never
been back.45
The Talking Typewriter
No complaint was heard from this banker and we
went on our culpable way with this marvelous wealth-
producing device. My arrest, in fact, interrupted a
later setting out on renewed adventures with the
automatic typewriter.
A word to bankers in parting before I pass on to
the frauds that are perpetrated on the humbler mem-
bers of our society: I need not repeat the apparent
fact that the first hint of an investigation outside the
lines carefully prepared by ourselves would have sent
us scurrying to cover. If my banker had shown the
slightest tendency to find out who were the alleged
men of wealth who stood behind us, we should have
dropped him as a bad prospect. But he did not and
there lies the sink into which so many excellent and
intelligent people fall. The person you are doing
business with is all important, his project secondary.
If your man is above cavil his scheme is likely to be.
If your man is a crook his project may be thrice won-
derful and by that sign thrice perilous. Cherchez
I’Jiomme, my friends. Look up the man. And you
will keep in hand much good and highly useful money.CHAPTER IV.
SCHEMES FOE BUSINESS MEN.
“ OLONEL NOVENA was, of all the rogues and
scoundrels I have encountered in my profes-
sional life, the confidence man par excellence,
as the French would say; not by the excellence of his
high character, to be sure, or his moral worth, but by
his artistic superiority.”
It is possible that the reader of my retrospect will
never have heard of Colonel Novena. To tell the
truth, I myself had not met his prayerful name until
some weeks ago when I set out to trace American
confidence gaming to its bed of birth. My notion is
that there wras no such thing as confidence, properly
speaking, before about 1855, all of which I have said
before. And it is in the newspapers of the years
just following this date that I found the eminent
colonel. His true name seems to have been merely
Julian Cinquez and his port of embarkation Havana.
In this country for a period of ten years he celebrated
himself as Colonel Novena, General Alverosa, Count
Antonelli, Sir Richard Murray and under various
more modest aliases, used as fancy or occasion directed.
In the days just after the Civil War this nec-romancer
was a scandal in our metropolitan press, a wonder of
ninety times nine days.
That is, however, not the sole reason for recalling
4748 Confessions of a Confidence Man
him from the shades. Colonel Novena has a proper
and inherent right to be resurrected here, for he was
not only one of the first American con masters, but
he was the father of a school of bunko which has by
this far-advanced day come to a florescence past all
his creative dreams. His art has lived after him and
reproduced strange fruitage on its stem. Colonel
Novena lives still, through a numerous spiritual pro-
geny, and he lives with a baleful luster and evil vitality
beyond all he can have foreseen.
The estimate of his worth wherewith I introduce
this significant figure to your notice is that of a
contemporary. I find it in a curious and uncommon
volume, Detectives of Europe and America; or, Life
in the Secret Service. A Selection of Celebrated Cases,
Etc., Etc., by George S. McWatters, late member of
the American Secret Service. The work was published
in Hartford, Connecticut, in 1877, when McWatters
had retired after long police duty in New York and
sat him down to write a book. McWatters further
embalms the blithe Novena in this fashion:
“Colonel Novena was no small man in his way.
He was a handsome man, too, possessing a finely
shaped face, with large, dark, not quite black, eyes
and eyelashes, such as would rouse the enthusiasm of
the master painters and which gave to those eyes that
sweet alluring expression so irresistible to women; or
when reflecting the light of anger from them added
a twofold horror to their expression, enough to make
the strongest man quail, for the man seemed then a
very demon. The colonel was about five feet ten inches
in height, elegantly proportioned, his form being per-
haps as nearly perfect in every respect as any man49
Schemes for Business Men
on this wide globe could boast of. Grace, dignity
and strength combined in it, and when at all roused
Colonel Novena was as lithe and flexible as a cat, or
better perhaps, a tiger.”
We read also that this marvelous fellow “could
imitate anything from the grimace of a pretty sim-
pering girl to the Falstaffian stolidity of a Dutch
judge, and was one of the most excellent story tellers
in consequence.” He dressed faultlessly and never
never overdressed. He played the part of the literary
savant to perfection. The ladies doted on him and the
men—which was regrettable—lent him money.
So much for the personality of this capital villain
as it struck one of the foremost police officers of the
day. It reads a little moviesque no doubt, but who
would strip either the past or the movies of extrava-
gance ?
Novena, or Cinquez, appears to have trod our shores
first in 1859. Society opened its doors; Fifth Avenue
took down blinds and barriers; and he managed to
insinuate himself within the White House, which must
have been a bit more democratically run in those days.
We discover, not without amazement and amusement,
that this scoundrel got letters from President Buch-
anan, General Fremont, Chief Justice Taney, Andrew
Johnson, Mr. Seward and others almost as notable.
With such credentials he hardly needed to win the
confidence of men and women of money and position.
Imagine if you can how the provincial society of
the bloody sixties fell prostrate before this paragon.
Novena, the practical soul, never failed to make prag-
matic applications of this adulation. At first he merely
borrowed large sums of money “until I can draw50 Confessions of a Confidence Man
upon New York,” or “till my manager in Havana
can forward my dividends.” But loans make both
the lender and the borrower shy. The cream was soon
off this milk and Novena turned to other pastures.
He now went from city to city, plying a certain type
of con game for the first time so far as I can deter-
mine. In each city Novena played the social game till
he was established. Then he bought or optioned eight
or ten lots on both faces of a prominent but not too
developed corner and announced that he would shortly
erect on part of this site the great Novena building.
Architects’ drawings were soon in evidence. They
showed a building such as the town had never imag-
ined, designed to cover the three corner lots. Natu-
rally it was wondered what Novena wanted with the
remaining ground. He worked up local enthusiasm
with great skill, shortly sold his lots, often including
those reserved for the building, pocketing a big profit.
Land values all about the projected Novena structure
had been run up by his manipulations. The money
in his jeans, Novena disappeared, leaving the city his
magnificent plans. This was only one of his schemes,
but it is representative of all.
"When this fellow borrowed money of social acquaint-
ances and failed to pay he was no more than an
adventurer, one of the type whose doings fill the
records of every time and country. But when Novena
turned from this antique deceit to business schemes
he made the transition from adventuring to confidence
gaming. He became the innovator, the maker of
criminal history. Not that he was the first con man.
No such basic claims are made for him. Others were
conning in his day or slightly before. But Novena51
Schemes for Business Men
was the first in a particular field. He was the origi-
nator of the con game as adapted to the man of
business, the merchant, the manufacturer, the money-
maker generally. He is thus the progenitor of a
whole line of the most distinguished rogues. He is
father to the perennial Wallingford.
These descendants of the lustrous Cuban of old
times I have marked out for special attention. They
are not unrelated to the con man who aims at bankers
—a being whom I described in an earlier article. I
need not explain, I suppose, that the banking point
of view is not far different from the business prospect.
Naturally, then, the con man who attacks business
people will not differ vastly from the enemy of bank-
ers. The schemes he is likely to exploit will on the
other hand be quite disparate. They will lack some
of the refinements of the game leveled at the banker,
but they will be found to make up for this loss in
color and flavor of a sort that would at once jar on
the sensitive business eye and palate of the* financier.
As for the personal origins of the con men who
attack the man of business much might be recounted.
But to sum up the general truth, I believe it is cor-
rect to say that most of the bunko fellows who work
in this field were themselves business men before the
shadow of the illicit fell over them. This, I believe,
is the fact in the cases of nearly all high-class opera-
tors in bad business. The legitimate man of business
is the logical prey of the business man gone wrong.
His is a game with which such a sharper is intimately
familiar. To do the respectable commercial gentleman
is simply to carry superior shrewdness past the boun-
daries of legality.52 Confessions of a Confidence Man
There is a popular notion, I realize, that criminals
are born, or at least that a criminal is one thing and
an honest man another—separate, without contact,
aloofly unrelated. Happily or otherwise, this is un-
true. Most of the higher-type sharpers I know were
once in legitimate business. Misfortune or temptation
or necessity drove them astray some little step, some
slight distance. But once off the straight road these
men found it too hard to get back and too easy to go
on. "With time and progress they all graduated into
unblushing crime. Please remember, I am speaking
here of the higher-class men only. Of the common
fellows of bunko I shall have something to say when
I reach them. But all, high or low, became criminals;
they were not so ordained.
“There, but for the grace of God, goes John Brad-
ford,” said the pious man as he stood in a dirty
London gutter and saw a felon being dragged to the
gibbet. And strangely enough Bradford himself was
later burned at the stake as a criminal heretic.
Just how the descent from honesty to roguery was
made by all of the many men who have changed the
“roses and raptures of virtue for the lilies and lan-
guors of vice” would be a most intriguing inquiry,
which would be foreign to the present design. Evi-
dently, however, it is not a difficult metempsychosis.
Many have traversed this rough road.
And while we are on the subject of changing coats
from fair to foul it is just as well to remember that
the morals of business have undergone a great change
within the generation. I cannot say that they have
improved in every direction, but in general it is true
that such practices as were legitimate with businessScheines for Business Men
53
men of even twenty years ago are now either forbidden
by custom or actually criminal. Most men changed
with the changing order. But some found themselves
unable to follow their times and they soon found them-
selves bankrupts, shady fellows or the inmates of jails.
I think of a luminous illustration.
About 1894, when I was building machinery in Phil-
adelphia, a man came to me from a neighboring town
and asked whether I could construct a machine to make
coffee beans out of a flour paste. I built parts of his
device, which molded and baked fake beans out of
dabs of white flour and water, the same substance
used in making macaroni or spliaghetti. These beans
came out of the machine white and crisp. They were
later browned in ovens and sold to the trade. The
manufacturer of these wares intended them to deceive
the public and so they did, for jobbers, coffee roasters
and grocers everywhere mixed this worthless stuff with
real coffee and defrauded the American breakfast
table. My manufacturer did a thriving business for
many years and collected much money.
But whatever circumstances created the sharper out
of the honest fellow, we have to-day a country very
well provided with the former. Just how each one
came to hia goal need not bother us. What may both
entertain and benefit us is an account of confidence
attacks on business men and an explanation of the
many schemes and guises by which the reputable com-,
mercial or manufacturing men are defrauded. I think
these matters can best be made clear by recounting a
series of my own adventures and those of other men.
Generally the scheme aimed at the business man has
a local character and very often it depends for its
Pf

54s Confessions of a Confidence Man
effect upon civic pride and the progressive spirit which
every business man likes to display. Perhaps one of
the oldest of such devices is the ice-plant swindle.
This thing originated all of thirty years ago, but it is
by no means dead.
Artificial-ice plants are now common in nearly all
communities of any siz<^ but twenty years ago only
the larger towns were equipped and all smaller places
were still full of opportunity which sharpers were
quick to seize. The artificial-ice plant was a thing to
appeal to the pride of any community. Again, it pro-
duced a necessity, a product in continuous general
demand. Finally there is a certain mystery about
the making of ice which always adds to the attractive-
nesff of a scheme. Considering these things, gangs of
shrewd men set out in various parts of the country to
search for towns where ice plants might be needed.
Finding such a town, the schemer approached the
merchants and unfolded his idea. For fifty thousand
dollars he would erect or remodel a factory, install a
complete plant and begin the making of ice, which
could be produced at such and such a price and sold
at a very large profit. The schemer carried figures
and credentials. He demonstrated his idea by the
huge profits of ice companies in the big cities and by
the evidence that artificial ice had everywhere driven
natural ice out of the general market.
The schemer next began to discuss his idea in the
local newspaper, dwelling on the plea that a place so
progressive ought not to lag behind. He appeared be-
fore the local commercial^glub or merchants’ associa-
tion. He talked to the aldermen. In a little while
he had the town behind him and his stock subscribed.Schemes for Business Men 55
He now took over an old factory or erected a new one
of the cheapest materials and in the most insubstantial
manner. Next he brought to the town a mass of sec-
ondhand machinery recently discarded in some larger
town. This he installed. All the visible parts of the
plant were repainted and refurbished to look like new.
But the heart of an ice plant is in the great network
of pipes in the freezing tank. These are constantly
submerged in brine and none but an engineer would
dream of emptying the tank to inspect them. Here
the schemer used old worn-out piping that would not
survive the high pressures of an ammonia plant for
three months.
His installations completed, the schemer summoned
the business men of the town who had subscribed for
the stock and gave them a demonstration. He turned
out beautiful, regular cakes of ice before their eyes.
He befuddled them with false figures, overwhelmed
them with sanguine conversation. In the end they
turned over the cash—fifty thousand dollars of it—
and the swindler delivered the plant. It had cost him
not more than fifteen thousand dollars, usually not
more than ten thousand dollars. He took his great
profit and went on to the next town. In a few months
there was an explosion at the plant and the local busi-
ness men were forced to summon an engineer, who
disclosed the swindle.
A group of men who are known to me made for-
tunes out of this venal practice and several are still
at it. I realize that this is neither a new nor a very
intricate scheme, and the purpose of dealing with it
here is mainly to forewarn small communities which
may still be approached with this swindle. But the56 Confessions of a Confidence Man
ice-plant game is the prototype of a whole family of
frauds based on the same elements which have been
and are being worked in a hundred variations and on
business men everywhere. This type of game is that
invariably practiced by a figure who has become emi-
nent in popular fiction.
Attention should be called to the relationship of
this imposture to the whole order of boom swindles.
Real-estate-promotion games, population attraeters,
development schemes and factory-building bubbles are
all based on the same factors and are equally fraudu-
lent. What ambitious town has not been approached
by the suave promoter promising a great new factory,
a whole industry, shortly to be brought to the town,
with thousands of employees and their families, enough
to double the population ? The purpose is either vend-
ing of wildcat stock or the resale of local real estate
which has previously been acquired by the sharpers.
To what refinements this latter game may be devel-
oped will be seen from the amusing story of a set of
western railroad shops which were not built in a cer-
tain city.
About fifteen years ago it became known that a
prominent railroad was about to erect great shops in
one of the smaller cities lying toward the middle of
the railway system. Five or six municipalities were
possible candidates for these shops, which would em-
ploy about six thousand men and presumably add
some fifteen thousand souls to the local populace—a
very important matter to towns of ten or twenty thou-
sand' people. For excellent reasons the railroad did
not permit its choice of a site to be made known. To
announce prematurely the fortunate city would have57
Schemes for Business Men
meant a skyrocketing in local real-estate prices. More-
over, the railroad was waiting for the most advantage-
ous offer from either of two cities which had already
been secretly chosen as the only possible shop sites.
While the railroad waited and kept its counsel the
six candidate cities carried on a fierce and acrimonious
rivalry, which soon attracted the attention of some
shrewd friends of mine. These gentlemen had access
to confidential information and discovered that the
railroad had been quietly buying land in a city which
I shall call Lebanon. No money was to be made here,
for the necessary acreage was already obtained. The
clamor of the rival towns, however, touched the schem-
ers with inspiration. They picked out the likeliest of
the places on the disappointed list, made an inspection
of the local situation and optioned a big tract through
connivance with a real-estate speculator in the town—
a tract that might have served for the shops as well
as another and no better. A little time was now al-
lowed to elapse. Then one fine morning two or three
strangers were seen in town making surveys about this
piece of land. Later one of these men was found
consulting local real-estate men. He concealed his
identity, but saw to it that gossip identified him with
the railroad. The next morning the papers printed the
the report that an agent of the railroad was buying up
land in the aforementioned district. The stranger was
interviewed and naturally refused to affirm or deny
the rumor. But he went on pricing parcels of land
in a tract which he already had under secret option.
Now the conspiring local real-estate man came for-
ward with the news that he had sold options on parcels
in the chosen district, which was true and might be58 Confessions of a Confidence Man
interpreted as one liked. Other reports followed. In
a week the town was in a spasm of excitement. The
stranger was none other than a land agent for the
railroad. There was every reason for his secret move-
ments. Overnight the greedy local people bought up
lots and parcels of land in the chosen district at big
advances over all recorded prices. Strange to say, no
land could be had on mortgage—in this town where
realty had been going begging for a generation! Even
that did not rouse the suspicions of the local enthu-
siasts. They bought up every available lot for cash
and sat down to wait for the shops, dreaming of the
huge prices they would charge the railroad.
My scheming friends made their collections, divided
profits with the local villain and departed. Two weeks
later the board of directors of the railroad announced
that the shops would be built at a town a hundred miles
away.
The employment of a local man in the schemes of
confidence operators bent on defrauding business men
is a most common practice. Occasionally, as in the
instance just related, this man is a conspirator. More
frequently he is himself deceived and is used merely
as a bellwether to lead the other sheep into the trap.
This technic was used with great success by the pro-
moters of a development concern which went to the
wall four or five years ago and landed its principals
in prison.
The promoters of this large company started with a
cheap concession of land in Mexico. In planning to
capitalize this grant they apparently had two things
in view. They did not want to try outright stock-
selling, for that meant dealing with the small fry.59
Schemes for Business Men
And they were trying to use a plan which would evade
the law and keep out the troublesome and inquisitive
stockholder. Accordingly they formed a holding con-
cern. This concern was officered with dummies, or in-
struments of the original promoters. A contract was
now entered into between the promoters, who held the
concession, and the company, by the terms of which
the company was to turn over all receipts from the
public to the promoters to be used in the development
of the property. In return the promoters were to
turn into the company the total receipts from the sale
of the concession’s produce—metals, timber, cattle and
so on. The company was to sell to the public not
stock, but contracts in varying amounts beginning at
five hundred dollars. These contracts were to earn
a fixed annual dividend of eight per cent. At the
end of ten years the contracts were to be exchanged
for participating stock of the company. The scheme
had thus somewhat the appearance of a preferred-
stock proposition. It offered the investor a fixed divi-
dend and in turn froze him out of all participation
in the management of the corporation. It got rid of
the troublesome investigations of the small stockholder.
These contracts were sold by the company in large
numbers and the receipts—less expenses—turned over
to the promoters. The latter began to develop the
concession after their own manner, it appeared later.
They did sell minerals and lumber and they did turn
over the total receipts from such sales to the company,
which paid dividends out of this money. No one needs
to be told that all this was highly irregular and finally
fraudulent.
But the phase of the matter that interests us here60 Confessions of a Confidence Man
deals with the manner of selling the contracts to the
public. Agents of the company invaded the commer-
cial and merchants’ organizations of cities in all parts
of the country and laid their proposition before busi-
ness men, painting the lily and gilding the gold. This
done, they made overtures to one or two prominent
men in each community and invited these men to make
a free trip to Mexico for the purpose of visiting and
inspecting the company’s properties there. All ex-
penses were to be paid by the company and a high
time was guaranteed. The result was that more than
a hundred locally prominent men representing forty
or fifty towns and cities were loaded into a special
train and taken to Mexico. Wine flowed incessantly
all the way out. Stops were made at important cities
and the guests of the company entertained there, each
aeeording to his tastes. Hotels, resort houses and
theatres got large sums of the company’s money. And
so did drinking establishments and places below the
moral dead line.
Finally the fagged but hilarious party reached the
Mexican town which was to be the terminus of the
rail journey. An inspection of the property was now
made from colorful local equipages or the backs of
burros and horses. Mines, smelters, factories, lumber
mills, cattle ranches, prospects were shown the visitors.
It is true that most of them did not belong to the
promoters or the company, but the hosts of the occa-
sion were silent on this point.
After a great holiday the train started home and
its passengers were delivered to various towns in the
United States, overwhelmed with Mexico and liquid
kindness. All these worthy gentlemen, or nearly all,61
Schemes for Business Men
became boosters for this great and open-handed com-
pany. Thousands of contracts were sold to other
business men who had confidence in their local leaders
—and so the money went. I often have wondered how
a local Pooh-Bah who has been taken in by such a
scheme and caused his fellow townsmen losses feels
when the bubble breaks, as it did in this instance, with
the prison sentences aforementioned. The public loss
was a million.
This is what is known as the follow-the-leader game.
It is far from new, but it is prevalent everywhere
and I give an account of it for the public protection.CHAPTER Y.
FRAUDS FOR THE WISE.
^ ns observe for a purpose that all these little
devices are aimed at numbers of men. They are
not frauds against an individual, hut against a
town, a business community, a set of merchants. To
all intents and purposes they are public frauds. The
business man is caught by them, and so are other peo-
ple, low and high. As a rule, such games are directed
against the business man of the smaller town or against
the smaller man generally. But it must not be sus-
pected that the con man has in these days any weak-
ness for the little fellow. That used to be the pen-
chant of those jocund vauriens of old days. To-day,
as I have said before, all that is changed. The confi-
dence man knows that his game is worth a big stake.
He has long ago discovered that the petty thief or
swindler is far more likely to taste the bread of
prison than the great scoundrel.
“Steal a thousand,” says the con man’s saw, “and
they jail you; steal a million, they acquit you; steal
ten millions, they build you a monument.”
What truth there is in this piece of cynicism every-
one will say for himself. Howe’er it be, the confi-
dence gentleman of these days acts on the principle
implied. He likes big hauls and big men to deal with;
so the finest and foulest schemes of the fraternity are
6364 Confessions of a Confidence Man
no longer directed toward the small man of business,
but at the great. And thereby hang my tales.
Do you happen to know how matches are made?
Chances are you have a very vague idea, unless you
have been through a factory. Not one business man
in a thousand knows much about this industry. He
supposes, of course, that matches are now made by
machinery. He has heard that a trust has the match
industry in hand. He is aware that war-quality
matches were a scandal and a source of copious entries
on the book of the angel who records profanity.
Otherwise he is likely to be very nebulous.
Now it chances that matches have long been and are
still to some extent made in two ways. In large mod-
ern plants, which make ninety-nine per cent of all the
lueifers of the day, everything is done automatically
by a line of beautifully balanced machinery, which
takes in a log of wood at one point, a bath of paraffin
at another, a first chemical dip at another and the
friction ignition substance at a fourth point. This
machinery cuts the matches, gives them their three
dippings, sorts them for imperfections, counts them,
feeds them into boxes, and pushes them out at the
far end ready to ship. Even the cartons are printed
and the wrappers stamped and pasted in this intri-
cate device.
In an older development matches were made semi-
automatieally. That is, there was a machine for cut-
ting the sticks, one for stamping the cartons, printing
labels, cutting wrappers and so on. But in these
plants, which are always small and primitive, the dip-
ping, sorting, packing and counting has to be done
by hand. Years ago, before centralized match interests65
Frauds for the TVise
got hold of the industry, these small plant9 were very
numerous. Little by little the big concern bought
them up and closed them. In this process a few con-
niving gentlemen, with one of whom I was intimately
associated, managed to get hold of the plants of sev-
eral of these old-fashioned match works and wuth these
our fellows did deadly execution for many years, i
The associate of whom I speak was one of the leaders
in this sulphurous game and died rich afa result of
its potencies. There was an old-fashioned match fac-
tory in his town and when the trust bought it out this
friend, whom I shall call Sealer, sin# that rather
resembles his name, bought up the plant for junk.
With it he set out on a series of amusing and amazing
adventures.
One summer evening, about fifteen years ago, when
the natives of Smalltown were taking the air on their
porches, watching the burgeoning of the stars and
listening to the last cheeping of the insects, a train
drew in from Chicago and discharged a single pas-
senger, whose name was Sealer, or so I say. He went
to the hotel, bought himself as good a room as could
be had, growled at the service, gave the bell boy a
New York tip and went to bed. The next morning
Mr. Sealer bought a small bit of cheap land at the
edge of the town, held a consultation with a con-
tractor whom he had summoned from a big city, and
announced to Smalltown that he wTas about to build
a factory. In thirty days the startled little town
realized that Mr. Sealer was a man of his word, for
there stood his plant—a low, flat, one-storied affair,
but a factory nevertheless.
Just what he intended doing with this building was
KRntpSPli166 Confessions of a Confidence Man
still mysterious, but machinery began to arrive. In
another thirty days it had been completely installed,
bright with fresh paint and polished metal, ready to
begin labor, but still enigmatic. However, Mr. Sealer
was shortly to take Smalltown into his confidence. He
meant to manufacture matches and would employ at
least fifty men and girls. The town was delighted
with the idea. Even John Hannon, the local capitalist
and real-estate gentleman, who had sold Sealer his
factory site and grinned guiltily as he took the money,
came to view the wonders Sealer had wrought. Small-
town had a new industry and no doubt about it. More
than that, the industry became immediately indus-
trious. Sealer and about forty assistants began mak-
ing matches.
There could be no doubting the energy, sincerity
and good faith of Mr. Sealer. He had come to town
from nowhere, asked no man for anything, put up
his factory, given employment to forty people and
added to the population of the town a factory super-
intendent wfith his wife and six children. That alone
was something. Just why Mr. Sealer had chosen
Smalltown was a little recondite, to be sure, but per-
haps he liked the climate or the water or the fishing.
It was true he neither drank the water nor fished,
but why argue?
It was soon observed that Mr. Sealer rather culti-
vated the society of John Hannon. Why, no one could
imagine. John wras as sour and shrewd an old citrus
as ever grew in the North. No one had ever known
him to give a nickel to anyone or anything, and it
was said he had left the church because of the collec-
tions. Nevertheless, Mr. Sealer liked John Hannon.Frauds for the Wise	67
At least he was with him more than anyone else in
town.
Smalltown did not know it, but these two were talk-
ing business. Mr. Sealer wanted to borrow some money
—as much as fifty thousand dollars. He was trying
to talk John Hannon into making the loan. Hannon
disliked and distrusted Sealer along with the rest of
humanity and demanded security. Sealer promptly
offered a choice collection of stocks in a great assort-
ment of companies. Hannon investigated and rejected
this security. Sealer immediately offered other col-
lateral, which Hannon again looked up and found not
to his liking—just as Sealer had expected, to tell the
truth. Finally a third batch of security was offered
and likewise refused. Then Sealer went to see Hannon
in a huff.
“See here,” said the match maker with assumed
anger, ‘ ‘ what kind of security do you want ? ’ ’
1 ‘ Now, now! ’ ’ soothed the smooth Hannon. “ Don’t
get excited, Mr. Sealer! You know I’d like to make
you this loan, but I’ve got to be careful. I liked your
last bunch of securities better than any you’ve offered,
but not well enough to lend fifty thousand. Maybe
if----”
Sealer interrupted him rudely.
“See here, Hannon,” he stormed, “I’ve got to have
some money to extend my business, and I’ve got to
have it quick. I didn’t want to mortgage my business,
but I see I have to. My match factory is incorporated
for two hundred thousand dollars in stock and there
are one hundred thousand dollars’ worth of bonds. I
own them all. I’ll put up the whole mess of bonds
with you if I have to. I’ve got orders enough to net
n68 Confessions of a Confidence Man
the interest on fifty thousand dollars seven times over
and I can fill them in nine months.: Tell me, how does
that hit you?”
Gradually, by means of Sealer’s repeated offers of
security, Hannon had been worked up to a pitch where
he was anxious to lend the money. But caution was
second nature with him. He summoned an accountant
from the city and went into Sealer’s business. The
report showed that Sealer had eight salesmen on the
road—one would have been a great plenty. There
were bonafide orders on the books for all the matches
Sealer could turn out in a year, according to his own
figures. He was now employing a force of seventy
people and selling parlor matches to the trade at prices
ten per cent under the market. In spite of this he
was making a profit of about forty per cent on his
business. Hannon read the report three times and
went to see Sealer.
‘‘How can you sell matches for less than the trust
and still make forty per cent on your business?” he
demanded.
“Easy,” said Sealer. “The trust makes eighty per
cent. That’s why I went into the match game.”
“You mean to say that----”
“What do you think they build trusts for?” de-
manded Sealer. “To make less money than other
people? Monopolies are intended to keep prices up.”
Hannon made the loan. At the end of six months
Sealer defaulted on his interest. Hannon stormed
and raged and helplessly foreclosed the mortgage,
while Sealer angrily hurried out of the town. Then
Hannon and Smalltown began to discover things. The
factory had been put in the flimsiest possible way of69
Frauds for the Wise
secondhand materials. The concrete in the floor was
a half inch thick. The boiler wTas an ancient affair
worth fifty dollars. It had been placed in new brick-
work to conceal its age and rust. A new front had
been put on to deceive the beholder. The engine was
equally antique, but fresh paint and metal polish had
made it look like new to ignorant eyes.
Sealer had been selling matches for less than trust
prices, it wras true, but he had been losing money on
every box. He had orders—genuine ones—for several
hundred thousand dollars’ worth of matches, but to
fill them wyould have bankrupted him ten times over.
Hannon had been neatly taken in by a great sheaf of
bona-fide orders, which Sealer had never meant to fill,
and the plant had not cost Sealer more than five or
six thousand dollars. Add to this the money he had
lost on such matches as he did make and sell, and my
friend was still twenty-five or thirty thousand dollars
ahead.
A little later, when the plant of the match factory
was sold at sheriff’s sale, a junk dealer made the
highest bid on the equipment, something like five hun-
dred dollars. The whole works, except the building,
was knocked down to him and he promptly dismantled
the plant and moved it away. Two months later he
was busily setting it up in a new factory in some
other city. The smiling and genial Mr. Sealer stood
by watching the proceedings with languid interest and
lively anticipation.
“How long will the old scrap iron hold out, Char-
lie?’’ asked Sealer.
“For years if we treat it kindly, uncle,” said the
alleged junk dealer.
70 Confessions of a Confidence Man
And it did—to the discomfort of two score small-
town capitalists who did not understand the match
business. Sealer told me recently after he had re-
tired from confidence that there were originally four
of these migratory match factories. He had at last
junked his own, but he believed two of the others
were still on the road.
Who to-day does not knOw of the fixed-price insti-
tution ? It is one of the results of modern advertising
and standardization. A manufacturer who makes a
superior article and pushes it in the market feels that
he has a right to protect himself in the matter of
price. This he does in two ways—by forcing retailers
to sell at a fixed mark and by maintaining an unvary-
ing wholesale cost. Often both methods are employed,
frequently only the latter. Where this is the case the
trade finds that it must pay a certain figure for the
article, whether the order is for a gross or a million.
The jobber does not always take kindly to such ar-
rangements, since they limit his profits, and he has
tried in various ways to break the manufacturer’s
hold. Everything else having failed, he has gone to
court, but the manufacturer has generally been up-
held. And there is nothing unfair about the whole
practice. If a manufacturer pays out great sums to
push his product into constant general use he facili-
tates the sales, quickens the turnover, simplifies the
handling of stock and may thus legitimately expect
the dealer to accept a smaller standardized profit.
But this plan breeds schemers, as does every other
thing in life that promises profit. No one need be told
that quick-and-easy money could be made overnight
out of any standard article in general use selling at a71
Frauds for the Wise
fixed price if one could but get hold of a large quantity
at less than the set cost. But how accomplish this?
The manufacturer will not cut his rates, no matter
how large the order, and to sell a substitute for the
genuine article means prison. The combination seems
unbeatable, yet shrewd fellows are ever trying to beat
it, and recently several of them succeeded.
One morning in the summer of 1917 a curt, well-
dressed, busy young man presented himself at the
office of a large concern which manufactures a widely
known dentifrice. The young man ’s^ard meant noth-
ing to the manager of the concern, but the accompany-
ing message did. The man said he had come to buy.
He was admitted.
“Mr. Blank,” said the visitor, laying aside his hat
and taking a chair with calm assurance, “my name is
Doe. I am in the army contracting business and I
need some tooth paste.”
“That’s what we’re here for,” smiled Blank.
“And I need it at the right price.”
“Our price is as low as making a good dentifrice
will allow.”
‘ ‘ Let’s not waste time, ’ ’ said Doe briskly. ‘ ‘ I hap-
pen to know something about the business myself. I
don’t want to argue. It would get us nowhere. But
here’s my proposition: I have a contract for three
million army field kits. Each one is to contain a tube
of standard tooth paste and a brush. The brand of
paste isn’t specified. I can use whichever one comes
cheapest. ’ ’
‘ ‘ But you want quality for our soldiers, don’t you ? ’ ’
the manager interrupted.
“That’s why I’m here,” Doe returned. “But there72 Confessions of a Confidence Man
are other good pastes, some of them better known
than yours. I use yours myself and I like it. I be-
lieve in giving the fighting men a good article. But
business is business. I can’t afford to use your paste
at more money than I’d have to pay for another one
just as good. Clearly, that would simply be throwing
away my profit.”
He paused. The dentifrice maker watched him and
waited.
“Now, my offer is this,” Doe went on. “If I can
get three or four million tubes of your paste at a
price well under the regular market I’ll do business
with you on the spot. I’ll not ask you to bid against
other concerns and I’ll pay cash on delivery. The
paste you sell me will not compete with your regular
output. It will not disturb the market. It’s merely
a question whether you want to take this business at
a close profit or whether you want me to take it to
someone else.”
“I think we can do business,” said the manager,
“but I’ll have to see the directors.”
“I’m in a hurry,” Doe objected.
“Will an answer to-morrow do you?”
It would. Doe took his hat and his leave.
Before sundown the next day the sale had been
made at a price three cents under the standard whole-
sale market. Deliveries were to begin within thirty
days.
The manufacturers of the paste put on a double
shift of workers, ran the factory night and day, in-
stalled some extra machinery and generally put them-
selves out to speed up this army contract. On the
day agreed they began to deliver the goods, twenty-73
Frauds for the Wise
one thousand gross of paste tubes. In spite of their
promptitude Doe seemed to be highly impatient. Ship-
ments went astray or were delayed and he telegraphed
in, wildly demanding that duplicate orders be shipped
at once. The result was that original and frequent
duplicate shipments went forward to half a dozen
points in the East, South and Middle West to fit the
kits for the men training in the various camps, the
manufacturers believed.
In this way Doe eventually got hold of about a
third more of the paste than his original contract
called for. He had four million tubes at three cents
under wholesale. But if he had tricked the manu-
facturers into swelling their order he was a man of
his word in other respects. His certified checks came
in with laudable promptness and the whole business
was cleared up in very short time. The manufacturers
now laid off their extra help and resumed manufac-
turing at the old regular rate.
But suddenly something happened. Salesmen found
the jobbers in all sections of the country loaded up
with the tooth paste. Mail orders ceased coming in.
Paste began piling up and mounting up in the ware-
rooms of the factory. The place got so choked with
paste that the vats were emptied and the factory
closed down. A lurid and painful light broke in upon
the startled and confounded manufacturers.
The suave Mr. Doe was just a very modern con
man. He had got four million tubes of paste at three
cents under wholesale and resold the whole lot to the
jobbers at half a cent under the usual price. The
country was stocked up with this standard dentifrice
for months to come and Mr. Doe had in his pocket a74 Confessions of a Confidence Man
•cool hundred thousand that should have lined the
portfolios and bank accounts of the tooth-paste stock-?
holders. A simple con man with a plausible story and
a shrewd approach had put it over on a first-grade
manufacturing firm.
I know this young Doe person and know him well.
His real name does not matter.
But I may remark in passing that other manufac-
turers fell before his guileful attack. For instance,
he went to a widely known manufacturer of hair tonic
and told this tale:
He was the head of a firm which had about three
thousand medicine wagons traveling through the re-
mote and rural parts of the country, vending various
toilet articles and patent nostrums. Heretofore their
business had been in cheap and worthless products,
but the people were now so sophisticated that there
was a demand for standard goods only. Hence it was
purposed to reconstruct the entire business, to equip
all the wagons with first-class merchandise and to
enlarge very greatly. Doe again carefully pointed
out that this market was one which had never before
been reached by the products of the firm he had
approached. Thus the hair dressing sold from his
wagons would not compete with the regular output.
The manufacturers sold him a huge order at a great
cut in price—and for four months afterward no wheel
turned in this factory.
It is with some reluctance that I expose this clever
game. I have set out to lay things bare, however,
and the manufacturer is as much entitled to my aid,
such as it is, as anyone else.CHAPTER VI.
THE WONDERFUL WINDOW CLOSER.
LL Americans have a great weakness for pat-
ents. We have read in our school hooks of
the epochal inventions of some of our country-
men; we have been taught to believe that Americans
are natural inventors; w*e have seen huge fortunes
reared before our very eyes on the foundation of some
apparently trivial device. We know that next to
natural resources mechanical inventions have been
our greatest source of wealth. Just how we know this
is decidedly uncertain, but we are like the Tibetan—
what we believe is true.
So many staid and solid men are led into financial
bogs by the fen fire of the patent. I shall have to
refer to this again and again as I proceed to unfold
the story of con, for the inventions game figures in
the mulcting of every class and kind of citizen. The
crank inventor we all know and treat with indul-
gence. The humble fellow who invests in the stock
of some wildcat patent concern has the pity of every-
one. The bona-fide inventor who i9 juggled out of
his right and rewards by financial sharpers is all
about us. But for all this we have generally not the
faintest idea to what limits the fraudulent use of
inventions and inventors is driven by con men. Nor
do we apprehend the shrewd, experienced, hard-headed
character of manyi of the victims.76 Confessions of a Confidence 31 an
The eon man knows that many a business man who
has made his pile in some industry he understands
nourishes secretly the conviction that Nature intended
him for an inventor. Many of these men indulge
their spare hours with mechanical devising. Many of
them take out patents on one thing and another, mostly
on wholly worthless hut ingenious contrivances. For
such people the sharper is ever on the lookout. I was
myself in my day, so I speak from profound con-
viction.
A few years ago I was idly running through a
newspaper which lists the patents granted, the names
and addresses of the patentees and gives a description
of the devices. I really wrnsn’t looking for trouble,
but it came my way. On an inside page of the paper
I discovered that John Smith had taken out a patent
on an automatic window closer. Smith was known
to me by reputation. He was a very wealthy retired
merchant and landowner living at the time on a large
estate, not more than a million miles from the town
wyhich I then called home. Naturally, a patent taken
out by such a man interested me. What was a million-
aire, who had long since given up money-making,
doing in the patent game? Surely this was some
quirk of the old man.
The thing bothered me and I made some inquiries.
I found that Smith was the sort of rich man who
refuses to pamper himself with such accommodations
as the valet or personal attendant. He lived on his
large estate in a great house with as few servants as
possible. Ergo, when Smith wakened on frosty morn-
ings he got up and shivered to his window like mil-
lions of other sovereign electors. He closed his ownThe Wonderful Window Closer 77
sash, turned on his own radiator and went quakingly
back to bed to wait for warmth.
I could see most lucidly the genesis of Mr. Smith’s
patent. Like so many of us, he had dreamed of a
device that would close the window and throw on the
steam without taking the cosy yawner from his bed.
Smith was a man of action. Cold floors and icy rooms
had driven him to the deed. He had worked out and
patented the window closer and steam gusher. No
doubt, being a practical soul, he was now anticipating
great rewards. It seemed to me that I ought some-
how to share in them.
A few days later a man in my employ, who had
been chosen for his ability to play the part, appeared
in Mr. Smith’s town and asked for an interview with
the inventor. Smith received him and gave him a
demonstration.
To the large central window in the rich man’s bed-
room was fixed a contrivance of weights and pulleys
looking for all the world like the familiar exercising
machines used in all gymnasiums and many homes.
That was indeed what it was, but it served a double
purpose. At night, when the window was opened
for sleeping, the weights were drawn up and the cords
attached to the sashes by a convenient hook. This
hook was electrically controlled. When a button at
the bedside was pressed the cords were released and
the weights pulled down the lower sash and pushed
up the upper sash, closing the window. At the same
time a butterfly valve on the radiator was thrown open
and the steam rushed into the pipes. Simple, ingeni-
ous and not without humor. Mr. Smith explained
that his invention was both a window closer and an78 Confessions of a Confidence Man
exerciser. It could be sold practically for the price
of the ordinary weight machine and the cost of elec-
tric installation was small.
“Very satisfactory,” said my agent. “I think
there is a great business opportunity in this thing.”
“Every house and apartment in the country will
have my device in the bedrooms within five years,”
said Smith.
My man was somewhat more conservative than that,
but he displayed the necessary enthusiasm and wanted
to buy the state rights for New York. Smith was
delighted.
“We can do business on that line right off,” he
said. “And I’ll make you a liberal proposition.”
“How much for the exclusive rights in New York
State?”
“Eight thousand.
“Pretty steep.”
“Not for a thing like this.”
They haggled and haggled, but eight thousand dol-
lars was the price and the rich inventor stuck to his
mark. Finally my man came into the open. He was
willing to pay the price, but he was a poor man who
expected to pay for his rights out of his sales. He
was ready to pay down a small sum to bind the bar-
gain and the rest as he made his sales.
“How much down?” asked Smith.
“Well,” said the agent lamely, “all I’ve got with
me is about three hundred dollars. ’ ’
It seemed too small to the infatuated inventor, but
my man pointed out to him that no factory had been
built and it would be six months or a year before the
window closer could be produced in quantities. Fi-The Wonderful Window Closer 79
nally they struck a bargain. The initial payment of
three hundred dollars was merely a bargain binder.
Smith was to build a factory at once and begin the
delivery of his machines within six months. Ninety
days after the first quantity deliveries a payment of
one thousand dollars was to be made. The remaining
six thousand seven hundred dollars fell due at inter-
vals extending over the second year. A complicated
contract was drawn, legally witnessed and signed.
My agent paid his three hundred dollars and departed
in peace.
Three days later I wrote Smith a letter and an
impressive one. He responded at once and invited
me to call on him, which I did. He gave me a demon-
stration of his device, bubbling the cold enthusiasm
of old age as he talked. I wanted to laugh at him,
but pretended to be enormously impressed. He fin-
ished his demonstration and took me downstairs to
a fine library and a good cigar. While we smoked
he blew otf some additional enthusiasm and I let him
rage.
“It’s like this, Mr. Smith,” I said, when he lulled.
“I’m in the promotion line. My firm takes promising
patents of this kind, buys them outright and either
sells them at a profit to manufacturing concerns or
finances them and puts them on the market. I’ve seen
enough of your device to want it. What will you
take for the whole thing?”
He thought for a long time, scratching his head
and figuring.
“How’d a hundred thousand in cash hit you?” I
interposed.
He pretended to be a little disappointed, but I could80 Confessions of a Confidence Man
sense his joy. We haggled a little and agreed on my
figure.
“Of course,” he said at last, “I don’t have the
pleasure of knowing you, Mr. Crosby.”
“I’m ready to guarantee good faith,” I returned.
“Come with me to your bank and I’ll draw on New
York for ten thousand dollars.”
We went to the local bank and I put in a draft.
It was paid within twenty-four hours and I took
Smith to his own bank and showed him the money.
His doubts were allayed. We walked back to his
house and began to map out details.
“You understand,” I said at the proper moment,
“that what I’m buying is the absolute, complete and
exclusive right to manufacture and sell this patent.”
Smith suddenly remembered that he didn’t have the
complete rights to sell. Almost sheepishly he informed
me that he had already disposed of the New York
State privilege. I looked apoplectic with anger and
consternation.
“What?” I cried. “You’ve sold the heart out of
the rights V* j
“I guess I have,” he admitted.
“For how much?”
“Eight thousand.”
I grew voluble with protests and explanations. New
York State was the very cream of the country. Here
it was that there were people with money who would
equip their houses and apartments with such devices.
New York State was half the country for such an
article. We must get back the New York rights.
“How can I?” he asked hopelessly. “I sold them
ten days ago and took the money.”flflttfrmr
The Wonderful Window Closer 81
“That’s up to you,” I said coldly. “All I have
to say is that I can’t buy without the New York rights.
I want .the whole thing or nothing.”
With that I left.
Mr. John Smith did a lot of thinking. He was a
sane business man. He knew that one hundred thou-
sand dollars in the hand was worth the finest patent
in the bush. He telegraphed to the owner of the New
York rights and asked for an immediate meeting. My
man went to 6ee him and refused to give up his con-
tract. Smith argued and bullied, but it was no go.
“In heaven’s name, what do you want?” he ex-
ploded finally.
“If this contract was worth eight thousand dollars
to you it’s worth that to me,” said the agent. And
they did business.
Smith bought back the New York rights and sent
for me. Strange as it may seem, I had suffered a
change in heart meantime. I had discovered other
devices similar to Smith’s. There were, in fact, such
mechanisms on the market and one I had seen proved
to be simpler and cheaper than his. All this I wrote
him with the word that I was sorry to withdraw my
offer.
I have never seen the venerable inventor since. But
I did see my hired conspirator. He brought me
Smith’s eight thousand. I deducted the three hundred
dollars my agent had paid down, struck the expenses
off the sheet, paid my man a thousand for his trouble
and put the rest into my bank with the ten thousand
dollars which I had meantime redrafted from New
Jersey. Not a great haul, but a pleasant one.
Whoever has traveled through coal districts has seen82 Confessions of a Confidence Man
the huge black mounds thrown up about the anthra-
cite mines in all the coal cities. These great piles
consist of the coal dust, or refuse, the by-product of
cutting coal to sizes. It has no value and every effort
to convert it into usable shape has failed. It is called
culm. For many years various people made experi-
ments with this culm, trying by one means or another
to press it into nuggets or briquettes so it might be
burned. The problem here is in the binder, which
must be some cheap, mucilaginous and inflammable
substance. Coal tar might serve, but it is in such
demand for chemical purposes that it is out of reach.
Paraffin would be even better, but that would be burn-
ing gold. The only practical substance is asphalt and
that is none too cheap.
Nevertheless, many experiments have been made
with the culm and an asphalt binder. The lure has
always been the fact that the mine owners are willing
to give their culm piles to anyone who will agree to
move them. They are not only useless and unsightly,
but they occasionally burst into spontaneous flame and
endanger property. Now something free has irresis-
tible allurements to most of the human breed, and so
with culm. But culm briquettes made with asphalt
have always failed. Put into a furnace or stove, they
melt before they bum and form a mass through which
no draft can penetrate. They clog the grates with
huge molten clinkers and are a delusion and an abomi-
nation. The trouble is that most people are not in-
formed on this subject. This last fact I knew and
I used to make it a rule to profit by such knowledge.
Accordingly some years back a friend and I set
out to exploit the culm piles. We built a small modelThe Wonderful Window Closer 83
machine for making briquettes out of culm and a
binder. It was worked on an endless-belt system and
did the whole work automatically. The culm and
binder were fed into a hopper at one end. The machine
mixed the constituents, molded the briquettes, passed
them through an oven, where they were dried, and
spat them out into loading cars at the far end. We
set up the machine at a city a short distance away,
in order not to be too near the mines, and waited for
a sucker.
I was returning from a trip to Chicago sometime
afterward when I fell into conversation with a sub-
stantial-looking man who turned out to be a manu-
facturer and merchant. He was on his way to New
York for a pleasure trip. As the train passed through
the coal fields I drew his attention to the great piles
of culm. I was interested in them and expected to
make a great fortune out of them. He was imme-
diately receptive and I told him a romance of culm.
It could be had for nothing. The mine owners might
even pay something to have it removed. Coal had
always been so plentiful that no one had yet devised
a way to use this product, but now I had done it. He
was curious and I mysterious. Finally he confided
to me that he had means and might go into a deal of
the kind. I went on to New York with him and built
him up.
Without going into all the details I soon had him
in a mood for business and took him to the city where
I had the machine set up in a rented little factory.
We made a few briquettes for him. He liked the
machine immensely. Most people have a weakness for
an ingenious piece of mechanism. It is the toy instinct84 Confessions of a Confidence Man
grown up. Our man liked to watch the briquettes
come popping out of the machinery. He played with
the device for an hour. Then he lent us one thousand
dollars, taking five thousand dollars’ worth of our
stock—face value—as security. With this thousand
dollars we were to ship in culm and buy asphalt. He
would return home, whither he was bound, and if we
could do what we said he would finance us.
No written contract was drawn. Neither side wanted
it. Our main object had been to get a little of his
money into the enterprise, for most men will follow
an invested dollar with ten or a hundred.
Now we set to work. We bought a few barrels of
asphalt out of his money and we shipped in a carload
of culm. The expenditures were carefully recorded
so our backer might see for himself the cost of pro-
duction. At the same time I bought a large quantity
of unrefined paraffin, paying for it out of my own
money and carefully concealing both the paraffin and
the transaction. We then made up a fine batch of
briquettes consisting of about three parts culm and
one part paraffin. Naturally, this stuff burned furi-
ously, making a stupendously hot flame and leaving
only an impalpable dust for ashes. Such fuel would
practically do away with grate cleaning. And well it
might. It cost something like fifty dollars a ton to
produce.
We had a fine collection of briquettes ready when
our man returned. He took several bushels of the
product to New York with him and tried them out
in a friend’s fireplace with gratifying results. He
came back full of glee and commanded us to ship a few
tons to Michigan so that he might try them in hisThe Wonderful Window Closer 85
factory. Then he sat down to figure with us and we
did some ground-and-lofty gymnastics in mathematics.
We represented, to be sure, that the briquettes were
made of culm and asphalt. Secondly, we represented
that the proportion of asphalt to the culm used in
our mixture was one in eleven. The true proportions
are about one in four. Since the culm is free and the
asphalt costs the money, this made a very vital differ-
ence in the cost of production. Our friend went over
the figures very carefully, calculated the amount of
asphalt that was gone—we had dumped it into a
convenient creek—saw that we had turned out several
tons of briquettes and felt satisfied. He demonstrated
with our aid and to his own satisfaction that we could
lay down a ton of briquettes at his factory in Michigan
for half the price of anthracite. With these calcu-
lations in his portfolio our manufacturer hurried West.
He wrote that the experiment with our fuel had
been made and proved highly satisfactory. Time wore
on and we expected him at the factory from week to
week, but he did not come. Finally when the term
of our loan was about to expire he appeared. We
gathered in our small office and our backer cleared
his throat.
'‘Well, boys,” said he, “I suppose you’re ready to
take up this note?”
“Aren’t you going to stick by your agreement and
finance this thing?” I demanded angrily.
“What agreement?”
It was true there was only a verbal understanding.
The man of money had us and he knew it—so did we
—all along. He meant to keep our stock—five thou-
sand dollars’ worth for his one thousand. He saw86 Confessions of a Confidence Man
that we had a great proposition and he meant to hog
all he could. Naturally, we got up our indignation
to the boiling point. We reproached him in every
forbidden term and ordered him out. He went—
smiling and snarling.
A passion of correspondence ensued and was suc-
ceeded by a tornado of conferences. We negotiated,
we threatened, we begged. This was our idea. We
had spent years in working it up. We had put our
savings into our machine and our experiments. Did
he mean to rob us? No, but he had a block of our
stock and he meant to keep it. Business was business.
That was his invariable and final answer. How sweetly
it tinkled in our ears! How wonderful this pronounce-
ment of greed and crookedness always sounds on the
lips of a dupe. I have heard it a thousand times from
men who thought they were doing me and were, in
fact, about to be done—and my heart always leaped
up at those pregnant words. Business is business!
Finally our negotiations came to an end. I simply
told our man that he was a crook and had taken
advantage of us. We could not and would not remain
in partnership with such a person. It was a case of
him out or us.
‘ ‘ What’s your proposition ? ’ ’ said he with an ironic
smile.
“We’ll give you two thousand dollars for your stock,
twice what you gave for it; or we will sell you the
whole thing outright.”
“How much?”E
“We’re incorporated for one hundred thousand
dollars and we’ll take thirty thousand dollars cash
for the works.”The Wonderful Window Closer 87
He laughed at us. What did he want with more
than a controlling interest? We assured him that a
control was not for sale. It was a straight buy-out
or nothing, and we would not move a wheel so long
as he was a stockholder wfith us.
This gentleman had counted all along on making
us angry and then destroying us after the fashion of
the gods. He had counted on clearing us out of the
way for a few thousand. Our price was much more
than he intended paying, but we knew how to compel
him. At the right moment an engineer representing
a fictitious buyer in Pittsburgh appeared on the scene,
went over the plant and held a series of mysterious
conferences with us. Our man took alarm, brought
us thirty thousand dollars in money and closed us out.
I hope he has succeeded in making burnable bri-
quettes out of culm and asphalt, but if he has the
world has not yet been apprised of the marvel.CHAPTER VII.
GOLD AND GREED.
CCORDING to the government statistical bur-
eau, the state of North Carolina produced
j seven hundred and fifty ounces of fine gold in
1920 and the market value was fifteen thousand seven
hundred dollars. The preceding year North Caro-
lina’s mines turned out one thousand one hundred
and thirteen ounces, which sold for twenty-three thou-
sand dollars. The state contests fourteenth position
in the matter of gold riches with Wyoming. Plainly
neither of these communities can rank gold as any
important source of wealth. However, these are only
the government figures and no one need be told how
unimportant are such factitious things to the enthu-
siast—and the con man.
A number of years ago a gentleman of my acquaint-
ance, who had a small but legitimate gold claim in
North Carolina, asked me to help him incorporate a
company. I went South with him, looked over the
ground and saw there was little to be got out of his
claim. But he wanted a company formed and I ac-
commodated him. That was all I ever had to do with
this affair, but the latent gold fever I had discovered
in Carolina, which region no one at any distance ever
associates with the gold country, had given me an
idea.
8990 Confessions of a Confidence Man
It was a blowy March morning in 19— when two
rather seedy men appeared in the general store of
Mr. Green, merchant, mayor, banker and boss of his
community. Mr. Green’s town was one of those
antique, leisurely, prosperous Southern places, not
greatly altered since the Civil War; slow growing,
slow acting and thrice slow about giving up anything.
Mr. Green was of his town. In his own opinion he
was the town. For this there was some justification.
From the office of his store, where he looked out upon
every customer who came his way, Green directed
most of the public and private affairs of the com-
munity. He was rich, hard, inflexible and domineer-
ing. But his town liked him just the same. And the
two men who had just entered his store came to like
him too in time, though for reasons entirely adven-
titious.
Green watched these two strangers with unusual
interest. I know, for I was one of them. I don’t
deny that there were reasons for the merchant’s con-
cern. His strange customers were buying an unusual
set of articles. First, two sides of bacon and a bag
of flour, then a small list of groceries, next pans and
skillets, a tent, pick and shovel, a shotgun, powder
and shot, a shell-loading machine and, finally, several
wide flat pans went into the possession of the strangers.
They paid in cash, bundled up their purchases and
went away. An hour or two later the strangers bought
an aged horse from a dealer. Wherever they went
they attracted attention. The town was not used to
fellows of their look and was stung with curiosity.
A girl reporter on the local newspapers approached
the strangers and tried politely to find out their busi-Gold and Greed
91
ness. They indicated that they were miners—without
saying so. The next morning the newspaper reported
that two strange prospectors were in town. That was
apparently all the visitors wanted, for that night they
struck out from the town afoot with their pack sagging
sadly on the weary back of the ancient steed.
I had felt the need of a vacation for a long time
and been too busy to take one. Now I was having
my holiday at last and I was combining business with
pleasure—as was my custom. It was spring. The
fields and hedges were already abloom. The air was
full of birds migrating north. The days were pleas-
antly warm and the nights not too chill for comfort.
A month or so in the outdoors of a Carolina spring-
time had very definite allurements. Besides, there
was the matter of a gold claim. Some weeks earlier
I had been through this region in very altered dress.
I had noted this town from which my partner and
I were setting out and my appraising eye had meas-
ured Mr. Green. Liking him as a prospect, I had
gone to some trouble to buy up a piece of waste land
on both banks of a rocky creek about twelve miles from
the town. Just how he was connected with the land
I must explain at a proper time. In any event I was
a landowner in North Carolina and set out to spend
a month on my property. A week after my departure
from town I reappeared, riding my shaky horse. I
went to Green’s store and asked to see him.
“I’ve got a little gold here, Mr. Green,” I said.
“It’s not refined yet, but there’s very little sand in
it. I wonder if you can negotiate it for me. ’ ’
With that I produced a small canvas bag and laid
it on the counter. It contained about three ounces of92 Confessions of a Confidence Man
gold dust and little nuggets along with a few pinches
of dust and sand.
“Be glad to, glad to,” said Mr. Green, pouring
out a little of the gold into his hand. “I’m a director
in the bank here and I’ll have them attend to it for
you.”
I thanked him, asked him to credit me on his hooks
for whatever the gold might bring, bought a few
grocery items and rode off.
At the end of another week I returned and turned
over a slightly larger bag of gold to the merchant.
He held the thing up hesitantly and I could see he
was itching to ask questions, but he contained himself
and I went away, only to return in four or five days
with still more gold.
“I don’t like to keep much of this stuff round the
camp, ’ ’ I told him. “ It’s easy to steal and hard work
to pan out.”
“Glad to take care of it for you,” said the accom-
modating Green.
“If it’s any trouble to you I’ll open an account
with the bank,” I suggested.
‘ ‘ Oh, no, no—not a bit of trouble! ” he protested
hastily. “Of course if you think the bank is more
secure----”
“Not at all,” I said. “I simply didn’t want to be
a burden.”
“That’s all right,” he smiled. “Just bring your
gold here and I’IT see that you get honest value for
it.”
In a week I visited him again. This time my gold
bag contained about six ounces. Green could contain
himself no longer.Gold and Greed
93
“You’ve struck gold, have you?” he half whispered
as he gave me a receipt for the precious stuff.
“Looks that way,” I answered.
“Where?”
“Twelve miles out on Swamp Creek.”
“Your own land?”
“Yep, bought it last month.”
‘ ‘ Come into the office, ’ ’ he suggested suddenly. *■ ‘ I
want to talk things over.”
Mr. Green tried to get a deal of information out of
me and I was willing—within certain limits. We
had struck gold in paying quantities, as he saw; only
two of us were working; we were using the most
primitive methods.
“Wouldn’t you like to interest some capital, put
in some modern machinery and get the gold out in
a hurry?” he urged.
I was very wary. People who took capital into
their mines usually got skinned. We were taking
out eight ounces or so a week. In a year we’d have
enough to make a payment on machinery. Then we’d
have the whole thing to ourselves. I thanked him
kindly, but felt I wanted to keep my gold claim for
myself. But I did not neglect to invite Mr. Green
out to see the property and promised him a chance
to wash out gold with his own hands. He accepted
almost feverishly and we set a date for his visit.
That night my confederate and I sat up very late
loading shotgun shells with our loader. First the
powder and a wad, and then—gold; coarse dust and
small nuggets of gold. It was no small job for a
pair of tenderfeet to load a couple of dozen shells
in this way, but it was worth the effort, fear not. At94 Confessions of a Confidence Man
dawn we were astir. At intervals along the creek,
where there were perpendicular banks of soil, we
stood off a few feet and fired our golden shot into the
loam and clay or into the sandy banks of the stream.
It was raining slightly and the water obliterated all
scars in the soil that might have betrayed the enter-
ing passage of the precious charges. Thus Nature
assisted in the conspiracy.
Mr. Green came to visit us, driving a fine team and
bringing with him some forbidden liquids. He looked
over our sorry little camp with something of con-
tempt. Then we led him out to get some gold. We
explained that the gold had been deposited in earlier
ages by the stream and that it must be sought in the
marl and clay of the banks. If he would take his
shovel and cut down a few feet of bank he might
convince himself. Mr. Green went to work, cut down
some of the soil where we indicated, scooped up a
panful and wras instructed in the art of panning. He
learned quickly and soon delighted himself by washing
out a pinch of gold dust. He tried another location
and got even better results. He put in an hour till
the sun got too ardent for him. Then he sat down
under a great tree, uncorked a bottle and grew con-
fidential.
It did him no good. We flatly refused to let him
put any of his money into our enterprise. That,
you may well imagine, was not our game.
Green went away disappointed and I saw nothing
of him till the end of the week, when I again appeared
and turned over a few ounces of dust. He asked me
then if I would object to showing the claim to one
or two of his friends. I told him I didn’t like theGold and Greed
95
idea, and I really didn’t, for the calling in of out-
siders nearly always ruins even the best of schemes.
But there was nothing to be done, so I had to let him
bring two cronies. For their coming we again pre-
pared the creek banks by the nimble assistance of our
shotgun. In due season Green and his associates paid
us their visit, panned out enough gold to make their
eyes water, tried again to talk us into taking in a
partner and went their way disappointed.
I saw that Green was hot if ever he would be and
determined not to go near him till he sent for me.
Ten days passed before I heard from him and then
it was from an unexpected direction. I was suddenly
notified in a letter from an attorney that a claimant
had shown up to contest my title to my land. I was
not slow to understand, you can imagine, and hurried
to see the lawyer. He advised me that one Jack
Seward had engaged him to bring suit for the recov-
ery of the land which I had recently bought. My land,
it was explained, had formerly belonged to Seward’s
family, but had been neglected and finally sold for
the school taxes. The courts had frequently held titles
invalid when it was shown that the land had been
sold for taxes without the knowledge of the owners.
It was alleged that this had happened in my case.
“Well, what do you intend to do?” I asked.
“First of all,” said he, “we intend to enjoin you
from removing any more gold from Mr. Seward’s
farm. ’ ’
So, so! He knew about the gold! That meant only
one thing to me—that Seward, whoever he might be,
was merely a dummy employed by the cunning Mr.
Green. Who else knew about the gold? The mer-96 Confessions of a Confidence Man
chant had evidently abandoned hope of persuading
me to his ends and was ready now to trick me out
of my claim or to frighten me into a more reasonable
frame of mind—probably the latter. I made what
investigations I could and everything convinced me
that my surmise was right. I decided that two could
play at such a game, but I felt a bit uneasy. Green
was the big man of the town and not so many years
ago in the South local chieftains sometimes got away
with murder. Nevertheless, I went back to my camp
and let things develop. In a few days Green came
out to see me. He didn’t mention the fake claimant,
but came to make us an offer. He made it and I
laughed at him.
“Mr. Green,” I told him, “I think this land is
full of gold and I expect to get rich out of it. I don’t
want to sell, and I wouldn’t dream of dividing with
anyone. But since you’re so anxious I’ll make you
a proposition. I’ll sell you the claim and quit the
country for two hundred thousand dollars. If the
land is what I think you ’ll make a tremendous profit. ’ ’
Green sat for a time whistling and thinking. Then
he made up his mind.
“That might be all right,” said he, “if you had a
clear title. ’ ’
“My title’s as clear as any in this God-forsaken
country,” I spat at him, “and your fake claimant
doesn’t cloud it any.”
Green grew voluble with denials and protestations.
I sneered at him and walked away. Three mornings
later I appeared at his store and passed another bag
of gold dust over the counter. He seized the oppor-
tunity to resume negotiation. That was what I’dGold and Greed
97
wanted. "We talked for an hour and I reluctantly
came down to one hundred thousand dollars in my
demand. But we could not agree, quite as I had fore-
seen. For the next week there were almost daily
consultations between us. I saw that the old man was
more anxious than ever, and I was honestly getting
more and more nervous about his fake claimant and
the outcome of any contest in the courts. Besides, I
couldn’t afford to stay in North Carolina and keep
salting my claim perpetually. With a gesture of
weariness and disgust I laid my final offer on the
table—fifty thousand dollars cash for the claim or
an end to parleying.
“Too much,” said Green tersely.
“Very well,” said I, “then we’re done. I’m going
to wire my attorney in New York to-night and get
him down here.”
I went out, crossed the street to the telegraph office
and wired my attorney. I had previously written him
all necessary details and he knew what to expect. In
answer to my wire came a night letter asking me to
hold off a few days as he was dickering with ‘1 some
interested parties.” I knew that Green would see
these messages.
Meantime I went back to my claim and spent a
few days fishing. The following Monday morning,
however, I appeared in Green’s store with a bag con-
taining more than twenty ounces of gold—by far the
largest haul I had brought to his counter. He stared
and wanted to renew negotiations. I told him curtly
that we had closed that matter.
While he watched me I again crossed the street98 Confessions of a Confidence Man
to the telegraph office and sent my attorney in New
York this message:
“Bessie W. gained twenty ounces in two days.
Ready talk business and show goods if your people
are in earnest. Wire time of your arrival here. Have
local nibble.”
Early the next morning came this answer:
“Leave New York to-night eleven-forty-five. Ar-
rive Thursday four.”
As I left the telegraph office Green, who had seen
both messages, I felt certain, stopped me in the street,
dragged me into his office and stormed in this wise:
‘ ‘ If you want to get anything out of your claim you
and I have got to do business, that’s all. I want to
be fair with you, but refuse to let you skin me. 111
give forty thousand for your whole shooting match
and not a cent more. Take it or leave it.”
“I’ll take forty thousand and my expenses,” said
I carelessly.
“How much is that?”
“The trip, my equipment, the trip home, the land
and all the rest stand me about three thousand.”
‘ ‘ Take it and be damned! ’ ’
We went to an attorney and drew up papers which
were signed and witnessed.
The formalities over, we went to the bank. There
wasn’t enough paper money on hand to pay me, but
a messenger brought it from a near-by larger city by
afternoon and I was paid off. I packed the bank
notes awkwardly into my valise like any rude pros-
pector and went back to camp to pack up. That nightGold and Greed
99
my pal and I departed for New York, leaving forever
in our wake the Carolinian land of gold.
All of which goes to show that claims are still being
salted in this vastly enlightened twentieth century.
And so, my good Colonel Novena, the traffic keeps
up. Strange tides have washed up marvelous flotsam
on the shores of hazard since your time. Wondrous
birds have left your nest. We are not so beautiful
as you in these days, and Fifth Avenue is strangely
cold. Still we have accomplishments of a sort, and
perhaps even some graces which you lacked.CHAPTER VIII.
PATENTS AND PIRATES,
S a young man I, too, had a head full of
dreams. The admission may sound grotesque,
coming from a man condemned by his deeds,
the courts and his own confession. Dreams are the
vanities of the young, the pure and the poetic, are
they not? Well, at least I was young once. I some-
times think we all build our fortunes and misfortunes
of dreaming—the good and the bad, the poets and
the clods, the felon as well as the genius. There are
scientific gentlemen who contend that the hair is very
fine that divides the divinely gifted from the criminal
and the lunatic. I don’t know about that, but my
collaborator pertinently reminds me that it was that
great engineer and greater visionary, Ferdinand de
Lesseps, who perpetrated the vastest and costliest
fiasco of the nineteenth century at Panama. Here
was a dream that overreached itself, only to become
after a time a wonderful reality. As for me, I never
lifted my fancies into such lofty ethers, but I did a
lot of soaring of a sort.
All my life my imagination has wandered round in
the region reserved for the inventor and when I was
young there was high purpose in my thought. I was
never, let me hasten to add, one of those fanatic
simpletons who pester every community with their
101102 Confessions of a Confidence Man
absurdities, nor yet one of those guileless idiots for-
ever creating useless intricacies and expecting to find
the touch of Midas in a tin shoehorn. These people
are the rag, tag and bobtail of an idea that has obsessed
our countrymen for a generation—namely, that we
are a race of inventors. The genuine investigator,
technician, scientist, mechanician, discovered, has a
lively contempt for these unhappy people, for they
make the real inventor endless trouble and embar-
rassment. Whatever else you may say of me, let
this be understood: I was in my day a real inventor,
and that means something to me.
We do not often stop to think that invention em-
braces the whole mental side of human history or
that it is the complete stuff of progress. The first
ape that used a club, the earliest Neanderthal who
struck sparks from his flint arrowhead and nursed
them into fire to warm his cave, and the latest astro-
nomical expert devising some titan mechanism for
sounding the purple distances of limitless space are
brothers in invention. Invention of one kind or an-
other is at the basis of all civilization. Naturally, it
plays a great part in the life of everyone and the
dreams of everyone. The man who finds some new
principle of physics or some potent way of applying
an old one may change the trend of the world’s affairs
just as surely as a great thinker or a great conqueror.
That is the idealistic side. A man may make him-
self rich beyond counting through some simple useful
machine, and he may do it as easily as by finding a
gold lode or plundering Wall Street. That is the
practical side.
When I began there was more idealism than selfish-Patents and Pirates
103
ness in my fancies. Later the altruistic receded into
a shadow, and still later, I regret to report, the prac-
tical consideration became so developed that it left
me no sense of proportion. Here the con man suc-
ceeded the inventor. Many men have been over this
rough bit of road. It is all downhill and not hard
to negotiate, though one gets considerable jolting en
route.
Half the men born in America are incipient inven-
tors and the other half susceptible to the inventions
bug. Patents are the great national weakness. We
have all seen the mechanical wonders created by our
countrymen. We have watched some inventors pile
up vast fortunes from their works, and like good
human beings we have forgotten the others who did
not. As I have said before, natural resources, trium-
phant speculation and inventions are the golden trip-
lets of the popular mind. Even the most poorly
informed know that many patents yield no profits,
but they know, too, that most prospectors find no
gold. This fact does not diminish the average man’s
enthusiasm for gold mines. Neither does the shorn
lamb keep his brothers from the bleak winds of Wall
Street. To ourselves we are all wiser and cleverer
than the poor dupes who get fleeced—until we, too,
are clipped. Then we go back for more.
This pink optimism is a wonderful provision of
Nature. Without it there would be no speculation,
no credit, no business and no con men.
The socialist will tell you, to be sure, that he has
a scheme to change all this, but I think him something
of a con dealer himself, and meantime the world is
as it is. It was to explain and expose some of the104 Confessions of a Confidence Man
fraudulent intricacies of this world of reality that
I set out. Perhaps I shall be able to save some men
from the toils of con. Enlightenment cannot but do
some good.
A dozen times every year I see the old familiar
literature of the inventions-scheme stock salesman.
You know it, all of you. It starts out by calling
vociferous attention to the huge profits made by those
who bought the original stock in the telephone, the
automobile, the talking machine, the air brake, the
adding machine, the typewriter and what not. It
winds up by inviting you to share the gains in some
new wonder. - Great and potent argument, this—hav-
ing led many a sucker to his fate.
Now it is far from my intention to brand all inven-
tions-stock promotions as frauds. Here and there
these things really pan out. But I do mean to point
out the extreme rarity of this happy dénouement, and
I intend to recite a number of typical fraud schemes
so that you may recognize them when they come your
way. I do not even mean to say that all men who
promote inventions that fail and lose money are scoun-
drels. More often the man behind such schemes is
.an inventive dreamer with a genuine mechanical and
financial vision swimming before him. But the man
is full of a most uncertain urge. When—rarely—he
succeeds he becomes what he dreams himself—a scaler
of strange new heights. But far oftener he sinks into
unforeseen bogs, led by his own ignis fatuus. And
he carries down with him those who gave him their
faith and money. Further than to utter a general
warning, I have nothing to do with these honest
dreamers. My function is to deal with con as appliedPatents and Pirates
105
to real or fake inventions and to show how a certain
class is constantly victimized through machinations in
this field.
The con man can always find a list of the profes-
sional men of any city. The directory and telephone
book are as good for this purpose as anything else.
Thus he needs go to no trouble in preparing a sucker
list if he has a scheme for the palate of the doctor,
the lawyer, the dentist, the editor and writer, the
technical man and the engineer. Moreover, such
people are always accessible. A man may call to
have a tooth pulled and stay to play a con game.
But this is not the only charm that attracts the con
man to professionals.
A little knowledge is a dangerous thing, as the
lady motorist remarked on regaining consciousness.
The average professional man possesses that perilous
little knowledge of many subjects alien to his imme-
diate calling. He has nearly always some idea of
the working of mechanical and electrical devices. He
is progressive, informed, sanguine. He feels the kin-
ship of the quasi-scientist with the sciences. But he
is seldom well enough equipped to discover the fraud
lurking deep in the dark vitals of a new idea. Thus
he is an excellent target for arrows of con. Some
sharpers who deal solely in inventions tricks play
to the professional man exclusively, so that millions
have been mulcted from this class and other millions
are still being extracted—painlessly in the dental
sense. All of which reminds me-------
The owners of the six million automobiles which
have put the country on wheels more completely than
ever before will appreciate that winter is a bad season.106 Confessions of a Confidence Man
Not the least of its disadvantages is that it will freeze
up radiators and crack water jackets. It makes cars
hard to start and car owners difficult to live with. I
discovered all this a number of years ago when I
operated my first car through my first Northern win-
ter. Some men would have stood by, paid for the
repairs and taken it out on the air in profanity and
their wives in bad temper. I decided that there were
ways of keeping radiators from freezing or chilling
and I set about inventing the proper device. When
I began I saw the commercial and not the con possi-
bilities of the idea, but I was ever an unstable fellow
in such fine distinctions and discriminations. At any
rate, I conceived and constructed a perfectly honest
little mechanism like a large porcelain electric switch.
This device I connected with the batteries in the^car.
By sending the current from the batteries through
this resistant element I engendered heat enough to
keep things from getting too cold while the car stood
out.
Now all this was excellent and sounded feasible.
In practice the thing wouldn’t do at all. It used up
the current from the batteries, whose capacities are
very limited, so that there was not enough juice left
to run the lights and start the motor. This trouble
could, it is true, have been overcome by greatly aug-
menting the number of cells in the battery. Here,
however, the expense would have mounted quite high
and the whole device was, after all, no more effective
than the simple plan of putting alcohol into the radi-
ator tank with the water. My invention was not
worth the trouble of inventing—and I knew it. That
is another matter.Patents and Pirates
107
I was still experimenting with my radiator heater
that winter when I became aware of the existence of
a dentist in my neighborhood who seemed to be hugely
prosperous, drove two high-priced and high-powered
cars, was a leading spirit in the sporty life of the
community and let himself be seen to advantage when-
ever possible. I wondered in my dull way how came
this dentist to be so extremely well dowered. Nothing
more crossed my mind at the time.
Then a filling came out of a tooth and I went to
him for repairs. Nor was I long in discovering his
source of wealth. My dental friend supported elabo-
rate offices with much very-modern equipment, several
extra diplomas, the word “surgeon” put before his
normal professional description—and he charged for
all the frills. I thought it well to cultivate a man
who understood so profoundly the making of money.
Still without any plot against him in mind, I con-
tinued to visit him and become acquainted. One very
bitter morning I walked into his offices to find him
blustering and swearing about one of his cars. It
had frozen tight the night before in his garage, the
water jacket had burst and the repair man informed
him that his bill would be one hundred and fifty
dollars.
“Almost as bad as losing a filling from a tooth,”
I told him, but he was in no mood for jesting.
“Confound it!” he cried, “why don’t they make
motor cars that don’t freeze?”
“They will when they learn how,” said I.
“Is there a way?”
I told the doctor about my neat little invention
and he was moved almost to enthusiasm. He used108 Confessions of a Confidence Man
many electrical appliances in his surgery, he under-
stood mechanics fairly well and had the amateur’s
respect for the wonders of electricity. I saw at once
that here was both a doctor and a morsel for my teeth.
The next afternoon I drove him out to his country
club in my car, which was much less costly or impres-
sive than either of his. We spent a couple of hours
round the nineteenth hole while the car waited in a
zero temperature. Since I had put my batteries into
first-class shape that very morning, everything went
off beautifully. We walked out of the club, jumped
into the car and were off without delay. My new-
found friend was really overwhelmed.
“Why don’t you patent it and get down to manu-
facturing?” he demanded as we drove homeward.
“Patents cost money and so do plants to work
in.”
“That oughtn’t to be hard to get.”
“Not for you, doc,” I told him. “All you have
to do is to charge. The more you stick us the better
we like you. The difference between a good man and
a bad one in the professions is in the fee. But with
me it’s different.”
“How much will it take?”
Here I fenced. I didn’t want a few hundred or
a couple of thousand to get out patents and rent a
little factory. If my prosperous friend was to be
taken in he was worth taking in for some respectable
amount. I always believed in doing things well.
“I guess I’ve got enough money to get out my
patents and start in,” I told him after a silence.
“With all the cars there are in this country a man
ought to make a mighty pile out of this thing if it isfrtnm 11111111111111111 ■■iniiiii
Patents and Pirates	109
as good as I think it is. I don’t see why I should
divide it.”
We said no more about the thing at the time, but
the effect I had expected from my attitude was already
being produced. Nothing makes a man so anxious to
put money into your invention as your apparent desire
to keep him out. It is one of the rudimentary rules
of con to shift the anxiety upon the other fellow. If
the schemer succeeds in this his game is made; if he
fails there is no play. You can’t push a man into
an investment of any size; you must make him break
in. That was what I was trying to do here.
Meantime I went ahead, applied for a patent and
got it, like thousands of simpletons who take out
useless patents every year—for the benefit of lawyers
only. Now I was in a position to talk business. When
I saw my friend again he began with the expected
questions and approaches.
‘‘Well, it’s like this,” I told him. ‘‘I will take
you in on one arrangement. I’ll sell you a half
interest for ten thousand dollars. I don’t want you
to go in unless you’re satisfied with the heater and
I want you to think over the possibilities before you
invest. ’ ’
“Well, what’s your idea?”
“The only way to test this thing,” said I, “is to
try it out on a car. You can run my car for a week
or I’ll install the device on one of yours and you can
try it out.”
Before I suggested this I had taken the natural
precaution to put into my car an expensive extra-cell
battery, capable of running the heater and still fur-
nishing electricity for the lights and motor. I pointed110 Confessions of a Confidence Man
out to the dentist that my ear -was already equipped
and there was no need of spending extra money on
one of his.
We swapped cars for a week. My heater stood
up, as I knew it would. Why not—having cost about
three hundred dollars to equip it?
My man was more than satisfied. Now he wanted
to know only what the device was and how costly it
would be to manufacture. He didn’t ask about install-
ing or equipping or about larger batteries—and I
somehow forgot to explain these matters. Instead I
showed him the simple porcelain device and explained
how it was merely hooked up to the battery and
engendered heat by establishing a resistance. It was
patent to any eye that such a thing could not cost
much—a dollar or two at the outside. My dental
friend was not slow to let his greedy mind grasp the
supposed situation. Here was a cheap and simple
device which did away with an almost universal cause
of annoyance and expense to motorists. And we had
it under patent. Ergo, we could manufacture it and
sell for whatever price we liked.
I did not try to'fclose a deal with this man then.
Instead I sent him off to consider again. When a
man put his money into patents he was taking a risk,
I warned him, though none too insistently. Of course,
I went on, in a case like this the chance of loss was
small. It seemed here was a thing in constant general
demand, a thing for which there was really a crying
need, and with the millions of cars in use there ought
to be no lack of a market.
Three evenings later I went to see the tooth sur-
geon in his office. I found him sitting at his desk withnatmBBBmsaaaaa
Patents and Pirates	111
a newspaper almanac before him. From this valuable
compendium he had learned that there were then close
to four million cars in the country. On this total
the doctor had based some interesting if pathetic cal-
culations.
P “Crosby,” said he with a wave of enthusiasm as
I sat down near him, “I’ve got this figured out and
I don’t see how we can lose.”
“I don’t myself,” said I—with a mental emphasis
on the last word.
“Why, there are four million cars in the country
and every car will have one of these heaters! We
can certainly make them in quantities for less than
a dollar apiece and sell them for ten or twelve.”
“Easy,” said I.
“That means we ought to clean up millions,” he
went on.
“If it’s handled right,” said I—always the con-
servative.
“We’ll handle it right, don’t worry.”
“Well, you’ll never have to complain of me on
that score,” I assured him. “If you come in I’ll put
the thing into your hands.”
I walked out of the place with the check in my
pocket, and the bank seemed a long time in opening
the next day. Then there were delays. I came up
against small problems. My second model did not
seem to work so well. I put off leasing a factory till
I might experiment further toward a perfect device.
Then my health got bad. I had to go away for the
summer. In order that all might seem correct I turned
over the full rights, with my models and dies, before
I went away. I wanted the dentist to be in full pos-112 Confessions of a Confidence Man
session, so that whatever happened to me he would
be protected. He thought it highly honorable of me
at the time, though I fear he later changed his opinion
—which I regret.
There was no glory and no credit in such a fraud
as this and I put it down here only to show a typical
case of self-delusion on the part of the very numerous
class of men who know just too little and too much
for their own good. It is this smattering of strange
knowledge that undoes so many professional men and
makes this class a byword with the con man who has
an invention scheme.
Men with some sort of education, excellent in its
own field but deficient in others, are prone to believe
in the wonders of science and invention, and they
are right. They have seen the distant nations brought
into each other’s arms by the railroads, the blue im-
mensities of the seas dwarfed by fleet ships, the anti-
podes harnessed to instant responsiveness with chains
of cables, the voice of man sent vibrating through
thousands of empty miles, the air yielding to man-
made wings and the very abysses of sidereal night
glowing in the light of human eyes. These men know
that nothing is impossible to the brain and the spirit
of man. What they forget is that there are men and
men—and con men.
But if I have laid down the general proposition that
the professional man has an attraction for the inven-
tions fraud and this fraud for the professional person
it is by no means true that only this type of scheme
is worked. For instance:
One hot morning of a recent spring, just after the
close of the war, three substantial-looking men trickedtflBjr'TTTininiiiiTiT'TrTi—rrnii
Patents and Pirates	113
out by Eastern tailors appeared in a certain Middle
Western packing metropolis and rented an office in
one of the foremost buildings. Here they installed
themselves with an imposing array of furnishings and
several stenographers. In a few days sheafs of letters
began to go out from this office to the professional
men of the city whose names had been gathered from
the telephone directories. These letters called the
attention of their recipients to the very high prices
being paid for pork, to the alleged shortage of that
meat, to the fact that swine had been almost extermi-
nated in parts of Europe, where they would have to
be replenished from the meager American supply, and
to the money-making opportunities contained in the
oily sides of porkers.
In a few days a second batch of letters went for-
ward to the same addresses. Then followed a stream
of circulars, each taking the recipient of this mail
canvass a step farther in his acquaintance with a new
and somewhat novel industry. Finally came to each
addressee a letter which made a proposition and
tempted a reply. I need not assure you that many
replies were sent. And within a day or two a sales-
man appeared.
*i Doctor, ’ ’ said one of these solicitors as he stepped
into the office of a locally well-known physician, “I
come from our company in answer to your letter. I
thought it better to see you in person.”
“I’ve been interested in your literature,” said the
man of medicine.
‘ j And would like to know what our proposition is ? ”
“I don’t mind.”114 Confessions of a Confidence Man
The salesman took a seat, got out his sheet of calcu-
lations and began.
“Our first purpose,” said he, “is to foster the
growing of pork. Our literature has already made
clear to you that there is a world shortage and that
prices for this meat will be veiy much higher within
the year. The average farmer is raising w'hat hogs
he can, but the situation demands that others be in-
terested—and there is money to be made. Now what
we offer is to sell you a contract for one hundred and
fifty dollars which calls for the ownership of one
brood sow. Of course you may buy one or as many
as you like. You are, to be sure, not a stock raiser,
but we are. We take the sow off your hands. In
fact, you never come into contact with the beast. We
give you a certificate of ownership and our contract,
which liberally safeguards your interest. Then we
allot to you as many sows as you may buy. We keep
them on our farm, breed them, raise the pigs, sell
what we think best, as the market happens to be up
or down, and we turn over to you one-half of the
profits. The rest we retain for our services in the
matter. In this way you can become a stock raiser
without any of the inconvenience, and you get in on
the big money that is bound to be made in hogs.”
The glib canvasser paused to catch his breath, while
the doctor reeled.
“But,” objected the latter, “I don’t know anything
about stock raising. How can I tell if this is a good
investment ? ’ ’
“You evidently didn’t do our letters and circulars
the honor to read them,” said the salesman, sailing
in anew. “It is self-demonstrating that hogs willPatents and Pirates
115
pay big money at twenty-two cents on the hoof when
the farmer formerly got rich out of them at five and
six cents; that’s common good sense. Also it isn’t
hard to see what class has been getting rich through
the war; not the doctors and lawyers”—to which the
prospect readily agreed. “The farmers have been
getting undreamed-of prices and piling up money as
never before. The bank balances in rural states like
Kansas have never been so high. Never have there
been such sales of automobiles in the farming districts
of Iowa and Missouri and Illinois. The farmer is at
the highest point of prosperity, and mainly through
wheat and hogs. Now what I offer you is a chance to
share these riches with him.”
“Show me,” demanded the physician.
“Easy,” responded the salesman. “You know, I
suppose, that a brood sow bears two litters a year and
that the average litter for good swine is eight. Thus
a sow will bring sixteen pigs into the world in a year.
Let us reckon that half of these pigs are males. These
are fattened for the market and sold. Half of what
they bring goes to you. You then have left the origi-
nal brood sow and her eight female offspring. I speak
in terms of averages. In other words, you will likely
have nine brood sows the second year.
‘ I Carrying our calculations a little further, each one
of these sows should bring forth about sixteen pigs
in the year. Thus at the end of the second year you
should have nine adult sows and one hundred and
fifty-four baby pigs and pigs of six months. Now
we can discount this for losses through disease. It’s
always best to be conservative. Let’s say that we
have a total of one hundred swine at the end of two116 Confessions of a Confidence Man
years. "We have now already sold eight young male
pigs and on the same average we would now sell fifty
more. Thus we would go into the third year with
fifty sows. I need not go further. With any kind of
pig bringing from eighty to one hundred dollars in
the market, you can see that by that time you will
have sold from four thousand to five thousand dollars’
worth of pork and still have fifty sows left, which
should give you eight hundred pigs in the fourth year.
And the original investment is only one hundred and
fifty dollars.”
In a few weeks these three schemers and a few
extra salesmen, whom they employed when trade war-
ranted it, took in three hundred and fifty residents
of this town, nearly all of them professional men and
women, who seldom are close calculators.
The business had been started without an acre of
farming land or a single sow. With the money pour-
ing in it was necessary to rent a farm and acquire
at least some swine. This was done at no great out-
lay. Forty or fifty sows were more than enough.
The men who had paid for contracts covering the
ownership of sows were not stockholders in the com-
pany and had no access to the books. As long as there
was any sort of farm and a single sow on it this
animal could be passed off on any number of contract
holders as the sow purchased. More than that, what
was to prevent the cholera from sweeping away the
sows and broods? Who was to keep books on the
feed used and the upkeep expenses of the farm?
When six months or a little more rolled round each
purchaser of a sow was to be informed, according to
the plan, that he was the owner of a brood of sevenPatents and Pirates
117
or eight or ten pigs, whether there were any broods
or not. If he became excited and bought more sows,
well and good. That was what was expected of him.
If he sat tight disaster shortly overtook his stock and
he was wiped out. A modern application of a very
ancient type of fraud.
It wasn’t long before the professional people of this
city woke to the realization that they were not stock-
men. At about the same time the police became
convinced that the three gentlemen in their imposing
office were con men. But it was too late to do much.
The farm was deserted. The few sows had been sold
off, the gates closed and the pork impresarios had
flown. And with them the lardy dreams of many
innocents.





win


*»• »v-
s®

fi




is



'\W
CHAPTER IX.
THE COLOR OP ROMANCE.
WHOEVER has loitered at the great seashore
and mountain resorts has seen about the
hotels and pleasure pavilions certain lovely
and slightly mysterious ladies. They stroll up and
down the walks and the beaches, they drape them-
selves in the lobbies, swim about at the balls, gambol
in the waves, but neither do they toil nor spin. To
some they act as introducers and promoters of ameni-
ties. They do not flirt—precisely. Neither are they
at all unapproachable. Usually they seem to be de-
tached, though perhaps noticeably friendly with one
or more impressive-looking men, likewise playing the
dolce far niente. Dames d’industri&f I should call
these sibylline ones, or—if you like—ladies confiden-
tial. Their male familiars are con men.
The employment of women in the affairs of sharpers
is old as the world, I suppose. Their original func-
tion was that of attraction. To the modern schemer
they act as introducers on the well-known principle
that a respectable and cautious man will rebuff a
strange man and pursue a strange woman. These
ladies are taken to various resorts where men of posi-
tion and consequence and women wfith means spend
their leisure. They pick up the acquaintance of both
men and women and shortly introduce to their prom-
119120 Confessions of a Confidence Man
ising new acquaintances the polished rogues who are
lurking in the background. Then the game is on.
The standard type of fraud then perpetrated is
nothing more ingenious than a crooked gamble. I
know a dozen or twenty of the most skillful card
manipulators, faro swindlers and poker sharpers in
the country who long since deserted gambling in its
older form in an established house of chance for
crooked gaming at the resorts, with respectable per-
sons lured into the play by means of these women.
Palm Beach, Atlantic City, Miami, Saratoga, the
Southern California resorts, and even religious Asbury
Park, smiling under the priestly adjacence of Ocean
Grove, are patronized and victimized by these schem-
er's in their seasons of frivol.
Wherever the scheme is not a gambling trick, some
such stale device as the sick-engineer game is employed.
No one at all familiar with such trickery will have
forgotten what havoc was played up and down the
Atlantic Seaboard some years ago by Chappie Moran,
Larry Summerfield and Sam Giroux, abetted by
several charmers. When these gay picaroons met—
through their women—a man or woman of substance
they unfolded the tale of the sick engineer owning
stock in a certain mine and soon induced their dupe
to buy the stock under the pretense that it was highly
valuable or immediately salable at a high figure.
Neither is New York likely soon to forget the St.
Louis pawnbroker who was gambled out of nearly a
hundred thousand dollars at a specially fitted club,
where the victim believed he was playing a fixed poker
game against five or six of the most notable million-
aires in New York. These other players were, to be121
The Color of Romance
sure, only con men dressed and disguised to look like
well-known rich men.
The substantial professional man is the ideal dupe
in all these games employing women. In many ways
he is the most careful of all his fellows when it comes
to questions of his good repute. If he can be com-
promised even slightly—a thing which these plotters
always manage to bring about—he is certain to keep
his counsel. No squeal results. But this is usually
not even necessary. The physician or especially the
lawyer, cannot afford to advertise himself as a fool.
Such rashness would cost him much more than the
conspirators have taken. He throws up his hands
and decides he will be wiser next time. But con
games are various and often bear no visible similarity
to each other, so that the same man has often enough
taken the venomed apple twice.
A few years ago a wealthy man from one of the
eastern cities went down to Palm Beach for the win-
ter. This man was a widower with grown and married
daughters. He was experienced, worldly, something
of a vivant and to his own mind a connoisseur. He
never spoke of an incident in his earlier life that had
to do with his deception through one of the crude old
mining-stock games. Pew men remembered the inci-
dent, but a certain confidential person of my acquain-
tance did. Long and accurate memories are desirable
in our picaresque profession. My friend decided that
this man could be duped again and he followed him
south—a hawk in the wake of the goose.
In his rococo hotel at Palm Beach this man soon
set his eye upon the person of a decidedly elegant
woman whom he encountered in the dining room, the122 Confessions of a Confidence Man
elevators, the lounge, on the beach—everywhere. She
was a tallish, dark, distinguished-looking person, past
thirty perhaps, but still very youthful and beautiful.
Her manner was always correct, her dress costly, her
look invariably a little melancholy. She was alone,
save for a maid, and the elderly gentleman judged
that she was recently widowed. After a week he man-
aged to have himself introduced by one of the genial
guests in the hotel, whom he never stopped to suspect
of being a confederate in any machination against
him. Indeed, he had gone to so many subterfuges
before he succeeded that he never could be convinced
of the truth.
Mrs. ----- permitted the attentions of the mature
gentleman. He asked her to dine with him, as she
was alone and looked lonely, and she accepted. He
took her motoring and she decorously brought her
maid along. When he asked her to make a fishing trip
with him she was happy to be one of a party. He
decided after several exhibitions of this circumspect-
ness that the lady was a person of breeding and posi-
tion. She had not told him so. Indeed, she had told
him nothing of herself. In the main it was not neces-
sary. He had eyes and perception.
In the beginning the victim was inclined to rush
his familiarities a little, but a series of the gentlest
and most tactful rebuffs soon enlightened him. Next
he tried extracting confidences from the aloof Mrs.
■----. She smiled sadly into his eyes and begged him
not to speak of her affairs—for the present. He re-
spected what he considered her grief. With the flight
of the weeks, however, the man felt himself slowly
growing into the. woman’s graces and confidence. He123
The Color of Romance
did not perceive that she was sending roots into his
middle-aged heart.
One night when they sat at the end of the long
pavilion watching the great lamp of the Southern moon
stream upward out of the mighty phosphorescence of
the sea the wonder and witchery of the provocative
South got hold of him.
“Won’t you tell me who you are at least?’’ he
urged, idling with the fringe of her wrap.
“Just a lonely and unhappy woman,” she said
softly.
“You are much too young and lovely to be either.”
She sighed, looked into his eyes and away into the
flaming ocean.
“You know I am too old a man to be sentimental,”
he resumed, “but something about you touches me.
I think whenever I see you this way that somebody
should do something for you. I suppose it’s natural
to tell myself that I’m the right person.”
“I’m afraid no one can help me much,” she said.
“Let’s not talk of it. Let’s just be happy—or pretend
to be.”
The moon rose fuller and higher, the breath of the
Gulf made warm murmurs in the palms, the sea played
on the sands its amorous arpeggios. The staid and
careful gentleman was caught in a resurgence of his
dead youth. He declared himself.
The lady sat with him late into the night, listening
to his pleading, holding him off, verging on tears. At
last she kissed him lightly and turned away.
“I should never have let you speak,” she told him.
“I did not know things were going so far. I have a
husband. ’ I124 Confessions of a Confidence Man
The man was silent as they walked back toward
their hotel. He considered, hesitated and plunged.
“Does that matter if you are unhappy with him?”
he asked.
She looked at him with a little start of surprise.
“You mean------”
“Marriages are not indissoluble.”
She left him on the veranda without an answer.
Half the night he walked up and down the sands,
feeling himself a lover and wondering if he might
not be a great fool.
The next day Mrs.-----was very tender and sadder
than ever. Her husband would arrive in a day or
two. That was why she had been more depressed
lately. When he came perhaps she would not be able
to see her friend at all, but she would try. They
must be careful.
“Did what I said last night offend you?” he asked,
again under her spell.
“Offend me!” she purred. “I wish I were free
to talk.”
The husband came, a rather sharp-faced, blustery
person, but still a man who looked as though he might
amount to something. He spent very little time with
his wife, treated her shabbily, even seemed to be quar-
reling with her under his breath in public. His at-
tentions seemed to center rather on several young
New York actresses who were showily disposed on the
beach every day. And at night he was off gambling
or somewhere else. His wife confided her suspicions
to her ardent friend, who urged her to get evidence
for her divorce then and there. She demurred. She....................I lllllHI■lllllll■■l
The Color of Romance	125
would not take such an advantage of a man she had
once loved.
The thing wore on and the delay made the intended
victim wTild to have something done. The more he
saw of Mrs.----the more he was determined to win
her. He found out that her husband was a promoter,
often of questionable enterprises. The wife said her
husband’s manner of making money was one of the
causes of their unhappiness. Little by little she re-
vealed the story to her admirer and slowdy guided
him toward the climax.
One night at the end of the same pavilion, with the
same moon swimming overhead, she confessed that she
loved the aging wooer. At the close of an ecstatic
evening she unfolded a plan for being rid of her
spouse. He was even then promoting a fraudulent
oil company. The thing was going slowly and he was
hard up. He would likely enough try to get her new
friend into his scheme. Wouldn’t it be a good idea
to put a sum of money into the venture with the pur-
pose of exposing the scheming husband, catching him
foul of the law and thus forcing him to permit a
divorce ?
The idea struck the Northerner as brilliant. How
had she thought of it? But that was a silly question.
Since when had women not known how to achieve
their desires?
The husband now began to lay his snares, and his
victim--|milingly—played his part and hurried the
game along wherever he could. He was not a little
perturbed one night when the supposed promoter came
past the end of the pier which had come to be the
lovers’ retreat and caught him and Mrs. ---- in a126 Confessions of a Confidence Man
tender tableau. It was innocent, but the widower
trembled a little. The promoter greeted them, made
a cynical remark or two and went on.
“I think he knows,” she said. “But he is bad—
thoroughly bad. He will gladly sell me if he can
get what he thinks I’m worth.”
The old gentleman was a little frightened. Some-
thing warned him to desist, but he was too tight
caught. He continued to deal with the promoter.
Finally it came down to the amount he was to invest.
He hoped to get off for a few thousands, but was
coolly told that it would take one hundred thousand
dollars to start the oil business going. It was too
strong a blow to his resources and he refused.
That night Mrs.-----wept on his shoulder.
“Take me away! Get me out of his hands some-
how!” she pleaded. “What does the price matter?
We can go away and be happy. You will have plenty
left and can make more.”
Finally, infatuated out of all senses, he agreed to
put sixty thousand dollars into the oil promotion. He
drew on his home banks, got the money to Palm Beach
and* was ready to pay. But once again his caution
stopped him. At the last moment he drew back and
refused to close.
The promoter immediately came the hurrah on him.
He announced that he was about to leave Palm Beach
and take his wife with him. That night at the end
of the pier Mrs.----bade her chaste and aging lover
a tearful and reproachful good-by. She would never
see him again. He did not want her enough to take
her when she could have been his. She thanked himThe Color of Romance
127
for the little while of hope and happiness and went
back to the hotel.
In the morning the dupe waylaid the oil promoter
as he descended in the elevator. The man had lain
awake all night. He could not break from the woman.
In ten minutes he had paid the demanded price.
The promoter departed without delay, but not until
he had hinted, unmistakably, that he understood what
had been done to him. The aged widower sent him
off with defiance and the promoter went with a cyni-
cal smile.
At the end of a week Mrs.------was ready to travel
north, where she wTas to arrange matters for the com-
ing exposure of her husband. It was deemed better
that she be at a distance, for the sake of appearances,
when the victim of this duplicity came with his de-
mand on the promoter. There was a farewell at the
end of the pier—under a gibbous moon, one is prone
to fancy. The next morning he found a long letter
from the charmer in his hotel box. It had not come
through the mail.
When the astute Northerner had finished reading
this remarkable letter he went out and spat helplessly
into the sea. The woman told him with regret that
she-had duped him. She wras under an almost hypnotic
sway. She did whatever her husband commanded.
Could he be a little sorry for her? She was so un-
happy. But perhaps it was better so after all. A
man of his character would never be happy after he
had deliberately bought the wife of another man.
The last words sank painfully into his brain. That
was what he had been doing. He was helpless to com-
plain or prosecute. He walked up and down slowly
128 Confessions of a Confidence Man
on the sand, wondering whether two months of boot-
less flirtation might be worth sixty thousand dollars.
But it probably is true that professional men are
less subject to romantic attacks than many other types.
If such games as the foregoing are often designed
against them, it is because they are known as close-
mouthed fellows and give less trouble than the run
of humanity. The invention remains the ideal over-
persuader for the technical man, as I shall show.®
Three or four years ago I completed a number of
experiments with .the selenium cell as applied to the
phonographic motion picture. The idea is an old one
and persistent. Many leading inventors have worked
on it, and we read announcements of its successful
discovery every few weeks, but nothing practical has
come of it to date.
To this problem I applied myself. I tided to solve it
by recording sound waves on the edge of the film with
the aid of photography. The record would appear in
the form of successive long or short linear shadows.
With the aid of a selenium cell I now energized a
bi-polar magnet or magnets, which vibrated a dia-
phragm and set sound waves in motion, reproducing
the human voice in correct time with the picture.
Perhaps it is well to explain that selenium is a chem-
ical element which is highly sensitive to the force of
light waves. It is a conductor of electromotor force
and its conductivity varies according to the amount
of light played upon it. Some authorities say that
the conductivity of selenium may be decreased or
augmented five hundred times. It will be seen how
this substance figured in my invention.129
The Color of Romance
After long and quite costly experiments with this
device I came to the stopping place. I perfected it
as far as human ingenuity could bring it. Then I
came up against a physical fact, as men will. I man-
aged to record the voice on the edge of the film and
I reproduced it perfectly and in exact time -with the
picture, but---the sound was not reproduced with
sufficient energy to be of any use. It could be heard
close at hand, but when it came to amplifying the
sound I discovered that the force was too weak. Extra-
powerful amplification resulted merely in loud words
without tone shading. I was simply up against it.
My wonder was a flivver.
However, my experiments had cost me several thou-
sand dollars. And in thttje days I had the bad habit
of getting my money out of things one way or the
other. I looked about for a likely way of exploiting
my burst bubble and soon discovered in a large city
lying on one of the lines between New York and
Chicago a physician who was a specialist in electro-
therapeutics. I knew from other men in my line that
he wTas a sucker buyer; in other words, he had money
and often took flyers in the most dubious of stocks.
No sooner discovered than approached.
I moved my apparatus and a confederate to the
home city of this medical gentleman, established my-
self in a couple of modest rooms and wrent off to
consult the physician about my left foot. I had
suffered from gout a few years before, owing no doubt
to early trials and denials. It was true I had not felt
an enemy twinge for a number of years, but the gout
was as good an excuse as any. I told the physician
that I had heard of his wonderful cures and wanted130 Confessions of a Confidence Man
Jiim to do something for my gout. It was not bother-
ing me just then, but it did make trouble at times.
He had quite an establishment, with a great array
of electrical equipment. All thi91 admired and talked
about with glib familiarity. He was a stiff and pomp-
ous man, distant and ponderous, but he was for all
that the more susceptible to flattery. By my third
visit and third cash payment of his heavy fee I had
disarmed him and he talked electricity with me. I
gauged him carefully, for it is bitterly uncomfortable
to catch a tartar who knows too much. He knew
electricity from the medical side only.
Each time I went to see him I talked more and
more freely about electricity, and he followed, a little
piqued at my knowledge, but glad to talk with a man
who knew something of his hobby. The doctor was,
to be sure, taking my money and treating me right
along for an ailment I didn’t have, but that was part
of his game and I believe every man has the right
to play his cards. I meant to play mine.
One morning I sailed into the therapeutician’s office
brimming with delight. I had just had great news.
The doctor was sympathetic and curious and I un-
folded my yarn. I had for some time been financing
in a modest way a man who had a wonderful elec-
trical invention under way. This very morning we
had evidently hit success. I explained my talking
movies to the doctor and he was delighted with the
idea.
“Think what a thing like this means!” said I rap-
turously. It will knock out all the cheap movie
dramas where there is nothing but crude physical
action interspersed with idiotic captions. It willThe Color of Romance
131
mean that as good plays can be had on the screen
as on the stage.”
‘‘That’s true,” said the physician.
“But that’s only one field,” I went on rapidly.
‘ * Think of the value of such a thing for disseminating
clinical lectures! It will now be possible to photo-
graph an operation or a chemical or physical experi-
ment and at the same time to record the words of the
lecturer. By this means university extension work
can be magnified to an undrcamed-of point.”
The physician stared at me in amazement.
“Remarkable!” he said. “No telling what changes
such a thing will bring.”
“And think of the personal appeal of such a thing!”
I enthused. “What is to keep people from making
complete records of their children by this device,
recording not only their appearance in moving pic-
tures but their voices, from the prattle of the baby
to the wheezing of the old man?”
“And you mean to say you have got such a thing
perfected?”
“All but the final details.”
“By heaven, I’d like to see it!” he said, warming.
Here was the heading-in point—that invariable
piece of con technic. I had to seem unable or unwill-
ing to show the thing in order to set any suspicion
that I might have an object in telling my doctor
friend of this marvel.
I temporized. The inventor was one of those pecu-
liar taciturn Germans, suspicious of everyone, even
of me. But I would see what could be done.
I now rented a little workshop for my confederate,
who was in fact just enough a German to play the132 Confessions of a Confidence Man
part successfully. Here we set up the talking movie,
scattered about a lot of grimy tools, put in two kinds
of electric current, set up a work-bench, a lathe and
other appurtenances of an inventor’s shop and were
ready to demonstrate. To the victim I pleaded that
my inventor was obstinate. The more I delayed the
more the physician’s curiosity was roused. Finally,
wThen he had heated himself to the proper tempera-
ture, I took him to the -Í2 factory.”
We had, as I have indicated, a short dramatic reel
on whose edges I had recorded the supposed voices
of the actors in the manner explained. This part of
the thing was perfectly honest and correct.
The doctor sat down in the darkened shop, I took
a place near him and my partner ran off the reel.
As the scenes flashed on the screen the voices of the
actors could be heard. One had to listen carefully,
but there was no mistaking the fact. The picture
talked in perfect synchrony with the action and the
effect was not short of astounding.
“Now,” I said to the doctor when the demonstra-
tion was at an end, “this thing is not yet quite com-
plete. You noticed, no doubt, that the voices were not
loud enough for ordinary purposes. You understand,
being a man of science, that this is merely a matter
of amplification, just as in all talking machines.”
“Of course,” said the accommodating gentleman.
“Don’t you remember the first phonographs—how
almost inaudible they were at any distance ? ’ ’
“And to-day they’ve got to the point where they
drive you out of a neighborhood,” I laughed.
“All a question of perfecting the amplifier,” said
he.133
The Color of Romance
The physician wanted to inspect the machine and
go carefully into the scientific principle, but my al-
leged German inventor immediately showed signs of
displeasure. I nudged the doctor and took him away.
“Don’t ever make a break like that again!” I
whispered as we went out the door. “That crazy
Dutchman will think we want to steal his machine.”
The doctor laughed and then grew thoughtful. At
his invitation I drove out to his home and spent an
evening explaining the technical principles of the
thing in detail. He was enchanted. I visited him
almost every day for a week and each time I talked
more about the invention. He was a little silent and
I fancied I knew what was going on in his head. Sure
enough, when I was about to take the plunge myself
he came to the point. Did we have enough money to
develop this thing as it should be done?
“No,” I said frankly, “but that Dutch ape thinks
we have. He doesn’t want to let anyone in. ’ ’
The doctor again was thoughtful. And I left him
to his own mental yeasting. Though my treatments
were at an end I ran in often to see him—with nothing
special on my mind, it seemed. The man was restive
and I saw to it that he didn’t recover. He saw profits
coming and wanted to share in them. One day he
came at me out of a clear sky.
“Do you need that inventor?”
“No-o-o,” I considered. “He’s got it to the point
now where I can probably do all that needs to be
done.”
‘ ‘ Then why don’t we find some way of getting him
out?”
“It’s really his property, I think.’’134 Confessions of a Confidence Man
“What of it? Inventors always stand in the way
of their own good.”
I went away, promising to give the matter some
thought. The next day I called on the doctor and
made a suggestion.
“Doctor,” said I, “this German is really a decent
fellow and he has put in five years on this thing.
I’m not willing to defraud him, but I know he is
standing in his own light. Now I’ve thought of a way
to get him out of the road and you into the thing.
If you are willing I’ll try it.”
“If you can do that I’ll do my part,” said he.
“Can I speak confidentially?”
“A doctor keeps secret»”
“If that German continues to believe that his
machine is a success,” said I, “no one will he able
to buy him out—not for a million dollars, and a buy-
out is the only thing I’m willing to consider. But
if I can tamper with his device just enough to keep
him in the air he’ll soon get discouraged. You know
how the Germans are. They lose heart and go into
the dumps. Then we can probably talk reason to
him.”
I have often wondered at the moral and ethical
point of view of so many respectable men I have
duped. These men were nearly all persons of sub-
stance and standing. They had the reputation of
being absolutely upright; no breath of scandal ever
touched them, and yet whenever and however I have
encountered them they have invariably been ready to
go in for sharp practices of this sort. For many years
I have noted, and I have heard other con men say
that they seldom regretted their coups, for the victim135
The Color of Romance
invariably thought he was getting the better of them
or of someone else. This is, to be sure, the motivation
that makes con games possible.
The doctor was enthusiastic about my proposition.
If I could trick the German into a receptive frame of
mind the doctor would do his share. He would buy
the man out.
"Weeks and months had now to elapse—to give my
man time to develop his discouragement. Meantime
I had to keep the doctor boiling. This I did by means
of periodic sneaking visits to the shop in the dead of
night, when I showed the physician the latest attempts
and failures of the German and revealed to him my
invariable subtle sabotage.
The doctor grew more and more impatient as I built
him up, brought various convincers into play and
prepared him for the hurrah. But my German some-
how didn’t discourage very easily. Finally I de-
spaired of him. He was an incurable optimist, I told
the doctor. "We must buy him out or he might yet
strike the right thing or discover my duplicity. I
suggested that the physician approach him with a
proposition. He did, and my confederate demanded
an exorbitant price, ’which the physician naturally
declined to pay. Then followed the usual series of
conferences and the gradual lowering of price and
raising of the offer. The doctor would not go above
fifteen thousand dollars and my German shrewdly
refused less than fifty thousand dollars.
Then came the hurrah. One morning I went to
the physician in great perturbation. The German
had either caught me at my tricks or he was disgusted
with the dickering. He was threatening to throw me186 Confessions of a Confidence Man
over and leave town with his invention. It meant we
might both lose our hold on him. I was vastly excited
and upset. The doctor considered and appraised me
coldly. Then he put on his hat and we drove over
to the shop. Sure enough the inventor 'was disman-
tling the placi and packing up the machine We
stopped him and held a final conference. He was
stubborn . and truculent. The doctor finally offered
twenty-five th bp sand dollars. After much pleading
and urging from me the German threw up his hands,
called us both pirates and skin-flints and went off to
sign over his rights. The next night he was able to
depart with the money.
There had never been any written agreement be-
tween the doetdt1' and myself, but the understanding
was that we were to be equal owners of the invention.
Here again human nature, that restless hungry stuff,
asserted itself. He flatly refused to do business with
me on an equal-partnership basis. One-fifth was the
best he would allow. We quarreled bitterly and I
left town. My pseudo-German, who had so glibly
spurned everything up to twenty-five thousand dollars,
took five thousand from me as his share and turned
over the rest.
And the movies still move in silence.CHAPTER X.
THE WIRELESS PIANO.
IN the dusty top story of a storage warehouse in
a certain city stands a grand piano. Closer in-
spection of it would reveal several strange-looking
attachments and a curious tangle of wires bursting
from its interior. The spiders are spinning their webs
among the strings of this piano and the mice nesting
in its vitals.
Eight or nine years ago I became interested through
my constant electrical experimentation in the idea of
an automatic piano controlled by a phonographic
record. That was the original form of the idea, which
later was elaborated. The general scheme involved
a piano with a specially constructed magnet under
each of the eighty-eight keys.* The second part of the
outfit was a phonograph in wThich the usual mica dia-
phragm had been displaced by a metallic diaphragm
like those used in the telephone. By this change the
talking machine is silenced so far as the human ear
is concerned. Instead of sound it emits vibrations
from the diaphragm which exert certain modulated
pressures in the circuits of the magnets placed beneath
the piano keys. In this device again the selenium
cell is used, but to explain the entire arrangement
would lead me into technical abstractions both need-
less and wearisome. My idea was the substitution of
1371 bá Confessions of a Confidence Man
electromotive force for the physical effort of the
player, plus the control of the instrument by means
of recorded and retransmitted sound waves.
You may wonder what the use might have been
of both a phonograph and a piano. The talking ma-
chine had then never been able to reproduce satisfac-
torily the playing of a piano. Only the fundamental
notes were recorded and reproduced. All the partíais
were lost, with all fine tones and expressions. But
if you might control a piano with this recorded music
you would bring its beauty back to life. I assure you
that with a proper synchronizing device the thing is
entirely practical. And I can also assert that I never
worked toward achieving this with any honest inten-
tion. I have simply been describing a thing which
interested me and the idea of which I palmed off.
All I ever really had was something far short of
this excellent but unachieved invention. But I must
ask you to wait and see wherein the difference lay. I
knew I had a splendid and demonstrable idea and I
understood how to make things seem what they are
not. So I was ready to levy on the credulity of
mankind again.
In one of the large cities of the Northwest, which
I happened to visit on other business, I discovered a
lawyer politician of a type familiar to all of us—a
shrewd, hard, ruthless fellow, not much on law, but
long on worldliness and chicane. This man interested
me, because I knew he was fox bitten, serpentine,
crafty. A man who lives by his wits wearies of dull
bait. He longs for a foeman worthy of his armament.
He takes a devilish delight in humiliating those who
deem themselves proof against their fellows. In doing
The Wireless Piano	139
so he breaks some laws—and teaches some humility.
Everything has compensations.
As soon as I had found this man I moved up my
batteries. The grand piano which stands moldering
in the storage house was bought in the East and sent
to the city in question. A complete assortment of
rather unfamiliar electrical equipment went with it.
And I followed in a few days, accompanied by a young
woman who has aided me in several of my intricate
devisings. She is an actress rather than a woman of
the con world and a business person rather more than
either—a versatile, capable girl who has suffered
some things at the hands of the world and knows its
crannies.
Arrived at the scene of our adventure, I rented a
modest house and furnished it. One of the rooms I
reserved as my workshop ; another as a secret chamber
into which no one ever stepped saving myself and
my girl confederate. I now set up my piano in the
workroom and put in several weeks on the task of
equipping it for a demonstration. When I was done
and had made the proper tests I went to see the
lawyer. He received me sourly until I told him that
I had come to have him incorporate my invention.
Then he was interested. I wanted to form a one-
hundred-thousand-dollar company for the purpose of
building and selling my automatic piano. Some de-
tails of my idea and instrument had naturally to be
given, but I was careful to be reserved.
There were the usual delays and return visits to
the lawyer’s office. I could see after the second call
that my man was allowing his curiosity to gather
momentum. So I was extra-cautious and reticent.140 Confessions of a Confidence Man
I managed to seem full of hope and confidence with-
out bubbling over or telling any secrets. My prospect
didn’t like it at all. He was not used to being in
the dark about things and soon enough he began to
ply me with questions. Naturally, once he had openly
taken the initiative, I was glad enough to explain, and
I did. He was deeply interested and wanted to see
the machine. I could do no less than invite him out
for a demonstration. He wa^impressed, but dubious.
Wherein was this thing any better than any other
good electrical piano? I sailed in, for here was my
cue.
The trouble with mechanical pianos generally was
that they operated on a mechanical principle. That
meant, no matter how excellent the mechanism, a
deadly precision, a woodenness, an absence of char-
acter in the playing. Here on the other hand we
employed electricity, an enormously subtle form of
energy capable of recording and reproducing the finest
shades of soundfemotion, able to catch and reproduce
sound waves which left no impression on the human
ear. All of this, I may remark, was quite true. Nor
was I romancing when I called my visitor’s attention
to the huge business that has been done in automatic
or semiautomatic pianos. I gave him some staggering
figures and sent him away by no means easy in his
greed, I fancy.
After I had purposely remained away from my
attorney’s office for more than a week he wrote me
to command my presence, and T railed.
“I’ve been thinking about your pyanna,” said he.
“Yes?” quoth I carelessly.
“How are you fixed to finance the thing?”
The Wireless Piano	141
“That’s what I’m forming the company for.”
“With a hundred thousand in stock!” he exploded.
“What do you expect to do with that?”
“It’s enough.”
“Nonsense!”
“Well, whaSdo you advise?”
“What you must do is to incorporate for half a
million and put the thing on its feet at once.”
“But I have no way of placing a capital like that.
I have to do the thing modestly,” said I.
Then and there my lawyer declared himself in on
the deal. Before I left him he had the whole scheme
worked out to his own satisfaction. And who was
I to stop him? Incorporation was for five hundred
thousand dollars and the lawyer promised to procure
the capital and manage the whole affair. I was to
have fifty thousand dollars in cash out of the stock
sales in payment for my invention. In addition I
was to receive one hundred thousand dollars, par
value, of the stock. In return for his control of
things—and certain very liberal slices of the stock—
this gentleman was to put up money for experiments
and the taking of patents,, and he was further bound
to build a factory. These things were going to cost
him about twenty thousand dollars, but since he was
taking about five times that amount in stock for his
trouble his liberality was not all it seemed.
I wondered as I walked home from this highly
satisfactory and yet puzzling meeting what was mov-
ing in the crafty brain of this man. He was impressed
with the piano, but was he such an enthusiast as all
this? He did not know me. He knew nothing of
electricity. He knew nothing of music. Did he mean142 Confessions of a Confidence Man
to put up the money and the factory? Just what
was I getting into? Fortunately there was time to
puzzle out all this. I must confess that just at this
point the eon man did not know whether he was
conning or being conned.
But it was the beginning of winter and no factory
could be built till spring in that frigid part of the
country. Meantime I could proceed with my experi-
ments and get my patents. This I did. Without
going into tiresome detail, I applied for eight differ-
ent patents on electrical apparatus for the playing
of a piano according to the theoretical plan I have
already explained. My lawyer handled all of the
legal end and saw to his satisfaction that all eight
claims were allowed. He was not a patent attorney
and did not appreciate the significant fact that none
of these patents was in any sense basic.
The man had by this time put up considerable sums
of cash and given his services in return for stock. He
meant business—so much was certain—but still he
had me puzzled. Spring came and ground was broken
on the first warm day for a factory whose plans I had
myself drawn. In eight weeks it stood there in a
populous part of the city, all of concrete and steel.
I had purposely planned it for conversion into a
garage. Frugal soul that I am, I wanted the building
to be some sort of asset after the great blowup so sure
to ensue.
This factory had cost twelve thousand dollars, which
the attorney had put up out of his own money. Now
there could no longer be any doubt as to the man’s
seriousness, but I was more than ever puzzled and
thoughtful. Finally one night it all came to me. TheThe Wireless Piano
143
man was really taken in. He had not been sure at
first, but he bad risked the first money to find out.
The eight patent grants had convinced him, along
with my constant building up and my enthusiastic
claims. Once feeling certain of his ground, he had
built the factory for me and taken a lien on the stock
of the company for the purpose of getting the cor-
poration involved. Subtle reasoner that he was, he
had found a means to put himself in the way of
seizing the whole thing. Now I understood the game.
The rest would be easy.
Things began to hum in the factory. My piano was
moved from the house to the new plant, and with it
all the mysterious mechanism. In one end of the big
factory room I set up the instrument. It stood free
from the wall so that all might walk round it and
inspect it for wiring. Each leg rested on a porcelain
disk, ostensibly an insulator. But here was the decep-
tion. One of these disks and one of the legs were
perforated—bored from top to bottom with a one-
inch bit—and through this channel ran a cable con-
taining eighty-eight wires, each one of which connected
with a magnet under a piano key. The cable was led
through the floor and thence between the floor and
the basement ceiling to a room nearly a hundred feet
away—a small dark cellar room. If anyone asked,
it was used for electrical experiments of a secret
nature.
Hard by the piano, deftly concealed in the metal
work of the wall, was a set of microphones whose
wires also ran down under the floor and back to this
secret chamber. And from the phonograph still an-
other wire made the trip back to the room of mystery.144 Confessions of a Confidence Man
This was connected with an electric light, which flashed
when I pulled the lever, starting the talking machine.
At the other end of the microphone wires was a dic-
tating-machine receiving instrument. But the marvels
of this hidden room lay in a device with which the
eighty-eight-wire cable was connected. This was
nothing more than the electrical-player device of a
well-known make of automatic piano. Instead of
attaching it directly to the musical instrument I had
connected it by wires. It played the piano from a
distance, that was all. Simple, when you come to
understand, wasn’t it?
The next step was to provide myself with twenty
or thirty piano records for the talking machine. I
selected a variety of pieces plajred by pianists who
also made rolls for the particular make of mechanical
piano I was employing and immediately bought the
corresponding rolls. So when a visitor picked out, let
us say, a Chopin sonata played by Paderewski I had
the roll to supply the music.
Now began my tests. My girl confederate took up
her place in the secret room with the piano rolls at
hand. I took my stand by the distant piano. In an
ordinary voice I called for one of the selections. In
her hidden room she heard me perfectly and instantly
put the roll into the player. At the same time I placed
the corresponding record on the phonograph. When
I was ready I pulled the starting lever. Instantly
the light flashed in the hidden room and my confed-
erate threw the switch on the player. The phono-
graph at my side was silent, as I have explained. But
the piano leaped suddenly into harmonic life. Only
one thing caused me a little trouble: I had to doThe Wireless Piano
145
considerable experimenting and practicing before I
found the correct speed at which to operate the talking
machine for each of the records. It would have been
an absurd piece of blundering had the piano ever
continued playing after the record was played out.
But time and a little practice solved all this.
My sanguine attorney came hurrying to the factory
as soon as I told him we were ready to demonstrate.
Everything went off beautifully. He was more
than satisfied.
“Now then,” said he, “we are ready for the fire-
works. To-morrow night I want to bring about two
dozen friends in here and knock them dead. I ’ll send
up some folding chairs and we’ll arrange for some
refreshments. We’ll pull off a stunt here that will
bring in all the money we need in twenty-four hours.”
That was all well and good, but I had still some
schemes to perfect and some ground-work to lay. I
put him off. Though the thing seemed all right to
him, it was not yet perfect. Some slight changes had
yet to be made, for I desired when he gave the public
demonstration that he bring in some musicians and
—if he liked—a few electrical experts. He was im-
patient at the delay, but the idea of musical and
electrical people pleased him, so he gave in.
I was intensely busy about the factory for a week
or ten days—or I seemed to be. Then I went to my
friend with some money troubles. I was heavily in
debt. I told him a story of recent marital misfortunes,
a demanding ex-wife and her constant harassments.
In short, I was in need of cash. I got it by pledging
some of my stock. I got only two thousand dollars,
but it was a starter. I neither needed nor wanted146 Confessions of a Confidence Man
any such sum, but I had an end in view which had
better be explained. According to our agreement I
was to receive fifty thousand dollars in cash out of
the first one hundred thousand dollars of stock sold.
In addition I was to have one hundred thousand dol-
lars in stock. Now fifty thousand dollars when one
hundred thousand dollars in stock is sold is an indefi-
nite sort of promise. There was the possibility that
so much might never be subscribed-, in which case I
was tied down with a fake invention and no proceeds.
Therefore I had to plan the hypothecating of my one
hundred thousand dollars in stock.
This would come to me as soon as officers were
elected. So much was certain. The rest was proble-
matical.
I therefore spent more than a month building up
my attorney toward the objective of heavy stock.loans.
I had, to work on, his enthusiasm over the invention
and his hungry desire to get hold of a controlling
share of the stock. He wanted of course not only to
get his stock more cheaply than anyone else, but he
had in the back of his mind the old idea of involving
the company, squeezing me out and taking complete
possession. And that was what I wanted him to do,
but he must pay. Before long I had explained to this
gentleman that when my fifty thousand dollars was
paid me—if ever it was—I should have to turn it
over immediately to persons who had claims on
me.
“Well,” said he, “you’ll still have your stock.”
“Yes, I will have to borrow heavily on it,” said I.
“When the time comes,” he considered, “I guess
that can be arranged.”The Wireless Piano
147
He saw the company already in his hands, poor
avaricious man. Now I was ready.
A few nights later there was a distinguished gather-
ing in my factory. About sixty people came, includ-
ing the head of the local electri^ comp any, three or
four music teachers, a bank director with whom my
lawyer did much business, several other lawyers with
their wives, half a dozen local physician^ a dozen
business men with their wives—all of them friends
of my man and all prepared ’’in advance by him.
These were the people who were to buy the stock in
the wonderful piano—wireless pyanna, he insisted on
calling it.
There was a great deal of bowing and millingr__a
wearying ordeal of handshaking and an hour of gos-
siping before we got started. I improved the time
by liberally distributing a most potent punch on
whose alcoholic” content I had made some improve-
ments after my lawyer’s caterer had delivered it.
Finally we were ready and I took my place. I made
a little speech in which I explained the marvelous
electrical principles involved—or said to be involved.
I dwelt on the tremendous commercial possibilities of
the thing. Next I invited the electrical man to inspect
the piano, which he did in a hasty embarrassed way
by walking round the instrument. I then asked the
musical people to listen to the fine tone shading and
expression of the piano. So as to avoid confusion,
I announced, I would play as many records as I had
or the audience would listen to, and I would announce
each selection as I put it on the machine.
I placed a record on the talking machine and
stepped toward the wall and the microphones.148 Confessions of a Confidence Man
“Saint-Saëns’ Song Without Words,” I announced,
“played by Paderewski.”
I stepped back and pulled the lever on the phono-
graph—but not until I had allowed by girl time to
put on the roll. Her light flashed and she threw the
switch. There was just the momentary delay while
the phonograph burred slightly. Then the piano broke
into melody. The audience sat spellbound and open-
mouthed.
For more than an hour I kept pumping music at
my prospects, everything from Beethoven to ragtime.
Not a man or a woman stirred. When I finally let
up and called it an evening there waifa round of
applause. The music teachers all talked at once.
Everyone had some thoroughly informed views to air.
I smiled and said little. Then I took the floor again
and said my say.
I called attention to the real future of this piano
for the first time, I told them. Before to-night I had
been unwilling to let my imagination play with me,
but now I was convinced of wonderful things. With
this machine once on the market there would be a
complete revolution in music, I said. It would be
possible to play this marvelous instrument by wireless
from any reasonable distance. To be plain, within a
few years we would find aerials for wireless on all
fine homes and pianos such as this in all drawing-
rooms. Instead of trooping off to a concert hall to
hear a great pianist the music lover of the future
would subscribe to a wireless musical service. It
might sound grotesque, hut so had the notion of talking
across the sea been called absurd. Instead of pack-
ing out into the snow and cold the family of the futureThe Wireless Piano
149
would sit cozily in easy-chairs by a comfortable fire,
turn on the wireless attachment of the piano and listen
to the playing of the greatest virtuosos of the day.
Thp’ player might be a few miles away at the local
musical house, or he might be in a distant city. Such
were the prospective wonders of this piano. I wanted
my audience to feel that this was an event that might
well have historic associations in years to come. So I
anticipated the radio.
The next day just before five in the afternoon my
attorney called me excitedly on the telephone and told
me that the hundred thousand in stock had all been
subscribed.
It was not all paid in at once, to be sure. This
gave me the added time needed. I went back to my
man with complaints and money troubles. After
much arguing and dickering I arranged to put up
my one hundred thousand dollars in stock for a loan
of twenty thousand dollars, not including the two
thousand dollars I had previously borrowed. I calcu-
lated that the payments on the subscribed stock would
all have been made in three months and so I arranged
my loan to mature in that length of time. Now there
was nothing to do but to go back to the factory, begin
work and wait.
In due time the subscribed stock was taken up and
I received my fifty thousand dollars. Less than ten
days later my loan came due and the attorney de-
manded payment. I begged him for an extension.
He knew how I was involved. In three months more
I could pay up. The man’s eyes grew narrow and his
mouth hard.150 Confessions of a Confidence Man
“You wouldn’t call that business, would you?”
he asked.
“There are better things than business.”
“I don’t know what they are. Anyhow, you’ve
got good pay for your invention, you’ve had twenty-
two thousand dollars for your stock and you got it
when you needed it. I don’t see where you have any
kick. ’ ’
“You mean,” I asked dramatically, “that I am
frozen out of my invention? You mean that you want
to strip me of the thing I’ve put four years of work
into ? ’ ’
He walked off to the other end of the room and
began dictating letters to his stenographer. I followed
him and remonstrated with all the passion and bitter-
ness I could put into my voice.
“I wish you wouldn’t annoy me,” said he.
I went out with forced tears on my cheeks. Down-
stairs I turned into a bar-room, bought myself a long
drink and burst into uncontrollable laughter. I
wasted no time in selling out my furniture and clos-
ing my house. And a few hours later the inventor
of the wireless piano and his girl assistant were on
their way.
When I passed through this city of adventure two
years afterward I stopped for a look at things and
then slipped quietly away.
They were parking tin autos where once the mar-
velous piano had ground out its golden song.CHAPTER XI.
THE PUBLIC’S CREDULITY.
MANKIND likes to take a chance. It is the
romantic impulse, the rebellion against work-
aday order and conservatism. To the poor
driven mass of humanity the occasional risking of
something on some issue, no matter how quixotic, is
the color and thrill to light the drabness and dullness
of life. And the outcome of the gamble matters little
in terms of satisfaction. It is pleasant to win, but
better to lose than never to know the explosive sensa-
tion of having something at stake.
The other day I was being bled for a pair of shoes
when there entered a hasty and furtive person with
a handful of slips. The salesman went quickly aside,
dug into his pocket for money, exchanged it for a
written ticket and resumed the shoe selling.
“Ponies?” I ventured.
‘ ‘ Lottery, ’ ’ said he.
“Ever win?”
“Not yet.”
“How long have you been playing?”
“Not long. Five or six years.”
I felt like arguing. Besides I wanted to know what
was in this man’s head. He was a member of the
great sucker family, an illustrious line that interests
me strangely. Was he so foolish as to believe anyone
1S1152 Confessions of a Confidence Man
could ever beat such lotteries as exist to-day ? Didn’t
he know an absolute fraud? He had been giving two
or three dollars a month to these rogues for six years
—some two hundred dollars.
“Well, I didn’t lose much,” he said sheepishly.
“And I thought I had a big chance.”
Here is epitomized the mind of a large part of the
American public. People who work hard for small
pay, see no light ahead and do not understand how
to save are natural chance takers. A few dollars out
of a month’s earnings do not matter. They may be
risked on the most outrageous gambles, the most
impossible speculations. Bets—for they are no more
—are put down on oil wells in Timbuktu, pirates’
treasure in the Carribbean, the hoard of the temple
of Quetzalcohuatl, the gold dust from the loins of
El Dorado, under the waters of Guatavita, the mines
of the moon and the pot at the end of the rainbow.
The public lends its money in small individual
amounts, but enormous totals, to all such fancies and
does not often complain if there is no yield.
Yet men wonder how con games are possible and
profitable. That large and vague body of humanity
—the general public—insists on paying for forfeit
dreams. I don’t know what is to be done about it.
I can only offer some education to the public, hoping
that at least a part will profit. We will therefore
next consider the mulcting of the general public by
the con game.
From the beginning of my story I have applied the
term con man and con game to a class of sharpers
and tricks not generally included under this desig-
nation. To me whoever trades fraudulently on the
The Public’s Credulity	153
confidence of another or others is a confidence man,
whether he erects and wrecks a $30,000,000 or $100,-
000,000 corporation, or whether he takes $100 from
some ebullient countryman. I would include under
this generic term many whom the law does not now
reach and I leave it to the judgment of ten years
hence whether I am right. It is true that at present
the great rogue escapes prison or pays for colossal
iniquities with a small fine or a short term in jail,
while the rougher and readier villain spends ten years
in prison for a relative trifle. But times and judg-
ments change—and so do laws.
The law is usually ten or twenty years behind the
criminal. In New York State, for instance, it was
impossible to send even the most flagrant con men to
prison until, in 1907, the legislature finally changed
a condition which had for many years made New York
an alsatia for certain swindlers. In the celebrated
decision in the matter of the People versus McCord
the Court of Appeals had held that a complainant
must come into court with clean hands. It was clear
that the rustic who had bought green goods supposing
it to be counterfeit money, or the merchant who had
been lured into betting on a fixed race, came into
the presence of the law with hands badly soiled. And
the brave con lads of the time did as they liked. But
laws were finally enacted to relieve this situation aud
laws will eventually make it at least as criminal to
swindle a million as to steal a suit of clothes.
If I am correct as to those who constitute con men
there are two groups in the profession—the big oper-
ators who descend on the public from the limbo of
business and finance and the weaker brethren who154 Confessions of a Confidence Man
come up from the nether world. Of the former and
the forces that take them from legitimate to criminal
practices I have already said enough. The colorful
minor workers in confidence deserve attention.
Most of these fellows are graduated from three
academies—the gambling house, the race track and
the traveling show. Perhaps the turf has sent more
students into con than any other school. It it not
difficult to see how gambling, and especially crooked
gambling, is an efficient preparation for the general
swindler. Neither is the relationship obscure between
the con man and the glib varlet who lures the public
into fake side shows and boob-catching amusements.
In the case of the race tracks the steps of transition
are most clearly marked. The race track leads to the
pool room; the pool room is cousingerman to the wire
tapper’s lair; the old wire-tapping game is certainly
the basis for one of the hardiest and crudest forms
of con.
It is, therefore, not difficult to understand the origin
of the swindling classes or to see by what means the
ranks of defrauders are constantly filled up. Death
and prison may take many an earnest worker from
the flowery fields of con, but the sources of fresh
recruits are fecund and the flow copious.
But many con men argue many victims. How is
this supply of dupes kept up ? So far as the fleecing
of the general public is in question, there is one an-
swer—the sucker list. Here is a pivotal institution
of the confidence swindle. Its origin and history
will be of sprightly interest.
Those whose memories go back as far as 1910 will
remember the loud and painful explosions of wirelessmssmms^a
The Public’s Credulity	155
companies. I do not need to recall the huge and
agonizing losses suffered in these chimerical enter-
prises. I refer to them only to recall that at the
time poor Cam Spear, who never originated anything
in all his life, was generally accused of being the inno-
vator of the infamous sucker lists. Many good people
swallowed the charge wThole, and I have heard it
repeated hundreds of times while Spear was alive to
deny it, and after his death.
As a matter of truth, sucker lists probably origi-
nated before Spear was born. They were not part of
the gold brick and banco games, those very earliest
American con institutions, but they played an im-
portant part in green goods. Wherever the mails
were employed to canvass and attract the victim,
sucker lists came into being. Thus these astounding
rosters of gullibles were in use soon after the Civil
War, and perhaps before, in connection with green
goods, the next-of-kin or missing-heirs delusion, vari-
ous matrimonial-agency games almost as old as the
nation, the celebrated Spanish-prisoner fraud and
many others.
In the ’80’s and ’90’s of the last century the bucket
shops of certain large cities began to augment their
business by means of the mail canvass, and here the
sucker list entered the speculative field. In 1895
sucker lists were being used in New York, Chicago,
Philadelphia, and many other large cities in connec-
tion with such frauds as came to a climax in the
case of the notorious Five-Hundred-and-Twenty-Per-
Cent Miller and his Franklin Syndicate.
Miller, a poor clerk who liked to play in the bucket
shops, conceived the idea of advertising in the news-156 Confessions of a Confidence Man
papers profits of ten per cent a week and thus attract-
ing foolish money. He set himself up in a house in
Brooklyn and cash poured in. He paid the dividends
out of the principal and so lured his dupes into mak-
ing constantly greater investments until his Franklin
Syndicate had grown into an enormous affair. With
the aid and legal advising of the notorious Bob Ammon
he finally raised the thing to its fullest inflation and
then decamped as the newspapers opened their bat-
teries upon him. Miller was sentenced to ten and
Ammon to five years in prison. Their sucker lists
had been compiled from the answers to their adver-
tisements, and this is still a method commonly used.
Only recently in New York a broker who decamped
leaving a $1,500,000 failure behind him, recruited a
list of about 16,000 customers in about fifteen months
by this system. Every one of his correspondents lost
whatever had been trusted to his hands. The man
had been a Western school-teacher. He had taught
psychology in the high schools. One day he deter-
mined to try his knowledge of the human mind on
the investing or speculating public. He set out for
New York, became a sheet writer in a broker’s of-
fice, graduated to writing stock literature and then
launched out as a curb broker with just enough capital
to pay expenses for a few months. The public paid
the rest—one and a half million.
But advertising is only the most obvious means to
the procurement of the names and addresses of per-
sons likely to be interested in speculation. Certainly
this method will not serve in barefaced con games.
But there are hundreds of other avenues to the same
point. In any city where there is a bourse there are157
The Public s Credulity
also dealers in stockholders’ lists. These lists: can be
and are constantly being bought for straight and
crooked uses. Again, lists are traded by brokers.
They are sold by firms retiring from business. Lists
of bond and stock buyers are surreptitiously copied
by clerks working in reputable banking and brokerage
houses and hawked about to all who will buy. Again,
in New York State, where most speculative games
center, it is the law that any person may have access
to the names of his fellow stockholders. Thus it is
only necessary to buy a share of stock in a concern
to have a right to lists of investors.
Commercial-rating houses take all possible precau-
tions to protect their lists from sharpers, yet these too
fall into evil hands. Where fires occur these books
are salvaged, damaged or undamaged, and sold to
dealers, of whom they can subsequently be bought by
swindlers. Again, occasionally a man employed in
county clerks’ and registrars’ offices knows that lists
of taxpayers are salable. Other men compile rolls of
paid up life insurance, with the names and addresses
of the beneficiaries. The filing of wills with the names
of the heirs, the copying of bank depositors’ lists,
tabulation of school-teachers, rosters of professional
men, also furnish further desirable names.
In the prosperous days of high war wages many
dealers in prospect lists went to the big manufacturing
towns, the shipyards, and similar places, where num-
bers of men were employed at high pay, and there
they paid foremen, timekeepers and others for tabula-
tions of the employees, often with their earnings set
down opposite their names.
Such lists are sold to merchants as well as to con158 Confessions of a Confidence Man
men, I may pause to remark. Finally, many names
are picked up by watching transactions before the
blackboards of brokers dealing in speculative issues,
and many other valuable prospects are procured by
advertising free financial papers, which contain news
of the stock market and investing advice. Whoever
sends in a request for the delivery of such a paper
is a confessed speculator and a prospective customer
or dupe, as the case may be.
Thus it will pay the average citizen to watch his
step and to resist the impulse to feel flattered when
some house with a high sounding name, ensconced in
Wall Street or La Salle Street or Broad Street, ad-
dresses him about an investment or speculation. He
may be no more than one of ten thousand prospective
dupes picked from a telephone book or city directory.
Postage is cheap.
Perhaps the very latest development in the field of
the sucker list and the approach was that practiced
in New York, and perhaps in other large cities, during
the great stock inflations since the war. Here the
mails were discarded and the telephone substituted.
I have spoken before of the enormous growth in the
number of oil companies and the small percentage that
are legitimate. Perhaps this insight into the methods
of canvass will help to convince the reluctant: There
are 2,000 or more brokerage houses listed in the New
York telephone book and I am told by those who are
informed that the total of individual brokers is about
6,000. It is said there are 1,200 telephone canvassers
concealed in this number. I cannot guarantee these
figures. I can speak from personal knowledge, how-
ever, of the manner in which many oil-stock brokersjjjggg£ggsgg
mm
mmm
The Public’s Credulity	159
used the telephone in recent years. These houses had
rooms fitted up with dozens of instruments in booths.
Here clerks or salesmen sat from nine in the morning
until four or five in the afternoon going down the lists
of telephone subscribers in alphabetical order, calling
one after the other and giving an oil-stock canvass
to every man or woman who would listen. The cost
of the operation was only five cents, plus the wages of
the clerk. With a telephone book containing 500,000
names to work on, the oil business went great guns.
But if it is now clear how the swindler and his
victim are brought together, it remains for me to
show how fraudulent stock and other supposed values
are sold to the approached common people.
In this day and age a certain amount of enlighten-
ment or gun-shyness is to be assumed. Few now buy
stock if approached cold with any sort of proposition.
The subject must be roused in advance, his interest
stirred and his greed put to work. The mails are
used for this purpose, but much depends on the man-
ner of their employment. Ways round the obstacle
of public distrust must be found and the con man’s
resourcefulness ii taxed to devise constantly fresh
allurements and disarmers. I cannot attempt to list
all these pieces of finesse, but I shall try to give a
few characteristic examples so that all may be fore-
warned.
A few years ago an inventor arrived in New York
with a machine designed to turn out a commercial
specialty automatically and at high speed. He was
referred to me by an acquaintance and I was hired
to concoct a suitable attracter of money.
On my recommendation the automatic machine was160 Confessions of a Confidence Man
set up in a ground floor shop in a highly populous
block on Broadway. As soon as the thing was installed
and in working order I hired three very handsome
blond show girls out of Broadway companies, paid
them more than they could earn on the stage, dressed
them attractively in black silk, with feehing bonnets
and white aprons, and put them to operating the
machine. They were there for two purposes—to show
that women or children could operate the machine
and to attract crowds, both of which functions they
admirably discharged.
Men came in droves to see the pretty girls and
remained in many cases to buy stock of the loquacious
and plausible salesmen, who were ever at hand. This
simple scheme, which has often been employed since,
proved highly effective. After New York had been
exploited to a frazzle the owners of the machine went
on the road and set up their demonstrating plant and
their blond show girls in cities half across the country.
It need not add that the invested money was lost.
My only connection with this thing was the suggesting
of the selling idea, for which I received a fee.
A good deal more complicated was the mechanism
employed by myself and another in connection with a
copper company. This was a wholly fraudulent con-
cern which owned a hole in the ground somewhere
out in the West. I was casting about for something
to employ my peculiar talents when a broker called
my attention to his company and the slow progress
h& had made with the stock. He was employing a
good old-fashioned mail canvass and follow-up system.
He had sold small blocks of his highly speculative
shares to about two hundred simpletons. These peopleThe Public’s Credulity	161
would buy no more and new customers were few and
far between.
“What am I going to do?” the broker asked me
with a helpless gesture.
“For half the profits,” said I, “the secret will be
yours. ’ ’
A few days later there was a meeting of the direc-
tors of the copper company at which a resolution
was passed withdrawing all stock from the market.
At the same meeting the broker was instructed to
notify all stockholders of this action of the board,
which he promptly did by means of printed post cards.
I don’t suppose the stockholders were visibly agitated
by this piece of news, significant as it afterward proved
to be. Nevertheless, they were notified.
Within a week each stockholder received a letter
from a brokerage house.
“We are informed,” read the letter, “that you
are a stockholder in The ----- Copper Company—do
you mind telling us how many shares of this stock you
hold and whether you might be willing to sell?”
A few days later another letter was received by
each stockholder, this time from still another broker.
The letter said:
“We are credibly informed that you hold-----shares
of the common stock of the--------Copper Company,
which has lately withdrawn its stock from the market.
If our information is correct we are interested in
knowing whether you are willing to sell your holding
and at what price you value the shares. Hoping to
hear from you, we are,” and so on.
The next day a third letter arrived, ostensibly from
a third broker, saying:162 Confessions of a Confidence Man
“The recent withdrawal of the-----copper stock,
of which, we believe, you are a holder, inclines us to
believe we can make you an advantageous offer for
your shares. Please let us know if your stock is for
sale. ’ ’
And finally came an epistle from W. C. Crosby, as
follows:
“You must have noted that the-----Company has
withdrawn its stock from the market. Whether the
significance of this move on the part of the directors
has occurred to you I do not know. However, I have
recently been over the company property in the West
and made a study of conditions there that will prove
highly interesting to all stockholders. If I may pre-
sume so far I advise you not to dispose of the stock
for the present. I expect to be in your locality some-
time within the month and with your permission I
will call upon you with reference to this matter.”
These various letters written and sent, I immediately
set out to visit the stockholders. I went in one direc-
tion and the delighted broker in another. Thus pre-
pared by the varied correspondence, the holders of
shares everywhere received us with curiosity and even
enthusiasm. Instead of coming with a stock canvass,
we were bringing glad tidings, though I was careful
not to say for whom.
I opened the engagement by recounting the excellent
conditions of the property and the certainty of a
great advance in stock values. Then I came to the
point. Being informed of the situation, I had op-
tioned a large block of stock at a low price just before
the directors withdrew it from the market.
I did not have money enough to swing my deal,163
The Public’s Credulity
and so I "was offering the stockholders a chance to
share in my profits in return for the use of their
money. They were to buy as much of the optioned
stock as they could finance at $1.15 a share, which
was what I had contracted to pay. The stock would
be delivered to them and they were to hold it for
the inevitable advance. No doubt they had already
received offers. No attention was to be paid to these.
I would keep myself conversant with the situation
and indicate the right time to sell. When the sale
was made I must receive one-half the profits. Every-
thing would be in their hands and I depended on their
honesty, which was above question, for the payment
of my share.
In two months, during which we traveled in ten
states, visiting our stockholders, the broker and I sold
great blocks of the stock to investors who had pre-
viously refused to yield another cent. My share of
the spoils, after deducting expenses, came to nearly
$19,000. I regret to record that the stock never
advanced in price and it was thus impossible to hold
my friends to their agreements.
Here are two typical schemes for putting in a blow
over the public’s guard. They go to show how futile
is ordinary watchfulness.
It is not enough to be suspicious of the man who
comes out of a clear sky with a stock proposition. It
is not enough to distrust the stranger. The rule is
that safe-and-sane enterprises do not hawk their stock
about and that all stock promiscuously offered is
potentially dangerous.§§>





«
»


iPH
«T

CHAPTER XII.
OIL AND YOUR MONEY.
iN most eases the swindles practiced upon the
people at large involve stocks, but this is by no
means the infallible rule. In most instances the
people victimized by con schemes not aimed at a
special class, business or profession, are the humble
earners of wages or salaries, the small business man,
the farmer; but this postulates not the slightest im-
munity for others. Persons of wealth and high stand-
ing are often taken in, usually by fakers exploiting
some scheme that deals wuth the arts, the traffic in
antiques or even the public interest in charities. The
war brought a large number of charity frauds to
public attention and resulted in the imprisonment of
some of the conspirators. Others were too aloofly
placed to be reached.
The swindler watches with a shrewd and all-seeing
eye every development that may be turned to profit.
So within recent years he has observed the growing
interest in books and fine editions in this country.
He has seen the great development of the bibliophile
fever. He has watched the great mart for rare and
costly books transferred from London to New York—
and he long since interpreted this movement in terms
of profit to himself.
Several years ago a set of schemers set out to de-
165166 Confessions of a Confidence Man
fraud wealthy Americans, principally women, through
de-luxe editions of books. The conspirators supplied
themselves with numerous sets of books, mostly of the
sort blessed with a slightly erotic flavor. These sets
were bound extravagantly and generally in scanda-
lous taste. Armed with such sets, the sharpers went
to men and women of means and told a story.
Mr. So-and-So had long been in the market for the
blank edition of such-and-such works bound by Nullo.
It was well known that Mr. So-and-So wTas an enthu-
siast and had heretofore paid very high prices. But
he had never been able to get just these books. The
schemer had now such a set under option. Unhappily,
Mr. So-and-So was in Europe and might not return
for six months. Here was a great chance at profit
likely to go to waste.
“How do I figure in this?” demanded the victim.
* * I want you to buy the set from its present owner, ’ ’
said the con man. “It can be had for $3000, and So-
and-So will pay $7500.
“If you will buy the set and hold it till he gets
back from Europe I will put you in touch with the
present owner and engineer the deal for half the
profits. You are protected all the way. You buy
the books ,in person, you hold them till So-and-So
gets back and you sell them to him. I trust you to
pay me my share, for I know you to be too wealthy
and too honorable to defraud me.”
This proposition was backed up by fraudulent tele-
grams and letters and in most instances with quite-
genuine records of the purchases made by So-and-So
and the prices paid. The names of some of the great-
est American collectors were used by these bold oper-167
Oil and Your Money
ators, with the result that literally hundreds of wealthy
or prosperous women, professional men and others
were drawn into the scheme. Several of the women
were duped into buying whole shelves full of these
showily bound but otherwise commonplace editions at
prices ranging from $1500 to $10,000 a set. Two
women whose losses figured in the subsequent trials
were victimized to the extent of nearly $60,000 each.
They discovered that the prospective buyer was not
in the market for the purchased sets and that these
editions were worth not more than seventy-five dollars
—to give an average figure. Prosecutions landed the
chief conspirators in Atlanta. The public loss was
not less than $500,000.
Ten years ago two young men reared in one of the
smaller cities determined to start a building-and-sav-
ings association in their home town. One of them
had credit and connections, the other the necessary
business equipment. They launched out in a modest
and honest way and soon built their business up to
considerable proportions. Their success in this lim-
ited field and some of the profits they had been able
to amass tempted them to spread their wings. Shortly
afterward these two men opened a similar institution
in one of the largest American cities. They advertised
in the newspapers and periodicals, offering to pay
four and a half per cent on savings accounts. It
will be noted that they had eliminated the building
feature from their calculations. In response to copious
advertising came many letters carrying deposits. A
very large class of conservative but simple people
were drawn to this enterprise by the comparative
modesty of its claims. The interest offered was higher168 Confessions of a Confidence Man
than that usually paid at savings banks, the claims
of the company seemed to argue absolute safety and
the amounts receivable were small. School-teachers,
professors, clerical men and women and many others
put their savings at the disposition of these men.
In a very short time the company came to have
heavy deposits in hand. Shift was now made to
employ this money profitably. One of the two pro-
moters projected a great speculation in suburban
building lots. He went to an attractive district on
the outskirts of the city and bought up at $1000 an
acre a great stretch of unimproved land. This real
estate was now used for the purposes of a swindle
of a common type against which the public needs to
be warned.
Each acre of land was divided into twenty lots,
leaving space for streets and alleys. The land had
all been bought in the name of the individual pro-
moter, who now formed a real-estate corporation which
he called the ----- Holding Company. This was, in
fact, a subsidiary of the first company and was offi-
cered with puppets. To the holding company the
promoter now sold the lots into which he had sub-
divided his unimproved land, taking a huge profit
on each acre. The holding company in turn mortgaged
the lots to the first company at the rate of about $800
a lot. In this wise the first company lent the savings
of the public, on which it promised to pay four and
a half per cent interest through conservative invest-
ment, to the realty concern, and it lent this money at
the rate of $16,000 for each acre of land, though the
men manipulating the deal had just bought the land
for a thousand dollars an acre. The realty concern,169
Oil and Your Money
to be sure, turned over tbe borrowed $16,000—or most
of it—to the original promoter, who was the domi-
nating figure in the land speculation, the realty com-
pany and the savings institution. Up to this point
the thing bears the aspect of a most outrageous misuse
of deposits. But an element of equity was now intro-
duced.
The holding company began to advertise the lots
in the suburban tract and tried to attract home build-
ers. In order to make ends meet each lot had of course
to bring an exorbitant figure, and we shortly saw
small lots offered at $1500 each in a tract that had
cost $1000 an acre two months earlier. - Had it been
possible to vend all this property at this enormously
inflated figure the depositors might have been safe,
but such exaggerated booms cannot stand up. A few
lots were sold to gullible people, who thus became
the secondary victims of these scheming gentlemen.
But their chief sufferers were the thousands of in-
nocents who had believed themselves conservative
when they sent their savings thousands of miles to be
held by advertising financiers whom they had never
seen.
One day the bubble broke. The doors of both com-
panies closed, receivers were appointed, the books
investigated and the promoters arrested. A great
scandal ensued, but in the end the cry and excitement
subsided into empty tears and regrets. It was found
impossible to prosecute the promoters with any chance
of conviction, for there had been an element of equity
in the transaction and it would have been very difficult
to prove that the heads of the companies had actually
designed the ruin of their depositors. They—or one170 Confessions of a Confidence Man
of them—had certainly pocketed great and illicit prof-
its, hut that in itself is not an offense under our laws
as they stand to-day.
The upshot was that the people lost two and one-
half million dollars and no one was punished. No
doubt many of my readers will recall this affair with
more than impersonal feeling.
Every few years the fashion changes in speculations
and in con. Within ten years there was a gold-mining
rage, somewhat earlier a fondness for inventions, and
in between a land craze. To-day the easy money
in the country streams to oil. There are reasons for
this—good and bad. There have, to be sure, been
fairly recent oil strikes in both new and old fields.
It is also true that the war developed a demand for
oil and oil products such as had never been expe-
rienced, and prices rose with the demand. All in all,
the legitimate oil industry is in very prosperous
condition as some recent dividend declarations at-
tested; but this has little or nothing to do with the
great expansion of the speculative oil business.
In the very beginning of my story I referred to
this—thousands of new oil concerns in eighteen
months and only three per cent showing any assets.
On what is this enormous growth based? Certainly
not on the prosperity of the established companies.
And, except in rare instances, not on any tangible
discoveries of oil. The great speculative passion which
came with the war and long outlived it has simply
been seized as a medium in which to float innumerable
oil-stock booms. One thing alone is certain about the
situation—that a great deal of money has been and
will be lost for the people. Ninety-seven per cent ofOil and Your Money	171
the new companies are without merit, according to
competent investigation. Is that enough?
For the reason that oil is just now the chief medium
of mulcting the people I wish to explain in detail the
methods used by swindlers and wildcat promoters of
oil companies.
Oil-stock companies are floated and the frauds per-
petrated in three general ways: The stock of an oil
concern may be offered from hand to hand in a small
group or a single town. This is the confidential pro-
motion. Everyone is made to believe that he is being
offered a secret opportunity of wonderful value. The
dupe becomes hypnotized and in turn aids to gull
his neighbor. The promoters work in and out among
the interested group and soon have the purses wrung
dry. The second form of promotion is the advertising
hurrah. This is generally worked from some large city
through the newspapers. The stocks, units, partici-
pations, trust certificates, or what not, are offered at
fixed prices, which are arbitrarily advanced from time
to time by the directors of the fake concerns. The
public sends in its money through the mails in re-
sponse to the advertising and the mail canvass—and
that is the end of the money. The third form of
promotion entails the manipulation of an oil stock
on the market, generally the New York curb. In all
these plans salesmen may be employed to vend the
shares.
Such concerns never, or almost never, have assets
worthy the name. At most they own questionable
claims in or near some established oil field—usually
that most recently discovered. There may or may
not be oil under the property of the company. No172 Confessions of a Confidence Man
one knows who buys the stock. Normally the chances
are ten thousand to one against the investor. In prac-
tice the odds are even much longer, for a promoter
who has any substantial reason for suspecting the
actual presence of oil under his leased land would be
a fool of the first water to invite the public to his
feast.
What these fake concerns trade on is the adjacence
to their claims of an actual oil field. I cannot pause
to go into long technical explanations, but it is a fact
that the nearness of an oil field may mean everything
or nothing at all. Gushers are brought in fifty miles
from the known wells. Other borings only a hundred
yards from a productive well may be dry as dust.
The proximity of oil means absolutely nothing, unless
one is on the spot and an oil geologist into the bargain.
One other warning: I am informed by practical oil
men that $50,000 will exploit the possibilities of any
average oil claim. At the very largest estimate $100,-
000 will sink wells enough to determine beyond all
doubt whether any piece of property conceals oil in
its depths. In most instances $25,000 will do the
work. But are oil-stock companies incorporated for
such modest capitals? They are not. Generally the
promotion is for a million dollars or more. Why?
Because the companies were formed to sell stock. If
the man tempted to speculate in oil stocks will bear
this in mind always he will save himself money and
sorrow.
A single reminiscence will cover the oil game, for
it embraces elements of several of the dodges which
swindlers in oil stocks come on the public.
Several years ago in one of the periodic flare-ups173
Oil and Your Money
of new interest in an established field a gentleman of
long and unclean experience in the oil-promotion busi-
ness was tempted to hurry West seeking whom he
might devour. Arrived in the oil country, he spent
several months looking for a chance to pick up a prom-
ising claim. Like all other crooked gentlemen, the
promoter did not mind finding an oil well or a gold
mine—for his own purse. But everything was bought
up. Not a lease worth a single drill point could be
had for love or money. What the old oil companies
did not control was in the hands of local people, who
held their land at enormous prices. There were no
pickings left for the designing promoter. But he was
a man of resource. Neither man nor Nature could
lightly say him nay.
One morning he packed himself into a rented motor
car and drove far afield. He cannot have been- seek-
ing oil, for he traveled beyond the tested and estab-
lished limits of the field. Perhaps he was seeking
something else. At any rate, he found it. Thirty
miles beyond the farthest extent of the oil country
he discovered a fine piece of undisturbed woodland.
The trees stood as in the ancient days. Neither ax
nor plow had disturbed the primitiveness of the place.
A brook—or creek, as the natives called it—rambled
through the woods. The red-headed woodpeckers
drummed on moldering bark. Nature, detachment,
opportunity! The adventurer bought forty acres of
this excellent real estate for twenty dollars an acre
and set out at once for St. Louis.
Here the enterprising gentleman set up an office,
employed a stenographer and went to work. In three
weeks he had a dozen men of small substance inter-174 Confessions of a Confidence Man
ested in a new oil claim in his particular field. To
each he had spoken quiet and provocative words. He
wanted no noise, no advertising. This was a legitimate
thing and no big money was required. He would take
in only enough people to finance the thing in the
most conservative way, for he was not anxious to
give away a good thing to the general public. It
sounded plausible. Several enthusiasts put up small
amounts of money. The promoter immediately hur-
ried back to his claim, accompanied by a person whom
he had singled out as his confederate. On the way
out he explained. He found that he had chosen wisely,
for the elected sided in with the schemer’s plan*
In about ten days these two men threw up a hasty
shelter in their little wilderness, dammed the brook
roughly at one point to form a pool and created an ■
oil seepage. This they accomplished with nothing
more complex than two barrels of crude oil brought
from the adjacent wells and about three hundred feet
of one-inch iron pipe . A hole was dug at a high point
of the land and the barrels buried. They were then
connected with the iron pipe and this was run through
a narrow trench to a point within a few feet of the
creek, well above the pool. The pipe ended in the
ground, with a blind outlet. The oil could be trusted
to seep the rest of the distance. The diggings were
now carefully covered and tamped. Leaves, twigs
and fallen branches were scattered about to conceal the
operations. An oil claim had been salted.
In the next few weeks the schemer and his confed-
erate guided a number of small parties of prospective
stockholders to the claim. An unmistakable oil scum
floated on the pool, and when it was allowed to run175
Oil and Your Money
off and the brook redammed the scum gathered again
No doubt this oil had been seeping so for generations.
The promoter organized a company capitalized at
five millions. To those who questioned so great a
capital he made the usual explanations. It might
prove advantageous to buy up great tracts of land
in all directions from the present small property.
Who was to say at what point along the creek’s course
the seepage was coming from the earth? Examina-
tions would have to be made and the land all along
the creek might have to be bought up to keep others
from sharing in the wealth. All this would take
money. If a great development were to prove neces-
sary it would be better to have a company amply
capitalized. On the other hand, if small money would
put the thing on its feet no one was more anxious than
he to keep out unnecessary sharers in the spoils. These
arguments have always quieted the fears of foolish
people. They did in this case. Incorporation was
for five million shares at one dollar, with half the
stock for the promoter.
In six months he and his confederate had taken in
about 900 local people for a total of nearly $200,000.
With this money some shacks were built on the land
and options were taken on property upstream from
the original claim. The natives wondered what any-
one wanted with options on their useless land, but
they pocketed the money and kept their peace.
Now with the money of 900 Western dupes safely
in his pocket, the promoter had laid the groundwork
for the great coup he had been planning from the
beginning. Supplied with photographs, reports, let-
ters of approval from his dupes and all manner of176 Confessions of a Confidence Man
fabricated evidence, he set out for New York. As
soon as be had established himself in offices in the
Wall Street district the wily promoter began to recan-
vass his stockholders in the West, not for the purpose
of selling additional stock this time, but to sound out
the confidence of his victims. What he had to know
now was what proportion of his original investors
might be likely to dump their shares on the market,
once they saw a profit. This was a very important
consideration, for he planned to put his utterly fraud-
ulent shares on the curb and bull them. He must
know in advance how much of the Western stock was
likely to be offered, for he must be prepared to buy
all offerings and thus protect his artificial market. He
had, to be sure, nearly all of the $200,000 paid for
stock by the St. Louis victims, but this sum was not
too large for the ambitious program he had in mind.
The promoter’s correspondence with his Western
stockholders soon convinced him that the general rule
would hold good in all but a few cases. Men who buy
oil stocks at one dollar seldom think of selling when
they see the market at two dollars. Instead they hold
for four dollars, and when the quotation reaches this
figure they resolve to wait for eight dollars. The
promoter has seen to the establishing of this psychol-
ogy. His initial claims have been so magnificent that
most of his investors expect to get fifty or one hundred
dollars for their one-dollar shares. They hold on
through any market and eventually hold the sack. The
schemer convinced himself that not two per cent of
his dupes would sell at any reasonable figure. Now
he was ready for the magnificent adventure.
In rapid succession he arranged with different curb177
Oil and Your Money
brokers for the handling of his stock. These men
all knew that here was a grossly speculative affair, at
least, in which the quoted prices would be absolutely
arbitrary and created by washing of stock which never
passed out of the hands of the promoter and his hire-
lings. This knowledge notwithstanding, they under-
took to work his campaign for him.
More than that, they charged him very low com-
missions. Some of these houses make a great part of
their money out of stock washing and they are not
particular.
These preliminary arrangements made, the promo-
ter flowered out one morning with the usual advertise-
ments in the morning newspapers. He announced
the curb listing of his stock, trumpeted the fictitious
claims of his company and promised advances in price,
urging all to buy while the buying was good. When
the market opened his five brokers immediately began
offering and dealing in the stock. The one-dollar
shares plunged into their curb career at two dollars
and fifty cents and the stock closed the day at two
dollars and seventy cents. On the face of the market
hundreds of shares had been dealt in. The truth was
there had not been a single bona fide sale of a share.
That was quite as expected. The second day the stock
went past the three dollar mark and speculators began
to take notice. Now the campaign began in earnest.
Newspapers in all the principal cities carried con-
stantly larger advertisements of this oil stock. And
the market went slowly but surely higher. It touched
four dollars and trading actually became brisk. Most
of the transactions were still fictitious. In fact, the
washing was on a greater scale than ever, but the178 Confessions of a Confidence Man
public was becoming interested and the promoter was
selling off some of his two and one-half millions in
stock.
In a short time the market price of the stock reached
five dollars. A stampede of buying ensued. The
original stockholders, instead of selling and taking
their profit like men wise and cautious, bought heavily
at four and five dollars. In the climbing market they
saw the substantiation of the promoter’s vaunting
claims. He had spoken truly. Their shares would go
to one hundred dollars. They held on like grim death
and bought ever more.
In New York the situation was quite as favorable.
Some speculative buyers naturally took short profits.
Having bought in at four dollars they were willing to
sell again at five dollars. The promoter bought the
proffered stock through his curb brokers and protected
his market. Other sharpers on the curb began to sell
the stock short. The promoter soon saw that these
jackals were eating out of his purse. He immediately
demanded delivery of the shares. The short sellers
had none to deliver and were caught at a forbidden
practice. Thereafter they let the stock alone and the
wily promoter went on his flagitious way of profit.
The stock continued to rise. It touched five dollars
and fifty cents and six dollars. The roar of mighty
claims Continued to resound in the newspaper adver-
tisements and the sheafs of mail which went out from
fifty stenographers to all who had bought the shares.
More and more amateur speculators in every sizable
city bought the stock. It touched seven dollars. At
this price many shrewd buyers unloaded, but the
schemer’s receipts were now so large that such bits of179
Oil and Your Money
caution no longer discommoded him. He broke the
market slightly and then started it back up.
The man understood perfectly that so long as he
maintained a rising market not five per eent of those
who had bought the stock would sell. Greed, greed,
relentless greed possessed the whole speculating crew.
A stock that could rise from two dollars and fifty
cents to seven dollars steadily, month after month,
with hardly ever a bad day, must have solid virtues
behind it. Such a stock would surely go higher. Let
us hold what we have and buy more. So the lambs
summed the situation.
By this time the promoter was able to judge the
psychology of his market accurately and to calculate
his percentages. He found that about ten per cent
of the income was eaten up in protecting his market.
Another fifteen per cent was taken by the brokers’
commissions. Constant washing of thousands of shares
runs up the intake of the curb houses. The advertis-
ing and overhead consumed twenty-five per cent more,
leaving just an even half of all receipts for the pro-
moter. Remember, he was selling his own two and
one-half millions of shares, not the treasury stock of
the company. Since he was able to vend this stock
on the curb at from two dollars and a half to seven
dollars—a probable average of five dollars a share—
it will be seen that his two and one-half million shares
had an exploitation value of $12,500,000. Supposing
that the promoter might stick it out till he had sold
all his stock, he might on this basis take down a per-
sonal profit of more than $6,000,000—a lot of money
to take out of a forty-acre woodlot and two barrels
of crude oil.180 Confessions of a Confidence Man
But the promoter did not drive his ridden horse
to the limit. He had cleaned up more than four
millions when he decided it was time to come the
clean-up. He now hastily summoned his dummy board
of directors, dominated by himself and his original
confederate, and proposed that the bona-fide stock-
holders, who had paid money for their shares, be put
in charge of the company. A dozen simple people
who had bought most heavily of the stock were elected
directors and officers of the company. The promoter
stepped down from any official emoluments and left
the concern to those who owned stock. These unhappy
men were flattered to be elected to office in so pros-
perous a corporation. They felt themselves suddenly
risen to financial election. They were no longer
butchers and clerks and physicians, but financiers.
There was a meeting of the new board at which
nothing much was done beyond the passing of a reso-
lution of confidence in the promoter—the man who
had made this wonderful company a success.
I regret to tell you that the cunning schemer then
and there retired from the field and left it to his
successors. The work and worry of his campaign
had worn him out and he sailed for Europe to take
a long rest. On the curb the shares still stood nomi-
nally at seven dollars, but if one came to sell he
found no market. If he offered his shares at six or
five dollars he was surprised to find that there were
still no buyers. The support had gone from under
and the whole monstrous inflation collapsed. In vain
the directors tried to throw the treasury stock on the
market, to develop the property in which they still
had childish faith. A visit to the place disclosed that
BBHMMi
Oil and Your Money	181
the oily scum no longer gathered on the pool. The
schemer’s confederate had long since dug up the
barrels, torn up the pipes and destroyed the evidence.
Here was a scheme in which victims had been allured
by two of the three common systems used in oil-stock
promotions. The confidential canvass had been em-
ployed to attract the Western stockholders, who yielded
the money with which this man financed his greater
flare in Wall Street, so that one set of unfortunates
paid to accomplish the discomfiture of a larger group,
and in the final stampede the original gulls allowed
themselves to be further bled. Therein lay the novelty
of this scheme. The final washing of the stock on the
curb was no more than the usual thing. It is done
every day with dozens of bogus stocks. Yet the public
is ever willing and woeful.CHAPTER XIII.
THE GOLD BRICK, MODERNIZED.
0 some it may seem astounding that such tricks
as all these succeed; to a much larger number
the thing will not fall strange at all. I verily
believe that two men out of every three over this broad
and populous land have been made to pay tribute to
some form of con—great or small. I myself, for all
my playing from the inside, have been taken in by
rascals no more clever than the street vendor and
tricked by a belated gentleman who needed to sell
his watch at a great sacrifice. Deep down in all of
us there is that fundamental impulse for chance taking
which is pedestaled on greed and the sense of the
romantic. When I look back upon my fuscous days
I am shaken with a laughter of wonderment.
I have seen two brothers rise to vast and venal
celebrity in New York in a way to astound the most
credulous. These boys came out of a somnolent Mis-
souri Valley town, where one had been a drummer
with a penchant for the bookmakers and the other
a haberdasher. A small account in the comer bank
had been their nearest approach to finance. If they
knew the difference between a bond and a share of
stock before they hit New York I am mightily sur-
prised. Yet they set themselves up in an office
183184 Confessions of a Confidence Man
building, sent their advertisements broadcast over the
country, raked in several millions of dollars. A pair
of untutored small-town boys had taken in many thou-
sands of good, honest, shrewd people, all quite up to
the average of insight and intelligence, I assure you.
Worse yet, within six months a man set up the
claim in the great and cynical city of New York that
he had discovered asbestos deposits on a large estate
on Staten Island, which is part of New York City and
only a fifteen-minute ferry ride from Wall Street.
The truth was that on this property there were strati-
fied rocks containing minute deposits of asbestos—
about enough to make the recovery of a dollar’s worth
of the material cost fifty. Yet this schemer formed
a company and hawked his stock in New York.
One Sunday afternoon the promoter was showing a
group of about fifty stockholders over the property,
j)ointing out big bowlders of limestone as solid chunks
of asbestos. Unhappily the owner of the estate had
returned unexpectedly from the West. From his ver-
anda he saw the numerous party prowling about in
his cow pasture and was naturally led to saunter over
and discover what the sudden interest in his thistles
might portend. The promoter assured him that these
were the stockholders of a mining company who held
an option on this land for the removal of the asbestos.
From whom had this option been had? From the
owner, to be sure. And who was the owner? Mr.
John V. Blank. Mr. Blank, who did not know whether
to be amused or angry, asked the speculative gentle-
man if he had ever met Mr. Blank and, being an-
swered in the affirmative, asked'his guest whether he
noted any suspieional resemblance. The visiting stock-The Gold Brich, Modernized 185
holders withdrew. The next day Blank complained
to the district attorney, who notified the promoter
that his stock selling must cease. Word of it got
into the newspapers. In spite of all this the promoter
continued to sell this worthless stock and the public
continued to buy it. The offices of the concern had
to be raided, the doors padlocked and the promoter
cast into jail before the public credulity caught its
brakes.
Verily there is no limit to the vacuous guilelessness
of mankind. But perhaps you think there is. Surely,
say you, there are forms of confidence gaming which
can no longer succeed anywhere. Certainly no one
in these days would buy a gold brick, for instance.
Listen, my children, and you shall hear.
In the dying months of 1920, Josiah Jones, a gentle-
man full of years and crotchets, swore at his nurse
for the last time, turned his face to the wall and
passed, let us admit, to a better world. Life had
dealt not gently but substantially with Josiah, and he
left his only nephew something like $150,000 to ease
the younger man’s grief. Josiah had been a solid
rather than a prominent man. The local newspapers
announced his passing and chronicled the facts and
figures of his will. The city journals contained a
paragraph each about Josiah’s dying and devising.
Most men wondered whom this ordinary event might
interest. Of that again.
Josiah had been dead three or four weeks and his
nephew was just come into possession of the estate
when a telegram arrived from Arizona addressed to
the dead man. The nephew naturally opened it and
read with puzzled and startled eyes:186 Confessions of a Confidence Man
‘ f Congratulations. Claim turns out all expected and
more. Letter follows. Strictest secrecy necessary.”
Young Josiah was a badly confused heir for the
five days required for the passage of a letter from
Arizona. At last came the day and the epistle, in
a large envelope, carefully addressed and backed,
registered and sealed with dabs of wax. Young Josiah
took this portentous-looking thing into a slightly un-
steady hand and tore it open. He found this letter,
written in ink, with some misspelling and regrettable
solecisms in punctuation :
“Dear Friend: It gives us great pleasure to tell you
the great success that has just come our way. Again
congratulations and thanks^ Our venture has turned
out wonderfully—past all our expectations.
‘‘We had nearly used up the last two thousand you
sent us when we hit the yellow stuff last Thursday.
We struck a ledge that is the richest thing we have
either of us ever seen in this country. In four days
we have taken out by hand about $80,000 in gold
values. We have all this gold in hand and will do
nothing in the way of disposing of it until you are
here to receive your half interest.
‘‘Would suggest that you come at once if you can,
as this matter is of the greatest importance and a lot
of things have to be done quickly and quietly. We
think we’ve got a mine that will develop millions.
“You understand how strictly confidential all this
is. More than that, there are certain details that must
be attended to before we are at all safe. Our mutual
interest demands secrecy for the present.
“Can you come at once? Are at Blank’s Hotel aasasssammsa
The Gold Brick, Modernized 187
usual. Please let us know at earliest convenience.
Hurrah! ’ f
Young Josiah trembled with excitement and a fine
cold perspiration developed between his shoulder
blades. It was not at all strange that his uncle had
never said anything of this mining venture of his.
He was secretive by nature and resented the slightest
inquisitiveness on the part of his prospective heir. So
he had been venturing in gold mines and now he had
struck it rich after he was dead and gone. Well,
well!
Young Josiah wondered just what he ought to do.
He felt like consulting the family lawyer. Should
he? Strict secrecy was enjoined. Perhaps he had
better not be rash. Evidently Uncle Josiah’s partners
in the West did not know of his death. Well, until
things cleared up a bit it was better so. With the
old man dead, they might try to do his estate out of
its rightful share. The longer he pondered the affair
the more young Josiah was convinced that he ought
to go West as his uncle’s representative. Next morn-
ing he sent this wire:
“Unable to travel. Am sending my nephew with
full power to act for me. Will leave Tuesday evening
at seven-thirty; arrive Sunday night. Please meet
him at train.”
That night there was mirth in Arizona and the
desert hills shook with joy. The prospectors laid by
all care and drank the health and uninterrupted pros-
perity of Josiah. True, old Josiah was dead this
month or so and had gone where health might be a
matter of indifference to him, but the thought of188 Confessions of a Confidence Man
prosperity, it seemed, had charms to make his spirit
transcend the tomb.
“All of which proves,” observed one schemer after
his fifth imbibition of purest bootleg, “that the dead
are alive.”
“Or the live ones dead from the neck up,” sug-
gested the other into his glass.
Such candor convinced them both that they had
been drinking too much and they went off to their
rooms and to sleep. In the morning one man set out
for the mining claim and the other took himself out
and sat for hours in the sun acquiring a tan which
the circumstance of his very recent arrival from the
East had denied him. A delicate pallor might strike
even young Josiah as unsuited to a rough prospector.
So he continued to sit in the sun. The days passed,
and the nights. At length came Josiah—bag, baggage
and anxiety. The sun-tanned gentleman greeted him
as he came from the step of his Pullman with a hearty
Western handshake and much outpouring of enthu-
siasm. After a session of explanation and a drink or
two of such stuff as made the delicate lining of Josiah’s
interior quiver with resentment the newcomer wras
put to bed. With the first trickle of dawn he was
set astride a horse and the schemer led the way to
the wilderness. That night they camped out on the
mesa. The next morning they began the ascent and
about noon they joined the other man in one of the
loneliest, man-forsakenest bits of scenery on file in a
county clerk’s office.
With great solemnity and careful searching of all
the horizons the two confederates led Josiah into a
cut and showed him a place where yellow-looking stone
The Gold Brick, Modernized 189
and gravel had been disturbed. This, said they, was
the outcropping of their mine; this was their ledge;
that stuff was gold ore. And how was Josiah to know i
One doesn’t acquire a speaking familiary with iron
pyrites on Boston Common.
Once more the hardy Westerners searched the dis-
tant sky line for possible peeping coyotes before they
led the breathless Josiah into a natural cavern. Here
they scooped away the earth, drew forth a box, threw
back the lid and disclosed to the eyes of the astounded
young man a sight which no man ever forgets—his
first glimpse at a hoard of gold. There lay the precious
metal before the man from the East, grinning at him
with a cold red balefulness, coquetting him with treach-
erous bright eyes—$80,000 worth at least, he was
told.
The two swindlers explained their method of mining.
They had stamped the ore by hand, which wasn’t
hard to do as it was nearly pure gold loosely held
together. Then they had melted down the metal and
poured it roughly into holes they had scooped out in
the sand. That was why the ingots were rough and
uneven. But see how they shone with the untarnished
brilliance of the noble metal!
“Feel the weight of the dern stuff,” suggested one
of the pair, tossing one of the ingots at Josiah.
“Cut into it with your knife,” added the other.
“It’s as soft as lead. The simon-pure stuff.”
Young Josiah did as he was bid, wondering more
and more.
They sat in the grotto and talked. Evening came.
One of the men got out a skillet and some rough pans
and gave Josiah his first rasher of bacon cooked in190 Confessions of a Confidence Man
the wilderness and his first taste of biscuits from a
camp oven. They went out and watched the purple
gloaming wander over the mountains and the retreat-
ing desert. They let nigrescence and complete black-
ness steal over them without noting or caring. The
stars were spread above them in a golden fresco. The
moon boiled up out of an aureous floor. One of the
conspirators lay back on the cool stone and began to
sing from a pleasant throat. He sang joyously and
blithely, like a man who has tasted “triumphant love,
effective enterprise.” And the spirit of his voice
went into Josiah.
After a while they went back into the grotto, lighted
a fire at the mouth to take off the chill and had a
good confidential chat.
“Let’s put the stuff away first,” said one of the
confederates as they sat down to their deliberations.
“Don’t,” protested the other. “Let it stay. I like
to look at it and know it’s mine.”
He patted the ingots fondly and Josiah decided
that he was a man of sentiment. But they got down
to business presently.
“I suppose your uncle has told you how we met
and got together on this thing,” the songster began.
“Don’t believe he has,” ventured Josiah.
“I was back East two years ago looking for capital
when a friend of mine introduced us,” said the
speaker easily. * ‘ I told your uncle about this prospect
and he was willing to risk a few thousand. Four
thousand he put into this thing—not much, but just
what we needed. We couldn’t have got on without
him. We owe the old man a lot. But I guess he’ll
never regret the coin he lent us.”The Gold Brick, Modernized 191
“So that’s how it happened?” said Josiah medita-
tively.
“That’s the way,” said the other. “Wonder what
the old man’ll say when you come trooping back East
with $80,000 worth of gold in your baggage! ’ ’ He
laughed in anticipation.
“You don’t mean that I’m to carry that gold?”
said Josiah in alarm.
“Certes,. m’boy,” said the other conspirator.
“That’s what you’re here for.”
“But,” argued Josiah, “why not sell it here and
send uncle’s share back by check ? ’ ’
“That’d be better,” said the first speaker, “except
for certain facts which we’ll explain. I asked your
uncle to come out here for very good reasons. He
wouldn’t need explanations, but you’re new to this
and I suppose you do. We can’t sell the gold here,
because if I go to an assay office or a bank and try
to dispose of this stuff the first question will be where’d
I get it. Then I’d either have to tell w’here my mine
is or they’d take me for a thief.”
“But why not tell where our mine is?”
“Good Lord!” ejaculated one plotter.
“That won’t do,” said the other.
“But it’s our mine—or yours, isn’t it?”
“Sure as you’re born,” said the first speaker, “but
in this state there is such a thing as an apex law. I
don’t suppose you know what that means. I’ll ex-
plain : The law is that a gold vein belongs to the man
who owns the claim at the apex of the outcropping.
If gold crops out on my land and the same ledge or
vein crops out on yours and your land lies higher
than mine the gold belongs to you under the apex law.192 Confessions of a Confidence Man
The law was passed to keep people from digging gold
out of a mine that happened to run under their prop-
erty when the vein had been discovered and was being
mined by others. There had to be some way of deter-
mining the ownership and it suited the interests of
the time to pass the law.”
“Well,” interposed Josiah, “we’re pretty high up
here.”
“We are,” agreed his informer, “but others are
higher and it happens that our gold vein crops out
on the claim just next door. The man that owns it
don’t know about it, but we do. The minute we dis-
close that we’ve found as rich a ledge of gold as this
is there’ll be ten thousand people up here, the apex
of the ledge will be found and we’ll be done. Get
that?”
Josiah gazed at him in silent understanding and
terror.
“That’s the reason for secrecy,” said the other man.
“I begin to understand,” added Josiah.
“Now then,” the speaker resumed, “what we’ve
got to do right off is to get money to buy that next
claim and several others right round us. We want
this whole thing for ourselves. There’s a hundred
million of gold in that ledge and it’s all for us if
I’ve got anything to say about it.”
“You bet!” agreed Josiah heartily.
“Then there’s just one thing to do,” said the sup-
posed miner. “You get the money from your uncle
to buy this land and we turn over all the gold. You
take it back East, where your uncle is well known and
can dispose of it without trouble. By the time you
get there we’ll have the apex and all the surroundingThe Gold Brick, Modernized
193
claims under title and the golden goose will be laying
for us and nobody else.”
‘‘How much will it take?” asked Josiah.
“At least $40,000,” was the reply.
The young man from the East whistled and con-
sidered.
* ‘ I can’t do that, ” he said finally. ‘ ‘ Forty thousand
dollars is too much to risk on a gold claim.”
“Risk?” exploded one of the pair. “Where do you
get that stuff? Ain’t you taking $80,000 worth of
gold with you? It’s us that’s risking.”
Josiah sniffed a little at Western grammar and
remained unconvinced.
“You see,” the smoother conspirator began, “my
partner here is right. There’s $80,000 worth of gold
in those ingots. No trouble about proving that. Half
of it, or $40,000 worth, belongs to us aud half to your
uncle under our agreement. Now all we ask is that
you get us cash for our part of the gold without
letting our secret out here and ruining us all. To
be fair, you ought to pay us more, since your uncle
must put up his half of the expense of buying the
adjacent claims. But we don’t stop to quibble about
that. The old man is square and we’ll be all right
when it comes to settling up. We know we can trust
him and he knows the same about us.”
“If we wasn’t on the level, why did we send word
when we found this stuff?” interjected the second
man. “We coulda kept our mouths shut and ducked
with the whole thing.”
Josiah was trembling between decisions. Every-
thing looked favorable. The gold lay there glinting
at him and filling him with impossible seductions. Yet194 Confessions of a Confidence Man
he was by nature cautious. And his caution prevailed.
“I’m afraid I can’t do it, gentlemen,” he said at
last.
“Well,” said the leader, “we’ll have to wire your
uncle then and take a chance on our telegram being
read. We can’t let a thing like this slip away from
us.” The hurrah once again.
Josiah was caught. He was practicing deception
as to his uncle’s death. A telegram sent East would
fall into improper hands, or it would remain unre-
ceived, be returned and thus betray his game. He
had to make his decision. All night he tossed in his
blanket and went half distracted with uncertainty.
He went off to sleep at last with one question: Was
it really gold ? He woke with the doubt on his lips.
“How do I know that stuff is gold?” he demanded.
‘ ‘ Ha, ha! ” laughed one of the pair rudely. ‘ f Whad-
daya think it is—tin ? ’ ’
“It can do no harm to take a chunk or two to a
jeweler and have it tested,” said the other. “Pick
out any of the pieces.”
In reply the man who sat by the heap of ingots
carelessly tossed Josiah two pieces of metal, one large
and one quite small.
“These do?” he inquired nonchalantly.
“Yes, thank you,” said the polite Easterner.
“All right, put them into your bag,” said the
speaker. “My partner will load the rest on his horse
and take it straight to the hotel. When you’re con-
vinced it’s gold we can weigh the rest without taking
it out of a bag and easily find out the total value. We
must be careful. ’ ’
So an agreement was reached. In two days theyThe Gold Brich, Modernized
195
were back in town and that afternoon the confederates
went to an assayer and had both the ingots drilled to
the heart and tested. They were practically pure
gold and worth a little more than twenty dollars an
ounce, unrefined as they were. An hour later the
whole hoard was put into a wheat sack and dumped
on a butcher’s scale in the main street. The total
weight was nearly three hundred and fifty pounds
avoirdupois. A little rough calculation done in
Josiah’s room at the hotel convinced him. Four thou-
sand troy ounces would yield $80,000 or better. He
had somewhat in excess of this. At last he felt satis-
held. The ingots were turned over to him on the spot
and he fondled them one by one as he counted the
whole number into his trunk. With clothes wadded
xuider the precious burden and more piled on top he
felt reasonably secure.
It took nearly two weeks to draft forty thousand
dollars from his home, during which time he slept
fitfully and never ceased to watch the trunk. He
suspected everyone. He imagined his partners might
open his trunk and substitute other ingots—in which
he did them a cruel injustice. Finally the money
came and the vigil was over. He inspected his chunks
of gold once more and found them the same. Then
he turned over the money, got aboard his train with
his precious trunk checked and insured and set out
for the East.
Two ingots weighing respectively twenty-three and
eight ounces were found by an Eastern subtreasury
to be of pure gold and worth about six hundred and
fifty dollars. The other rough castings, weighing four
thousand ounces, were of finest brass beautifully gold196 Confessions of a Confidence Man
plated. Their value was negligible. Never had it
occurred to the cautious Josiah that plated gold bricks,
of which he had heard so much, might be made in this
rude form.
These two swindlers are among the most celebrated
con men of the day and the only gold-brick operators
still in the field, I believe. They were spending the
winter—and summer—season in Atlanta when I was
down that way recently. I spent a good deal of time
in their society and they told me this flagrant story.CHAPTER XIV.
THE people’s LIBERTY BONDS.
HE close of the world war, in the course of
which many billions of dollars’ worth of Liberty
Bonds had been distributed into the hands of
people who had never before owned and perhaps never
seen a security, brought about one of the greatest of
our eras of swindling. My confidential brothers went
out into all parts and levels of the country and pro-
ceeded to take the “good as cash” government bonds
away from their innocent holders by every device
known to the fraudulent profession.
This operation -was, by the way, in no sense confined
to such men as are commonly rated as crooks. We
know to-day that the whole financial organization was
intent on what is called getting securities into strong
hands. To that end the market was depressed and
government securities whose value was no more to be
questioned than the credit of the nation went down
as low as eighty-two dollars in the hundred. Many
innocent holders became alarmed and sold at such
prices. Many others were forced to pocket this loss
when they needed to convert their securities into cash.
To-day the bonds are back at par and better. The
gentlemen who know money and the market made a
fine killing.
197198 Confessions of a Confidence Man
But I am more interested here in the work of the
confidence men and the raw games they began playing
back in 1918 and are still playing. The underlying
purpose of all such games is, 'of course, to get foolish
people to exchange their government bonds for worth-
less stocks. During the great oil boom of 1919-1921
billions of dollars’ worth of government bonds were
thus traded and their foolish holders mostly still
nourish the sad notion that the blue sky stocks they
hold are somehow going to he worth something.
I am not overstating the amounts when I speak of
billions of dollars. Mr. Edwin P. Kilroe, assistant
district attorney of New York County, who was in
charge of the prosecution of stock swindlers when the
oil boom and the attack on the people’s bonds was
at its height, told me that not less than half a billion
a year was being lost in New York alone. Again, Mr.
William Winter, counsel for the Associated Advertis-
ing Clubs of the World, an organization which investi-
gates and exposes stock and other frauds, estimated
for my collaborator that the annual capitalization of
oil companies in this country for 1919, 1920 and 1921
was in excess of 3 billions a year. Of this total more
than 2 billions per annum was the stock of thoroughly
bogus companies, which never turned back a dollar to
the people who paid money for it or gave Liberty
Bonds in exchange. The colossal size of these losses
needs to be remembered by everyone who reads my
revelations.
As I may have said before, the man who robs his
dupe by an utterly worthless stock proposition, on the
market or off, is just as much a confidence man as the
veriest bunco steerer who ever sold his rustic theThe People’s Liberty Bonds 199
Brooklyn Bridge, the Masonic Temple or the power
rights to Niagara Falls. All this enormous skinning
of the public comes under the head of eon. It is true
that present-day laws do not reach the speculative
swindler with any degree of effectiveness. Those of
this crew who go to jail are few and sparsely strewn.
Our attitude toward business morality has not yet
reached that point where a successful crime is as
heinous as a miserable failure. But the day of the
saner justice will come and I should not be surprised
to see it rise out of the present situation.
Perhaps the commonest of all the Liberty Bond
frauds was accomplished by what is politely called
understating the market. A so-called broker sets up
an office and advertises that he buys and sells Liberty
Bonds. Such schemers generally attract only the most
humble and ignorant, but it seems there are endless
human unfortunates in this class, for houses of this
sort sprang up in every part of the country. New York
City alone numbered hundreds of them, and the me-
tropolis likes to believe that its inhabitants are at
least as wise as the run of Americans.
Let us say that some poor devil who bought a fifty-
dollar or one-hundred-dollar Liberty Bond must have
money immediately for his rent, for a case of illness,
for any of the thousand small reverses that come to
the humble. He went to the nearest bond buyer and
offered his security. It was then off a few points in
the market, to be sure. The broker magnified this fact,
said the bonds were bad, the people had been cheated,
the Government had done things amiss. He wrung
his hands and was very sorry for his client, but it
was doubtful whether he could find a market for the200 Confessions of a Confidence Man
bond. He would try, however. Would the client call
to-morrow ? The unfortunate could wait, as the sharper
well knew. He must have money at once. He pleaded,
allowed himself to be haggled with and bullied, and
eventually sold a bond worth fifty dollars for thirty.
Cases have been recorded in which people were duped
into selling Liberty Bonds for one-tenth their value.
Many persons of this same class, including hordes
of foreign-born citizens, knew enough to realize that
Liberty Bonds have a borrowing value. But these
good people had no bank accounts, no ready access
to banks and no friends who could introduce them.
Moreover they stood in awe of the banking house, with
the result that they resorted to the advertising neigh-
borhood broker, who often was a crook. Here the
owner was persuaded to take perhaps half the value
of his bond as a loan. If he was lent some fairly
decent amount the broker charged him an exorbitant
commission. In one case which came to my notice six
hundred dollars was lent on a one-thousand-dollar
bond, but in addition the broker charged a one-hun-
dred-dollar commission, pleading that it was almost
impossible to get the money out of the bond—there
were so many in the market. So he had a one-thous-
and-dollar bond for five hundred dollars. The next
day he had sold the bond, pocketed the stolen profit
and moved his office.
In other cases the broker followed this identical
procedure, except that he did not decamp. When the
loan was due he demanded payment. In three cases
out of four the borrower wished to pay the interest
and renew the loan. He was refused, to be sure, since
his bond was sold the very day he hypothecated it. If|g§jig3£S£BEKB3i
The People's Liberty Bonds 201
a borrower came in and laid down the cash various
pretexts were used to put him off. If he knew his
rights and became too troublesome a bond of the
cheapest issue was bought and he must be satisfied
with it, but in most cases he was no match for the
swindler and took his loss.
These frauds are so simple and barefaced that they
have almost no place in the quasi-respectable company
of con, but they were worked in so many thousands
of cases that I cannot disregard them.
One of the most pathetic and yet astounding cases
which have come to light concerns that once high and
luminous figure, Dr. John Grant Lyman, certainly one
of the most opulent personages in confidence history.
A few years ago this man rolled in spoliated millions,
owned a string of horses, lived like a maharaja and
dreamed of being admitted to the Paris Jockey Club.
From that he fell to the kind of fraud men go to
jail for. After his release he descended to ordinary
get-away games, though for large stakes. These are
swindles so crude that the perpetrator plans fight from
the outset, like a housebreaker. Lyman was caught,
to be sure, and sent to Atlanta for a short term. On
his release he was utterly without funds. He had the
irrepressible need of money, the overweaning desire
which explains the acts of so many criminals who get
caught. Lyman went from city to city, setting up as
a Liberty Bond broker. Innocent people brought him
their bonds and he uttered worthless checks for them,
taking to flight as soon as he had made a few turns.
He was captured in Baltimore and sent to prison for
ten years—this fellow who was once rated a genius
in the Street.202 Confessions of a Confidence Man
J. Frank Lilly, whose curb brokerage house failed
in New York in 1919 for $1,500,000 had taken Liberty
Bonds as margins for stock trading from several thous-
and persons.
Instead of using the bonds for this purpose he is
said to have bucketed the orders of his customers and
used their collateral for his own trading on the bigger
market. He was overwhelmed by his own losses and
the claims of his bucketing clients, and fled. Then
began that sad procession of victims in and out of the
offices of the helpless and distracted district attorney,
that doubly sad procession of people, shorn in one
slash of their money and their inflated dreams.
But by all odds the simplest form of swindling in
Liberty Bonds in which another supposed security is
used is that known as the plain trade. Probably half
the great total of persons who bought the government
securities have been approached with this game. It
involves nothing more than the constant and repeated
booming of some highly speculative and usually worth-
less stock, carried on until the victim is hypnotized
into exchanging his bonds for stock. For a little while
the wholly fictitious market is kept going in the right
direction. The purpose of this is to induce still further
exchanges. Finally the bottom drops out under the
stocks and the former bondholder finds himself
stripped of his savings. The arguments, convincers,
tricks, false reports and other devices employed to
bring about these trades are almost as various as the
kinds of human stupidity. How many thousands of
honest people have been tricked no human being
knows.
But it is not always so easy to trade men out ofThe People’s Liberty Bonds 203
their bonds, particularly those prosperous enough to
own these sterling securities in larger amounts. For
the benefit of such people several variants or compli-
cations of the trade are employed. The most common
form of the complicated-trade game is accomplished
as follows:
A broker canvasses by mail a large number of
persons known to have Liberty Bonds or to have
bought them. How such names are procured will be
considered hereafter. After 'some tempting through
the mails the victim is approached by a salesman, who
tries to talk him into exchanging his bonds for a
stock. He does not succeed at the time. The mail
canvass continues and the stock is arbitrarily ad-
vanced in price from day to day. After a stock
which was originally offered at one dollar, let us
say, has been boosted to three dollars the salesman
returns.
Now the stock has never been quoted on any market
anywhere and has no salable value whatever. It has
been arbitrarily raised in price* on the books of the
broker. The salesman forgets this. He takes out his
quotations and shows the victim what a fool he has
been. Had he traded his Liberty Bonds for the stock
when it was a dollar a share he would now have
trebled his money and he could if he so desired buy
three times as many Liberty Bonds as he possessed.
What a fool has this man been to hold bonds that are
paying a mere four and one-quarter per cent! Will
he persist in such folly?
In most cases the victim is overpersuaded and yields
at least part of his bonds. The market continues to
go up and he is stripped of his honest savings bit by204 Confessions of a Confidence Man
bit. The stock remains •with him as a token of his
folly.
This general scheme may be varied and made com-
plex and infinitum. The case of a Chicago gentleman
will illustrate: He had invested about four thousand
dollars in the first Liberty Loan and was cheerfully
accepting three and one-half per cent when a salesman
representing what was supposed to be a reputable stock
house approached him with arguments. He was sus-
picious, but the salesman and the rank of his house
soon disarmed the investor and he was shortly led to
exchange his low-interest government bonds for a
corporate issue bearing interest at the rate of six
per cent. The dividends were paid, for the issue was
safe enough in its way, and the investor was pleased
with the salesman and ready to believe in his own
acumen. When he was asked a few weeks later to
make a second trade, by which he converted his bonds
into a preferred stock paying eight per cent dividends,
he did no more than hesitate. Three months passed
and the dividend was declared and paid.
Of a sudden he began to be bombarded with letters
concerning a highly speculative mining stock which
was just then being heavily dealt in. In a short time
the salesman, who had already made what seemed to
be advantageous trades for him, summoned him to put
his money into the mining venture. The investor had
seen the stock rise from forty cents to one dollar and
ninety cents. He was assured it would go to twenty
dollars. With some slight misgiving he invested
his whole hoard. Two months later he needed a little
money and went to take a loan on his stock. The
bank declined the security and he determined to sell.The People’s Liberty Bonds 205
I regret to record that once again there was no market.
The supposedly reputable house had been a common
stock-washing concern. I ask my readers whether this
is not a complete con game, with all the elements of
built-up, convincing and hurrah.
Are we to suppose by any chance that such stock
houses are few or that this game has been played only
here and there? Emphatically not. This very trick
has been worked in every part of the country, and to
what extent may be judged from the case of a broker
who is now awaiting trial. . This man is charged w’ith
having bought a large block of oil stock from the com-
pany at fifteen cents a share. He thus became an
underwriter, with a strong inflection on the under.
The broker is charged with having thrown this stock
upon the curb washboards at an initial price of fifty
cents and with having run it up as high as six dollars.
At prices between these two figures he disposed of all
or nearly all his shares. Then he stepped from under
and the market collapsed, causing losses of very nearly
two million dollars. One man was worked up to the
point of converting seven thousand dollars in Liberty
Bonds into this stock, having been led along by gradual
stages.
Precisely the same tactics were used in a Western
mine promotion, where the stock was run up to eight
dollars for the purpose of unloading 750,000 shares of
promotion stock. When this had been done the stock-
holders found their shares valued on the market at
four cents.
These then are the variants of the common order of
swindles aimed to deprive the public of its securities.206 Confessions of a Confidence Man
They scarcely begin to suggest the range and riot of
crimes against Liberty Bond buyers.
In the ranks of the criminologists—the theoreticians
of this family—are many who hold to the economic
hypothesis. They and most others are now quite con-
vinced that the major breaker of laws is not generally
a congenital defective. Taking the extreme opposite
side in the outworn debate between the advocates of
heredity and those of environments as the determi-
nants of human conduct and character, these crime
students set up the postulate that poverty is the gen-
eral cause of crime. They have made elaborate statisti-
cal studies in many countries and are able to adduce
much evidence.
In the main they are quite right, especially when
they assert that most criminals come from the lower
levels. Since most geniuses and most mediocrities must
be assigned to the same origins, I doubt the value of
the demonstration. That, however, is not the point
here. No doubt poverty and wrant induce men to law-
breaking. It is certain that famine and panic years
in all countries show unusually long crime lists. But
here is the insect in the unguent: The last few years
in this country have revealed that over-prosperity
breeds crime much more rapidly than does stringency.
Feast is worse than famine.
Never have there been so many forgeries, bank and
safe burglaries, housebreaking, holdups, sneak jobs,
common larcenies. Most of these can be traced directly
to Liberty Bonds and the surplus cash in many hands.
Never have so many automobiles been stolen, for never
before were cars in such demand at high prices.
Thefts, robberies and burglaries of silk have mademmrnmrn
The People’s Liberty Bonds 207
their appearance in great numbers—almost a new sort
of crime. The high price of silk and the great demand
for it owing to general prosperity have brought about
this condition. Finally nothing but the prosperity of
the people, and especially their little hoard of Liberty
Bonds, has been responsible for the titanic growth of
frauds, swindles and related crimes. When fat sheep
are plenty the nests of the vultures are full. Thus it
happens that quite unheard-of devices came into evist-
ence. Liberty Bonds prompted the actual invention
of schemes. Here are two little anecdotes along this
line.
In a principal New England city, at the height of
the third Liberty Loan drive, a gentleman called one
of the largest banks on the telephone.
“This is Mr. Blank,” said he. “I am a depositor
in your bank. ’ ’ The actual name given was that of a
very wealthy man with a large account. The bank
was eager to please this rich patron.
‘ ‘ With whom do you wish to speak, Mr. Blank ? ’ ’
“Someone who knows about Liberty Bonds,” said
the voice on the wire.
The clerk dealing with securities was connected and
Mr. Blank proceeded.
“I bought quite a block of Liberty Bonds the day
before yesterday----”
‘ ‘ Twenty thousand dollars ’ worth, Mr. Blank, ’ ’ the
clerk interrupted.
“Now,” said Mr. Blank, “I wish to make a present
of fifteen hundred dollars’ worth of bonds this after-
noon. I am pretty busy and I wonder if you can
favor me?”
‘ ‘ Certainly, sir. What can we do for you ? ’ ’208 Confessions of a Confidence Man
“I want to send a boy for fifteen hundred dollars’
■worth of my bonds. If I give him a note on my sta-
tionery will that be sufficient?”
‘ ‘ I don’t see why not, ’ ’ said the clerk.
“Very well,” said Blank, “I’ll send down at once.
Thank you.”
Within half an hour a uniformed messenger boy
appeared in the bank with a typewritten note from
Blank duly signed with his unquestionable signature.
The bonds were delivered to the boy, who also re-
ceipted for them.
It was three weeks later before Blank and the bank
discovered the fraud. Detectives were set to work, and
though they did not catch the swindler they discovered
his mode of operating. A day or two before the
swindle was perpetrated an unknown man had called
Blank’s office on the telephone and found that this
gentleman was out of town. Soon afterward a man
presented himself at Blank’s office and walked in past
the office boy. He asked for the rich man with an
air of familiarity and when told that Blank was absent
asked if he might write him a note. The boy brought
a letterhead and envelope and the visitor sat down and
pretended to write. In a few moments he called the
boy and asked for more paper, saying that he had
spoiled the first sheet. More was brought, a note was
left for Blank and the visitor departed. With him he
carried the letter head and envelope used in defraud-
ing the bank of Liberty Bonds. How the criminal
procured Blank’s signature, which he forged to the
letter could not be discovered.
This trick was worked in several cities in eachThe People’s Liberty Bonds 209
of the succeeding drives and the total loss was
considerable.
A similar but even more baffling game was perpe-
trated several times in New York, also at the height
of the loan drives.
Mr. Smith, who had bought five thousand dollars’
worth of bonds a few hours before, received a tele-
phone message at his office.
“This is the Downtown National Bank,” said the
voice. “Mr. Jones speaking. You bought five bonds
of us this morning, Numbers 1016 to 1020.”
“I don’t know what the numbers were,” said
Smith.
“We find,” the supposed bank went on, “that Mr.
Brown, who also does business with us, has the num-
bers just under and just over you. Ha has asked us
to get him the five bonds in between so that he may
have all his bonds in a consecutive run of numbers.
Do you mind if we ask you to let us have your bonds 1
We’ll deliver others in their place as soon as the Fed-
eral Beserve Bank opens in the morning.”
Mr. Smith was anxious to be accommodating and
said so.
“Very well,” said Mr. Jones of the bank, “if you
will be so kind I ’ll send a boy with a note, which you
can keep as a receipt for the bonds, and we will
deliver the substitutes promptly.”
In a few minutes a boy, who looked as if he might
have come from the bank, presented himself in Smith’s
office with a typewritten note on the bank’s paper and
in the regular envelope. It was signed by Jones, with
whose signature Smith was unfamiliar. However, the
depositor suspected nothing and gave the boy the210 Confessions of a Confidence Man
bonds. When no substitutes were delivered the next
day he reminded the bank of its remissness and was
shocked to hear that no one had ever heard of the
transaction.
So far as could ever be determined, this was not
an inside job. It had not been perpetrated by an em-
ployee of the bank. How the bank’s stationery and
the numbers of Mr. Smith’s bonds were procured re-
mains enigmatic.
It goes without saying that these two instances are
closely related to each other in technic and only dis-
tantly connected with con as ordinariljf|conceived.
They are in truth con games plus forgeries. In that
respect they are innovations. However, they caused
no colossal losses such as have been occasioned in
every other direction. Let us return to stock frauds,
devoting attention to those of a more complicated
nature.
It became the fashion when so many of the securi-
ties got into public possession to put up Liberty Bonds
to cover margins in stock trading. The public has a
right to believe that this practice is safe, and if the
brokerage house dealt with is one of high character
there can be no real objection. However, there are
and there have always been many brokers who im-
mediately misuse securities placed in their hands to
guarantee accounts.
Mr. Greenback, who has Liberty Bonds and likes to
speculate, goes to his broker, margins a speculative
stock at ten points and puts up two Liberty Bonds of
thousand-dollar denomination to cover his margin.
The broker at once sells the bonds, for he has uses
for any cash he can get his hands on. Instead ofThe People’s Liberty Bonds 211
buying the speculative stock for Greenback he merely
records the order and buckets it. It other words,' he
is simply betting that the stock will decline in price,
while Greenback bets on a rise. This is the situation
in ninety of every hundred cases, as fully nine-tenths
of all play is on the long, or bull, side of the market
and it is literally true that many members of the
speculating public do not know the short side, or
knowing it do not understand how to play it.
Now it may be argued that there is no actual sharp
practice here. A bet on the rising side is as good in
the long run as one on the falling side, provided all
things are even. If Mr. Greenback’s stock declines
and he is wiped out, what difference does it make
whether the actual stock was bought? On the other,
hand, if the stock goes up the broker must replace the
sold bonds or go to jail. Waiving the problem of dis-
covering the crookedness of the broker, catching him,
prosecuting him and peradventure getting back the
bonds there is much more amiss.
Mr. Greenback’s stock does rise a few points and
he hurries to his broker to take his profit and draw
down his bonds. The man if finance meets him with
a broad smile and a hearty handclasp. He congratu-
lates the delighted Greenback.
“I told you so, Mr. Greenback,” says he with a
familiar slap on the back. “We’ll get rich out of
this stock yet.”
“I think I’ll take my profit,” says Greenback. “I
know when to sell.”
“Nonsense, my dear fellow!” says the broker.
t ‘ The stock has just begun to go up. Instead of taking
your profit you want to turn right around and invest212 Confessions of a Confidence Man
your winnings. You ought to margin more of this
issue. That’s the way real money is made.”
Greenback is finally persuaded. He has won three
hundred dollars, let us say, and is induced to margin
as many additional shares as this sum will cover. The
broker has staved off a crisis and breathes more easily.
‘‘Pray heaven,” says he, “that infernal stock will
drop out of sight to-morrow.”
Perhaps the broker has means of causing the stock
to do just that. He may be washing the stock or he
may be in a pool which can afford to break an actual
market. It has been done countless times.
But let us assume for this purpose that the stoek
is a standard security and that no manipulation is
possible. Once more the broker must play for a fall
and Greenback for a jump. But still the odds are
not even.
Greenback’s stock rises again and he has seven
hundred dollars profit. He learns his luck and feels
he ought to take his winnings. But he delays over-
night. In the morning he finds a jubilant letter of
the sort known in the trades as an “I told .you so.”
The broker reminds Greenback of his heretofore ex-
cellent advice and repeats the admonition. Greenback
must take his winnings and margin still more of the
stock. And usually Greenback consents. He has faith
in the broker, who had led him on to market victories,
and he never suspects the bitter venom in the Street
man’s sack.
The unhappy stock buyer is now set out upon the
most desperate of all games, pyramiding. The more
he wins the more he wagers. In the terms of roulette
he doubles his bets at each winning. How wild such a213
The People’s Liberty Bonds
procedure is may be judged by comparison with the
gaming table. A rouge-et-noir player who refused to
take down his winnings and augmented his bet every
time the turn was in his favor would be considered
utterly mad. Yet this is what the margin player is
led to do by the broker, who is in the hole by virtue
of Greenback’s fortunate market. If Greenback stays
long enough with his pyramiding he is certain to fall
into the pit, for reactions come in every market and
they come in a twinkling.
According to all odds Greenback is lost as soon as
he enters this game and it was in anticipation of guid-
ing the customer’s steps into this tortuous path that
the broker sold off the bonds and began the bucketing.
Greenback does not know that he is betting against
his broker or that the man has every reason to mis-
guide him. He naively believes in the man of finance
and relies on his judgment. Here is the crime. The
broker trades on the confidence of his patron. He is
a peculiarly dangerous kind of con man.IPICHAPTEK XV.
MILKING A DRY BREWERY.
IN a Southern city, very much visited by Northern
travelers, a set of fraudulent brokers set up shop
last spring. They advertised in the newspapers and
soon began to issue a weekly stock paper of their own
in which they boomed a stock. Just how they escaped
jail I suspect, but cannot say. In response to their adver-
tising they got the names of people inclined to specu-
lation and at once addressed to these persons various
letters and their weekly paper. Many were soon influ-
enced to buy the stock, among them a prosperous
butcher. His investment was small—less than two
hundred dollars—and he could not be made to buy
more. But the schemers knew that the man had bought
heavily of Liberty Bonds and resolved that no such
fat victim must escape. Accordingly a salesman was
sent to see Mr. Bierman, which happens not to be the
correct name.
“I think you are making a great mistake, Mr.
Bierman,” said the salesman.
“Mebbe so,” said Bierman, “but I got enough right
now. ’ ’
1 ‘ Got all the money you want ? ’ ’
“N-o-o-o, I couldn’t said dat.”
“Then you’d better get on. The going will be good
shortly. ’ ’
215216 Confessions of a Confidence Man
The salesman used his persuasions, bought some
meat, which he gave to a shabby boy two squares
away, and returned to see Bierman another day. He
was in no hurry. Bierman wasn’t likely to move.
"When the shop wasn’t crowded the merchant didn’t
mind talking. Little by little the salesman filled him
with persuasions too effective to be permanently re-
sisted. Moreover, the stock was being fictitiously
quoted at ever-higher prices. Finally, it was seen that
Bierman was about ready for the hurrah.
“It’s now or never,” said the salesman to Bierman
as they leaned at the end of the counter. I * This morn-
ing you can buy five hundred shares for three thousand
dollars. In four months the stock will go to fifteen
dollars a share.”
“Yah,” said Bierman, “ef I vas sure it would be
all ridet.”
“I’ll tell you how sure I am,” said the swindler,
bringing up his hurrah. “If you’ll take this stock
I’ll buy an option from you. I’m willing to bet my
money along with you. Take five hundred shares for
three thousand and I’ll give you five hundred dollars
for an option at ten dollars a share any time in six
months. ’ ’
Bierman heard that he was being offered five hun-
dred dollars and his mind immediately jumped over
the intervening obstacles.
“How’s dat? Explain it,” said he.
“You buy the stock for three thousand and I pay
you five hundred for the privilege of buying the stock
back any time in six months at ten dollars a share. If
I buy you get five thousand for the stock.”
4 ‘ Why you want to do dis ? ’ ’ said Bierman excitedly.mmsmtssamssa
-—~
Milking a Dry Brewery 217
“Because I think the stock will go to fifteen. If it
does you’ll make two thousand dollars in addition to
what I pay you for the option and I’ll make twenty-
five hundred. That’s why. ’ ’
Bierman puzzled this simple thing through his mind
several times and finally grasped it—or thought he
did.
“I do it,” he said finally. “But I got to get
money. I got only Liberty Bonds.”
“Well, they’re a little off in the market,” said the
accommodating salesman, “but you’re a friend of
mine and I’ll take them.”
And he did. He had cleverly tricked Bierman into
paying five dollars a share for stock offered at six
and worth nothing. By complicating the transaction
he had blinded the victim to the reality. Bierman
opened his eyes a bit later—and so did hundreds of
others. They had all been defrauded by means of
one of those little mechanisms of con ever old and
ever fresh.
But the working of most games aimed at the Liberty
Bond owner involves knowing who has such bonds
and often the amounts of individual holdings. How
are such names and figures procured? For general
information on this point I refer my readers to my
previous consideration of the sucker list. There are,
however, several specific practices in vogue. The com-
monest is to buy lists of bondholders from bookkeepers
in large establishments where drives were held. The
employees in these places bought government securi-
ties in the course of the war and those who purchased
in any amount may be presumed to retain their bonds.
Again, employees of banks have been known to sell218 Confessions of a Confidence Man
lists of bondholders. The questionable bond brokers,
whose places have mushroomed into sight all over the
country, never fail to question a soft-looking customer
as to his holdings. It will also be remembered that in
the loan drives it was often a practice to announce
large purchases by individuals. How many times were
subscriptions cried from stages and rostrums with the
names of the purchasers. In some communities the
newspapers published the names of large subscribers
to the various loans. The gentlemen who bought the
bonds considered all this good advertising—and so did
the con men, who made copious notes.
For instance, two gentlemen of the illicit persuasion
arrived in a Central Western city six months since
with a sheaf of very handsomely printed stock certifi-
cates in a trunk. These bespoke shares in an oil claim
situated somewhere west of Suez. Let us call these
brokers Black and White. Funds were low with both
and a scheme that promised immediate returns was
needed. After some hesitation these promoters de-
cided to open two nominally distinct offices for the
purpose of playing a shuttlecock game with the stock.
This done, they began to advertise their shares in the
newspapers and by means of a mail canvass. White’s
brokerage firm began it. That operated by Black stood
by and pretended to buy loose shares on occasion.
There was no market, prices being fixed arbitrarily in
White’s office—the good old-fashioned fraud.
After some preliminaries, during which the shares
were worked up from thirty-five to seventy-five cents,
White began to attack the local public with personal
letters and salesmen. He got very little income out
of it. The town was not falling for oil stocks justMilking a Dry Brewery
then. In this crisis Black resorted to a bookkeeper
employed by a very large manufacturing concern hav-
ing about nine thousand employees. This man he
managed to bribe, with the result that he shortly had
a complete list of Liberty Bond buyers -with their
holdings. From a total of seventy-fig hundred names
Black now selected about two thousand who had
bought the bonds in amounts above five hundred dol-
lars. He turned this list over to White and a fresh
attack was begun.
Through the mails and the mouths of salesmen the
oil stock was now offered to all these two thousand
persons. When the campaign opened the price was
seventy-five cents and it was gradually advanced to
two dollars. Still very little was sold, nor was this
contrary to calculations. However, many persons had
been interested and half persuaded. White now sud-
denly changed his tactics. One morning each of his
two thousand prospects received a letter which said:
“We desire again to call your attention to --------
Oil common stock. This issue entered the market two
months ago at thirty-five cents a share. To-day it is
worth two dollars. We need not call attention to the
opportunity which you failed to seize in this connec-
tion. Many others have taken advantage of it to
their profit.”
Two days later came a second letter:
“Have you any -------- Oil common stock for sale?
The demand for this security is now brisk. We are
ready to buy any amount at the market. Offered at
two dollars. We will pay one dollar and ninety
cents. ’ ’
In a few days came a third letter, once more offering220 Confessions of a Confidence Man
to sell ---- Oil stock at two dollars and to buy it
at ten cents less. A fourth and fifth letter making
similar offers followed, all from White & Co.
Then one morning a corps of salesmen set out from
the office of Black & Co. They canvassed the two
thousand persons already prepared by White’s cam-
paign. To a prospect they represented themselves as
dealers in various stocks. They had no one variety to
offer. Black & Co. were doing a general brokerage
business. Perhaps Mr. So-and-So would like to pick
up a few shares of Anaconda Copper or United States
Steel ? No ? Then might he be interested in Standard
Oil of New Jersey at a very attractive price? The
salesman began going down his list. Without too
much delay he came to-------Oil.
“I’ve got nine hundred shares of------Oil common
at one dollar and forty cents, ’ ’ said he carelessly.
The victim pricked up his ears. That very morn-
ing he had received another letter from White & Co.,
offering to buy any amount of this stock at one dollar
and ninety cent A' 4
“How much for--------- Oil?”
“A dollar forty,” repeated the salesman, pretend-
ing to consult his list. “I’ve got a block here that
we’ve had on hand some time. Why? Are you
interested ? ’ ’
‘* If you ’ll take Liberty Bonds, ’ ’ said the dupe, “ I ’ll
take all you’ve got. ’ ’
“Glad to take the bonds at the market,” said the
salesman.
And it was done. By this means about two hundred
and thirty thousand shares of absolutely worthless oil
stock was unloaded on a single community of mediumiBMiferigmgWn«! n m
HHBmSSSn&SbBBBbB
Milking a Dry Brewery	221
size. The price ranged from a dollar twenty to three
dollars.
However, the schemes aimed at our Liberty Bonds
have not all been stock schemes. A gentle rascal
operating from New York taught the country at large
a quite different dodge.
In September, 1919, Edward Murphy, an ex-convict
with several terms to his credit, appeared in New York
and rented desk room in the offices of a real-estate
concern established in one of the second-rate buildings.
Murphy had printed a letterhead putting himself for-
ward as the “Blank Manufacturing Company, rebuilt
cars, dealers in tires and tubes and accessories of all
standard makes.” The address of the building where
the man had desk room was in one corner and below
it a telephone number which was not Murphy’s, since
he had no connection. In the opposite corner were
the words, “Factory, Newark, N. J.,” and in the
center, “Established 1901.”
Murphy procured from a jobber in such lists a
roster of physicians and dentists in small towns as
far west as the Missouri River. To several thousands
of these men he addressed a letter on his prepared
stationery. The letter said that the Blank Manufac-
turing Company had bought a large lot of a certain
kind of cars from the Government and rebuilt them
all so that they were equal to or better than new ones.
It was offering these cars at great reductions. How-
ever, it wished to make the addressee a special offer.
For one hundred dollars, half in advance and half
on receipt of the car, the company would deliver an
open or closed car with the understanding that the
recipient was to show his car at reasonable hours to222 Confessions of a Confidence Man
other prospective purchasers in his community. This
was, said the letter, an advertising proposition. It
would be made to only one physician and one dentist
in each town. However, if no reply was received within
ten days it would he assumed that Doctor Blank was
not interested and the opportunity would be offered
another man in his town. “Liberty Bonds taken.”
In six weeks Murphy received more than seven hun-
dred replies, and because Liberty Bonds were a few
points below par the astute men of the tooth and the
pharmacopoeia sent in their securities. It is said the
payments were made by bonds in four-fifths of the
cases. Calculations made afterward showed that
Murphy had taken in nearly forty-five thousand dol-
lars. To certain of his victims he had offered higher-
priced automobiles, so that in some cases he got as
much as two hundred and fifty dollars.
The post-office inspectors and the New York district
attorney descended on Murphy at the same time, only
to find that he had folded his top like a benzine Arab
and silently chugged away. He had not owned a
single car of any description and he left some of his
printing bills unpaid. Such is con’s ingratitude.
In one of the loan drives a wealthy widower made
a little capital out of a hundred-thousand-dollar pur-
chase of Liberty Bonds. So likewise did a con man
named Dunne, who chanced to be in that particular
city at the time. To the con man a person who adver-
tises his wealth is always a prospect. Ingenuous public
display of purse pride is a sure token of mental
insufficiency of one sort or another. So Mr. Dunne
believed, and he demonstrated it.
For some time no feasible plan came to him. Then223
Milking a Dry Brewery
as the brought bothered him one night and he felt like
pulling out for the North, where in those days a man
could still slake a thirst, he was bitten by inspiration.
A deserted brewery stood in this city, a dolorous, gray,
monumental place, a monitor of inebrious days gone
by. Dunne had looked at it often with a sigh. He
contemplated it suddenly with a smile. Within a few
days he had bought an option on the place for a small
sum. The agent who sold it had grinned. For five
years the brewery had been vacant. Rust was gathered
in its tanks and rust was eating the heart out of the
refrigerating plant. Who wanted an option on a
brewery out of brew, a drained flagon, a broken bowl ?
Remembering that the wealthy widower had put a
hundred thousand into Liberty Bonds, Dunne peopled
the brewery with fancies and ideas. What a fine
abattoir it would make, with its ice plant already
installed and its vats ready for the rendering of lard!
Dunne immediately organized a packing company for
a quarter of a million dollars. He saw some of the
business men and unfurled the pennons of his dream.
The region was full of cattle and hogs. Why bring
meat products a thousand miles? Why not build up
a loeal industry and eat local meats at local prices?
The business men liked the idea. As Dunne did not
ask them directly to invest they had no cause for
disliking. Evidently the capital was to come from
somewhere else.
The widower heard of the project casually. No one
asked him to invest. He paid no attention. Perhaps
a brewery made into a packing house was not a bad
idea.
Dunne having got the elements of his game together224 Confessions of a Confidence Man
wrote North and urged the presence of Mrs. Penny,
a woman of considerable experience in business. Her
actual name is otherwise. In a week a lady from
the North engaged an expensive suite in the better
hotel of the town and established herself, opening a
liberal account with a local bank, joining a church
and maneuvering for social acceptance. The church
was, to be sure, that attended by the wealthy widower
and his son.
In three weeks Mrs. Penny had managed to meet
the intended dupe. She was very gracious, and very
good to look upon for that matter. It wasn’t the
man’s fault that he was past sixty and she under
thirty-five. Besides, it made no difference. He liked
the Widow Penny and thought he did not show it.
She reciprocated and seemed not to mind if he knew.
He invited her to dine and she accepted. A friend-
ship developed.
At about this time Mrs. Penny bought of Dunne a
block of stock in the new packing house. The deal
was consummated at Mrs. Penny’s bank and a check
for eight thousand dollars paid over there in the
presence of the cashier.
A few days later Mrs. Penny asked her new friend
if she might consult him in a matter of business. She
had bought stock in the new packing house and wished
he might investigate the proposition for her. If he
thought well of the enterprise she might invest still
more. In this way the elderly widower was brought
to an interest in Dunne’s affairs. He had retired from
actual business seven years before and now seldom
did anything beyond the lending of his capital. He
went at his new duty with a feeling of importance.225
Milking a Dry Brewery
He called on Dunne, who had opened an office, and
went into the packing proposition with great minute-
ness. Dunne was, to be sure, prepared for this. He
had made many and involved calculations, drawn
plans, computed the costs of plant remodeling, set
down local livestock costs in lengthy tabulation, fig-
ured the cost of labor, the overhead, the distribution
charges, and so on, ad nauseam. All these things he
had reduced finally to estimated selling prices of
various meats. His finals were very much lower than
the prices current. Ergo, his calculations argued that
much money was to be made in meat.
The widower desided after ten days of conferring
with Dunne that here was an able man with a sound
proposition. He said as much to Dunne and to Mrs.
Penny and felt he had discharged a duty nobly.
Dunne quite naturally pretended to assume that the
old gentleman was interested on his own account and
followed his investigations with a series of proposi-
tions, to all of which the capitalist listened politely
and invariably failed to respond.
He was not interested in the packing house, but he
was decidedly intrigued by the capable and attractive
widow. They grew constantly more intimate with
every week. Mrs. Penny met the son, an idle boy of
twenty-three, whom his father was genuinely anxious
to start in business. The widow stimulated a motherly
interest in the boy, who reciprocated with a much more
dangerous sentiment. Without going into needless
details, this clever woman shortly worked herself into
a position so close to the widower and his son that
she felt justified in making a suggestion. Why didn’t
the gentleman go into the new packing plant on a226 Confessions of a Confidence Man
fairly large scale, get control of the thing and grad-
ually establish his son in this industry? Here was
a future for the boy and a great chance at profit.
The capitalist considered the proposition with care.
He did not like speculations. He had never engaged
in them and this was certainly a purely speculative
affair. Most of all, he disliked linking his name with
a thing that might seem a gamble to many of his
conservative townsmen. All these things he guilelessly
confided to Mrs. Penny and she saw the pertinency
of his objections.
One evening when he and the pretty widow sat alone
after dinner she became especially confidential. Little
by little he had progressed to the stage of tacit wooing.
He did not realize it and the notion would have
frightened him. Nevertheless, there he was.
“Fred,” said the widow, “the more I think of it
the more I believe you ought to go into this thing for
your son’s sake.”
‘‘Somehow I don’t like it, Gladys,’’ said he. “I’ve
never been connected with anything of the sort; I
don’t know this man Dunne; I can’t tell what I may
be getting into.”
“I’ve thought of all that,” said she. “But there
are ways of managing it. In the first place your name
doesn’t have to appear. You can handle it all through
me. And as far as Dunne is concerned, I’ve a feeling
myself that we ought to be rid of him. From all the
signs I think that wTill not be hard to do. He isn’t
known here; he hasn’t had much luck with his promo-
tion. Someone is going to buy him out shortly at
a very low price and I think we ought to be the ones. ’ ’
‘ ‘ Someone would know of my connection, ’ ’ said her227
Milking a Dry Brewery
dupe. “A check through the bank would be enough
to let the cat out.”
“There need be no check, Fred,” said the woman,
patting the hand of her admirer.
“If I withdraw any large sum from the bank and
Dunne disappears a little later inferences will be
drawn. ’ ’
“There are other ways, Fred,” said she again.
“Supposing we try this: You undoubtedly have stocks
and bonds. You might turn enough of them over to
me to make any purchase agreed on. I could take
a loan on them here, putting them up as my own, or
I could hypothecate them in another 'tfity. The pur-
chased stock would be put into my name and I would
turn it over to you with a bill of sale and receipt,
which you need never show until you want to.”
The capitalist was persuaded and negotiations were
opened with Dunne. He set a high price on his stock
and was obdurate. A series of negotiations followed.
Finally by stages of raising bids from one side and
declining offers from the other a price of twenty-eight
thousand dollars was agreed upon for all the stock
and rights in Dunne’s hands. Mrs. Penny had accom-
plished this by the old and effective con trick of the
in-and-in.
“Dunne wants twenty-eight thousand dollars, and
I don’t think he’ll come any lower,” she told her
aged admirer one afternoon after he had come to
talk sentiment and she had patiently turned him off
onto business.
“I won’t risk that much,” said he.
“I don’t want you to, either, Fred,” she said,
ruffling his scant hair. “But I think it’s worth the228 Confessions of a Confidence Man *
money and I’m ready to back my judgment. I’ve
put eight thousand into the thing now and I ’ll put in
another ten thousand if you’ll put in eighteen thous-
and. In that way we will be risking equal amounts.
We will be equal partners in the thing and we’ll have
it to ourselves.”
The old gentleman had learned to respect the busi-
ness head of this woman. She was ready to put more
of her own money into this venture. She was asking
him to help her. She spoke of having the thing to
“ourselves.” She wanted to place “our boy.” He
leaped. He turned over twenty thousand dollars in
Liberty Bonds, which Mrs. Penny immediately put up
for a loan of eighteen thousand dollars. This was ten
thousand dollari of her own, which she had meantime
drafted from Boston, whence she was supposed to have
come, was turned over to Dunne, who signed, sealed
and delivered everything, entertained his successors
at an elaborate dinner and departed the town.
The widow’s attitude toward her admirer changed
immediately. Prom one of reserve and dignity she
let her pose descend to one of ardency and possession.
She was guilty of numerous indiscretions that might
have been put down to overaffection. She embarrassed
the very circumspect capitalist repeatedly. His neigh-
bors began to talk. Worse yet, Mrs. Penny had over-
reached herself in her investment. Her money was
tied up in the new enterprise and she had to resort
to her “dear Fred” for loans and advances. Finally
she visited him in the middle of the night at his home
and apparently she had been drinking. The old gen-
tleman was shocked and frightened. He was still
deliberating painfully when his young son came home229
Milking a Dry Brewery
with too much stimulant in cargo, confessing that he
had spent the afternoon with Mrs. Penny at her hotel
and that she had been very tender and motherly.
The widower saw serious compromise and possible
scandal leering at him. He speedily forced Mrs.
Penny to sell out her interest for what she had paid,
demanding also that she depart at once. She wept,
sobbed and reviled him. He had courted and won her.
He was inconstant. What had she done to him ? MTas
he chasing her out of town because she had shown him
an affection he had been careful to encourage?
Nevertheless, she sold and went. I doubt that the
aged widower ever fully understood what had been
done to him. He had been taken for thirty-six thous-
and dollars, which Dunne and the erstwhile Mrs.
Penny gleefully divided at Atlantic City. I don’t
suppose, either, that the town appreciates owing its
new packing house, into which the conservative in-
vestor had to put more than eighty thousand dollars,
to the machinations of a con pair.
Perhaps I have explained that an inheritance is a
thing of magical beauty to the con man. He enjoys
certain advantages over ordinary mortals in this con-
nection, for it does not greatly matter whether he or
another receives a legacy—always provided that the
heir is one capable of listening to reason. For men
and women of this accommodating bent of mind the
operator in nefandous subtleties is always alert. They
exercise a strange and deep fascination over him; they
allure him with golden Lorelei tresses; they tempt him
to their destruction.
Jacob Albert, of Noburg, is competent to testify in
this matter. A year ago he inherited more than a230 Confessions of a Confidence Man
hundred thousand dollars in the shape of farms and
farm mortgages from his father, who had been until
late in life engaged in agrarian pursuits. Hearing of
the good fortune of young Albert, who had spurned
the farm and engaged in the drug business in Noburg,
George Faweet, a persuasive fellow who is known to
the police by another name, hurried West, resolved to
help the young man through the inevitable troubles
which follow in the wake of inheritance.
Alas, the altruistic Faweet was too late! Albert had
already come into possession of his fortune, and his
father’s old lawyer, who realized that there was no
specially high voltage in the machine under the heir’s
hat, had converted everything save the family home
into Liberty Bonds.
Nearly two years earlier Faweet had been through
a Western zinc-mining district, where he had learned
something about the mining and preparation of this
valuable metal. He had discovered that there were
several mines in this and neighboring districts which
stood abandoned for reasons not apparent to the lay-
man. Ore was plentiful and of high zinc content, but
there were present so many refractory ores that the
process of preparing the mined material for smelting
proved too difficult, involved and costly. With an eye
to future frauds, Faweet bought such a mine. It had
been worked not once but several times. The claim
was a large one, ore was abundant and often ran
thirty-five dollars of zinc to the ton, a very high
figure. Machinery abandoned after the several at-
tempts to operate the mine stood about everywhere,
growing in rust and desolation. Rain and seepage
had partly filled the old shaft with water. This latterMilking a Dry Brewery	231
gave Fawcet some concern at the time, but it proved
his salvation in the end.
From the first moment of his acquaintance "with
Albert the -consiprator had passed himself off as a
mining man. As acquaintance grew he permitted
himself little boasts.
He showed checks which had come through the
mails; he spent money freely. He smiled indulgently
at the thought of Albert’s small interest from his
bonds.
“Bonds,” said he, “are fine for widows and
orphans. A man with brains wants a better run for
his money.”
It was perhaps not unnatural for Albert to agree
with him. An income of five thousand dollars a year
is small enough, everyone knows, and exasperatingly
small to a young man with rather loose ideas who con-
siders himself a wealthy heir. It was not difficult to
persuade him to an interest in zinc. And Fawcet con-
fided to his friend the story of his mine.
Here was a claim, he said, that had been abandoned
years before, because subterranean streams had been
struck. Periodic attempts to drain off the water had
all resulted in failure, but a few months before Faw-
cet, who was a mining engineer, had made soundings
in the mine and discovered that there was a second
level of streams deep below those which had put the
mine out of business. Such an idea had never occurred
to the other men who had owned the mine. Fawcet
had discovered the thing by means of deduction. He
saw mines operating all about him whose shafts ran
much deeper than his. These mines had little or no
trouble with water. It had suddenly occurred to him232 Confessions of a Confidence Man
that the normal drainage of the district lay along a
deeper stratum. He had bought an option, made
investigations, and lo, the thing was as he had sup-
posed! He was now about to drain the mine. His
fortune was made.
Albert’s eyes glowed with pleasure and high hope.
Was this lucky Fawcet going to let him in on this
great opportunity? Fawcet, who hardly understood
the verdancy of his victim, played the game cautiously
and waited for a right moment to spring his proposi-
tion, with the result that he gave the poor young man
needless pangs and nights awake. Finally he came to
the point and Albert almost choked on the bait.
By the end of that week, in the late part of last
spring, Albert had hired a temporary manager for his
drug store and hurried West with Fawcet. He was
left in St. Louis, while Fawcet went on to the mine
alone, giving some plausible explanation. The schemer
was met at his destination by a confederate whom he
had summoned from Denver by wire. The very first
act of the conspirators was to draw up and antedate
a bill of sale for the mine, whose ownership Fawcet
transferred to his confederate. This instrument was
recorded. At the same time an antedated option was
drawn in such a fashion that it had only a few days
to run. The option was, to be sure, given by the con-
federate, whom I shall call Walker, to Fawcet. This
done, Walker retired to a near-by town and waited.
The following day Albert arrived on the scene.
Fawcet met him and cautioned him immediately to
use discretion. The option on the mine had not long
to run, and Walker, who owned the mine, was sus-
picious that Fawcet had made some sort of valuable
Milking a Dry Brewery 233
discovery. He was rich, influential and unprincipled.
If Albert made the mistake of inquiring about indis-
criminately Walker would certainly smell a rat and
place obstacles in the way of investigations. The drug-
gist said he was no fool.
A visit was paid to the mine, where everything was
as Fawcet had represented it. The shaft was almost
full of water. More than that, some rusty pumps lay
about, reminders—Fawcet said—of old failures to cope
with the flow.
“Now,” said Fawcet as he led his victim back to
town, “everything depends on one thing. I’m certain
that a boring to the lower -water level will send all
this wetness running off in an hour or two, but there’s
nothing like being dead certain. We must make that
boring, but we must make it so that Walker doesn’t
get wise. If he does he ’ll find some way to stop us and
we’ll either have to let the option lapse or buy a pig
in a poke. I don’t want to risk my money and I don’t
want you to risk yours. We must be dead sure there
will be no more water trouble.”
The next day Fawcet was mysteriously busy—get-
ting ready to have the boring made secretly, he*said.
Late in the afternoon he took his dupe to the mine
with an expert he had hired. This individual gave an
estimate of the number of tons of ore likely to be
found in the claim and the probable zinc values per
ton. All this he did quite honestly, and his figures
showed that the claim was, in fact, one of the richest
in the immediate district. He had not been hired to
give an opinion on the matter of refractory ores, and
kept his own counsel. Albert was not quite green
enough to accept the uncorroborated word of the ex-234 Confessions of a Confidence Man
pert, and Fawcet referred him to any local authority
of his own choosing. He selected a man, whom he was
himself to pay. He and Fawcet went to see this
individual and Fawcet—again urging the need of
caution—asked the man an agreed question, as fol-
lows:
“If a way could be discovered to handle the ore in
the Walker mine, what in your opinion would the
property be worth ? ’ ’
The mining man smiled an incredulous smile.
“Well, a lot of people have tried that and failed,”
said he. “I don’t believe there is any way of solving
the problem, but----”
Fawcet trembled for a moment. Was the man going
to gabble and ruin the deal?
‘ ‘ But if anybody can find a way that claim is worth
millions. ’ ’
Fawcet dragged the excited druggist out into the
street and away, leaving the mining expert to wonder
at the strangeness of some human beings.
In the dead of that night Albert, Fawcet, a drill
foreman and five workmen slunk out of town, drove
rapidly into the mining field, drew up at the abandoned
shaft and went to work. A little before dawn the
boring had been made. The workmen loaded their
apparatus back into their car and drove off. While
daylight crept over the place, revealing the twisted
and shrunken arms of the old machinery like specters
of all the dead failures of the past, Fawcet and Albert
sat in the lee of the shaft house and watched the water
go down foot by foot; watched it and grew jubilant—
each in his own fashion.
“My boy,” said Fawcet, offering his dupe aMilking a Dry Brewery 235
drink from a flask, “we’re potential millionnaires this
minute. ’ ’
They went back to town and Faweet telegraphed
for Walker. He arrived late in the afternoon. Albert
was introduced and found the mine owner cold, hard
and forbidding.
An engagement was made for ten o’clock the next
morning and Albert went back to his hotel with
Faweet.
The common weakness of the man who doesn’t know
and who feels his ignorance overcame Albert in the
last night. Perhaps it is only a survival of primitive
animal terror at the unknown. He sat on the edge
of his bed taking off his shoes and said to Faweet, who
was smoking at the window: “I’m not sure yet,
Faweet.”
“Not sure!”
“No. All I know about this is what you’ve told
me. And two months ago I didn’t know you. I
think I’d like to do a little more investigating before
I go into this.”
“Suits me,” said Faweet. “Only you know the
option expires at midnight to-morrow.”
“Can’t we get Walker to renew it for a few
days?”
“You might ask him. If he isn’t wise he’ll renew
it and be glad to sell to us at any time and any price.
If he knows what we know to-night, or even suspects
it, he won’t take a million dollars for a one-day
renewal. ’ ’
Albert slept ill, took three bracers before breakfast,
felt unsteady and went off to see Walker.
“Go alone and see what you can do,” Faweet ad-236 Confessions of a Confidence Man
vised him. “I know he won’t renew for me. He
thinks I know too much.”
The doubtful youth found the forbidding "Walker,
was taken up to the supposed magnate’s room and
began lamely to ask for a renewal.
“What!” Walker interrupted him brusquely with
a loud laugh. “Kenew your option? Listen, my
young friend! Do you think you can sneak out in
the middle of the night and drain my mine without
my knowing it?”
Albert stared at him, baffled and confounded.
“I wouldn’t sell you an extra hour’s option for all
the cash in the banks here,” said Walker fiercely. “I
wish I had the old one back.”
He showed the stunned Albert the door without
further words and the bewildered druggist half stag-
gered back to Fawcet.
“He’s wise,” said Albert, dropping into a chair
in the hotel lobby. “The game’s up.”
“You mean he knows?”
“He found out about last night.”
Fawcet, turning pale, got up and walked nervously
up and down the tiles. He bought a cigar at the
counter, lighted it, considered, walked some more and
stood before Albert with a wide grin on his face.
“Well, he found out just too late, didn’t he?” said
Fawcet. “We’ve got till mid-night to pay up—and
our money’s here.”
Albert sprang up like a man suddenly contacted
with a battery.
1 ‘ Lord, I forgot that! ” he cried.
Fawcet led him to the bank on a run. Each man
withdrew twenty-five thousand dollars, which had beenMillring a Dry Brewery 237
placed there previously on Faweet’s advice and for
just such an emergency. In two hours the deal had
been made. Walker had the money and was off for
the East. Fawcet and Albert owned the mine. And
so far as Fawcet knows or cares, the credulous drug-
gist owns it all to-day.CHAPTER XVI.
THE DISCRETIONARY SWINDLE.
OU who have followed my confidential adven-
tures to this place will recall that there are
three charms by which the human oblation is
befuddled to the altar—the resources of the earth in
mines, wells, lands and quarries, the resources of the
brain in inventions and the resources of Wall Street
in speculations.
It was as a speculative operator that I began my
flagrancies and as a person of this stripe that I came
to grief. Twenty-five years and more intervened be-
tween these stages of my journey. I shall not try to
tell you the story of the trip. Instead I intend to
review comprehensively the various Wall Street games,
frauds and swindles I have perpetrated and seen per-
petrated. I shall indulge in no generalities.
Those who have read my story will already be clear
on the subject of stock washing, the commonest, broad-
est and costliest form of fraud practiced to-day on
bourses and exchanges. This is the system of making
pretended sales and purchases of stocks among a se-
lected clique of brokers, no actual shares being trans-
ferred. The purpose of the operation is to raise shares
in given companies to wholly fictitious values in order
that actual trading and purchases by the public may
result. The public, to be sure, invariably holds the
239240 Confessions of a Confidence Man
bag. The instances of the employment of this fraud
could tie multiplied to the end of the chapter. What
use? It is enough to repeat that this practice is re-
sorted to in connection with a large number of the
highly speculative oil, mining, inventions and general
promotions stocks which come upon the market—and
especially the curb market. This fact alone should be
enough to keep the unsophisticated public away from
all venturesome stock games.
Neither need I devote any extended attention to
false tipping, rumor starting, midguided pyramiding,
dumping and all the other common practices used to
strip the foolhardy. These things are too familiar to
everyone.
One obvious thing is worth emphasizing again—the
importance of personality. The broker you deal with,
his standing, his past record or that of his house, is
generally more vital than all the fiduciary information
you can cram into your head. Investigate the man and
his reputation. The right man betokens the right
investment or speculation. The finest security in the
world is no eventual protection against the wrong man
or house. There are countless swindlers dealing in or
through government bonds, as I explained in earlier
chapters. On the other hand, not a single really
reputable broker would see a client lose money through
the worst stock if he could help it.
Investigate carefully the name and record of your
house. Only a few years ago it was the fashion to
start wildcat concerns trading on great names. Trades-
men having them were hired and used as cloaks for
questionable dealing. Do not be tricked by similarity
in names.The Discretionary Swindle 241
It is often a little hard to understand why many
men who operate the most flagrant swindles are not
in prison. When all is said and done, there are two
reasons for the escape of the supermen of con; and
these two really resolve themselves into the same thing.
In the first place these financial swindles are planned
and executed so cleverly that conviction of crime is
most difficult. Again, the laws now on the statute
books are insufficient—which only means that the
criminals have found ways of circumventing them.
A new crop of statutes must be written into the
corpus and both the Congress and the legislatures of
several states are now at work on this problem.
Though the payment of protection money is by no
means unknown, it can generally be assumed that the
authorities are honest and active. The Federal law
against the use of the mails to defraud is specially
rigidly enforced. In one recent instance a bunko man
talked his victim into parting with some money. He
could not get the cash out of his dupe and eventually
took a check on an Arkansas bank. This had naturally
to pass through the mails for collection. On this fact
alone the swindler was convicted and sentenced to
serve two years.
A similar case concerning Harry Homer, who served
a sentence in Atlanta, has a touch of genuine romance
about it. Homer and a confederate were formerly
card men and they were aboard the Titanic on her
fateful maiden voyage operating a card racket. They
were shaken out of their chairs when the great ship
hit the iceberg and rushed for the decks like others.
They heard the cry “Women first!” and acted with
the swift resourcefulness of their kind. In the con-242 Confessions of a Confidence Man
fusion they got into cabins deserted by their women
occupants, quickly slipped on women’s clothes and
were put over the side into a boat, whence they were
rescued—but only to go to jail.
Homer and several others were out in Toledo a few
years later and managed to steer a victim against the
ancient wire-tapping racket. The dupe hadn’t enough
money with him and wrote his brother for a remit-
tance. The swindlers did not write the letter, but it
was held that their machinations caused it to be writ-
ten, and the court sent all the implicated rascals to
Atlanta for six sedentary years.
Nevertheless, many swindles succeed and many swin-
dlers never see the insides of jails. My own case is
illuminating. I got away with it for twenty-five years
previous to my trip to Atlanta. Modesty compels me
to admit that others have done much better.
Here is an example of jail evasion by a very simple
subtlety: Formerly every one who dealt in stocks and
securities was a broker. To-day there are many
dealers. The crooks among these men made the change
for just one reason.
If a broker misuses money he has received from a
client for a specified purpose it is a clear ease of fraud
and conversion, for the client is a principal and the
broker only his agent or trustee. Where such fraud
can be shown jail ensues like a Q. E. D.
But if a stock man is a dealer and charges no com-
mission he immediately becomes a principal and the
transaction assumes another aspect. For instance, in
the sale of stocks on the installment plan if the dealer
eventually fails to deliver the stock there is probably
ground for civil action only. He commits a breach ofThe Discretionary Swindle 243
contract and can be sued. If he were acting as a
broker and did the same thing he would be subject
to immediate arrest. In other words, dealing is much
less risky than brokerage. I advise you to remember
this point.
Perhaps the oldest form of market swindle is the
so-called discretionary game. This may be played
with bonds, stocks, grain or blue sky. It consists of
intrusting your money to an agent to be employed
at his discretion, the only limitation being that he
promises you a large profit. The notorious Five-hun-
dred-and-twenty-per-cent Miller, who promised profits
of ten per cent a week, was a discretionary operator.
Some men will tell you that discretionary games
are no longer used and that this form of swindle has
been driven out of existence. Most premature, I as-
sure you.
A good many years ago Mr. Will Crosby, under
colors not his own, opened a discretionary wheat busi-
ness in Philadelphia. I forget at the moment just
what my name was at that time. It does not matter.
As soon as my office was fitted up I put the following
advertisement in the newspapers:
I TRADE IN
WHEAT FUTURES EXCLUSIVELY
Why jeopardize your speculative account in hap-
hazard trading when you can have someone handle
your account who understands and can direct specu-
lation successfully? Write me to-day.
The good people of all the surrounding country
wrote me as I commanded asking for information,244 Confessions of a Confidence Man
which I was most accommodatingly anxious to give.
I sent them form letters and reports showing how
much money I had made for others, letters on the
wheat market that would convince the most doubting
of all Thomases. I demonstrated, or seemed to demon-
strate, my powers. It was simple enough to do. In
those days the wheat market had a habit of reacting.
If it fell heavily to-day it was almost certain to jump
up at the opening to-morrow. And if there was a
boom on to-day, to-morrow’s opening was likely to be
lower. A keen man watching carefully and couching
his predictions in sufficiently general terms could
readily make himself out a prophet.
I spent a thousand dollars a week in advertising and
soon had above five thousand correspondents on my
list. I took accounts as small as two hundred dollars
and pretended to trade in wheat futures. What I
really did was to put the money into the bank. At
the end of the first month I generally sent each two-
hundred-dollar client a check for about twenty dollars.
I saw to it that he seemed to make nearly ten per
cent the first month. If this encouraged him to send
in more money and enlarge his account he received
twelve or fifteen per cent the second month, and so on
as long as he kept enlarging the ante. But woe unto
the fellow who sat tight and would send no more.
The second month his profits were cut in two and
the third month he was wiped out and received an
apologetic letter.
This game’s heart lay in an elaborate card-index
system, where every man was tabulated and rated. All
letters sent him and all received were recorded, and
the customer was watched carefully and rerated fromThe Discretionary Swindle	245
time to time. The three main ratings were prospect,
good prospect and very good prospect. There was also
the rating, dead one. Anyone so listed was doomed
to be cleaned in the current month.
Strangely enough in this out-and-out swindle some
few customers strung along and held out hopes of
future large accounts in so rosy a way that I was
myself duped and actually paid them real profits.
They made money out of me—if you will believe it.
But the ninety and nine paid m£ handsomely. This
discretionary wheat business paid me a quarter of a
million dollars while I was at it. I made the mistake
of branching out into too many directions at once. In
the midst of my wheat discretions I opened a bucket
shop. I got caught in a bull market and was sent into
bankruptcy. With me went my wheat game and the
quarter million.
Some years later I revived this game in a slightly
altered form, known as the professional-trader game.
For the purposes of this fraud I enlisted the aid of a
saloonkeeper out of a saloon. He was dressed up,
given a high-sounding name and put into offices.
Meanwhile I had a brokerage firm of my own and I
joined another brokerage house in the game.
My ex-dealer in fluids, whom I shall call Jones,
now began to advertise himself as a professional trader
in stocks, setting up the claim that he had studied the
market for many years and was able to tell where
money was to be made. Money intrusted to him would
earn large and quick profits. The people wrote for
information and he sent them a statement showing
the money he had won in the last month. This state-
ment had been made up by me after the fact and was246 Confessions of a Confidence Man
based on the market records. Jones added one touch
of novelty at my suggestion. He did not want to
handle the money. No indeed! You were to take
your account to your own broker—anyone you liked.
But you. were to instruct your agent to take orders
from Jones.
The dupes wrote in and wished to open small
accounts, usually not larger than five hundred dollars.
If a man said he wished to have Mr. Jones handle his
business through an honest broker, Jones wrote back
a letter saying that he was sorry, but he had no ac-
counts with this broker and" could not afford to handle
one little five-hundred-dollar account separately. If
the customer wished to make the account as large as
five thousand Mr. Jones would be happy to handle it.
Or come to think of it, the client might be satisfied
with some other broker. Jones was handling numerous
small accounts through my brokerage house and
through the other conspirator’s firm. Both these
houses were of good repute, wrote the infatuated
Jones. The client might investigate these two houses
and if he cared to use them Jones would be glad to
accommodate his small account.
The psychological effect of such a letter needs to be
noted. Its tone is mild but contemptuous. Jones is
not in the least anxious to be bothered with the poor
little client. And the client instantly believes that
Jones must be both honest and a big busy man.
Thousands of people sent their money to our broker-
age houses.
As soon as this was done Jones wrote to each client
and asked him to come in. The victim appeared and
was made to sign a contract with Jones empoweringThe Discretionary Swindle 247
him to handle the money. The sucker was then led to
my office or that of the other broker and there made
to write an order instructing us to accept the com-
mands of Jones. He thus signed away all chance of
legal redress and put us into the clear.
We now washed trades on the curb market to cover
what deals we wished to represent as having been
made. As in my discretionary wheat game, each
speculator was sent a profit of eight or ten per cent
for the first month. If he responded by enlarging his
account he received a fatter slice the next month. If
he stood pat he was shortly wiped out amid the
laments and apologies of Jones, who wrote that no
man was infallible. I suppose it is supererogatory to
say that we dealt in no stocks, but put the money
into our capacious and hungry pockets—one-half into
mine, one-fourth into those of the other broker and
one-fourth into the jeans of the debonair Jones.
The newspapers finally exposed us and we had to
decamp with only two hundred and twenty thousand
in takings among us.
Here you have the discretionary game in its simple
and its complicated forms. To-day it probably is not
played by either method, at least not in the East.
But it has been succeeded by the tipster game, as
follows:
A tipster goes to a broker of none too good repute
and makes an arrangement whereby he is to guide his
dupes to this broker in return for twenty-five per cent
of the money made out of the account. This arrange-
ment signed and sealed, the tipster begins to advertise
himself as a professional trader. No pay is asked be-
yond ten per cent of the winnings.248 Confessions of a Confidence Man
The dupe reads this advertisement and says to
his alleged intelligence: “This sounds good. This
man can’t make anything unless I win. He must
know what he’s doing. Let us be up and specu-
lating.”
Whereupon the dupe goes to the tipster in person
or by mail. The tipster directs the dupe to the broker,
who takes the money. If the dupe is really verdant
he intrusts the account to the tipster and it becomes
again a straight discretionary racket. If the dupe is
somewhat wise to the ways of the market he is let
handle his own account, but the tipster directs his
trades. In either case the dupe loses, take my word
for that. He loses so inevitably that the broker does
not wait developments before paying over the fourth
part to the tipster. He pays it as soon as the account
is opened. This form of the discretionary game is
being played every day on every market in this fat
and fatuous land.
A somewhat rarer and pleasanter form of the good
old racket was played by yours confidentially and
Freddy Capes some few years back. We called it
the double deal. Capes opened an office on lower
Broadway, New York, and I simultaneously opened
mine across the street, or nearly so. We got hold
of a list of active speculators in stocks, the list being
procured in one of the methods I have already ex-
plained. Capes wrote every man on the list a bull
letter and I simultaneously wrote, each one a bear
letter. One of us was bound to be right and it mattered
not which. We kept at our game consistently. I was
always doleful and sure the market would fall. Capes
was an insurable optimist. He knew prices were goingThe Discretionary Swindle 249
up. If prices went up Capes immediately wrote to
all his correspondents, crowing with lusty lungs.
‘ 11 told you so! ” he shouted from the mimeographed
page. “See what you would have made had you
followed my advice!”
If the market went down it was I who wrote the
I-told-you-so letters. In this way we soon established
relationship with large numbers of persons, some hav-
ing been made to have confidence in me and some in
Capes. They began by writing us for information
and ended by seeking our advice and guidance. We
steered them to brokers with whom we had a pre-
arrangement, which provided that we were to have
twenty-five per cent of the account the moment it was
opened and half when it was finally closed. Here
again we either had actual charge of the accounts and
were thus able to blow them up when it suited us, or
we directed or misdirected the speculator. In the end
the result was the same. In those days I went to work
in a limousine.
At this moment a further refinement of the game is
in common use. In the refining process some of the
dishonesty has been eliminated. Two tipsters open
separate offices and proceed exactly as .Capes and I
did. In fact, the fellows who are operating to-day
learned this little trick from us. A business man out
in Indiana writes in and wants to operate through one
or the other of these tipping gentlemen. He is told
that he must handle his own account through his own
local broker. The tips are wired him daily in come
so that his townspeople may not discover that he is
playing the market. If the tips are wrong and he
loses no one suffers but the speculator. If he wins he250 Confessions of a Confidence Man
must pay from ten to twenty per cent to the tipster.
Nothing criminal here, I suppose, but just a nice
sure-thing game with the other fellow’s money.
When, half a generation ago, the bucket shops were
slowly and finally put under the ban the hundreds of
men who had been operating these places looked about
for other ways of handling narrow-margin specula-
tions. Various expedients were resorted to, but in
the end everything simmered down to the installment-
stock business. To-day all the prominent bucketeers
of other years are in this game. Some of the houses
are decidedly prominent and they do a tremendous
volume of business.
The theory of the installment-stock game is simple
enough. If you wish to buy a share of stock you may
acquire it my paying an initial installment of ten per
cent based on its current value. The usual arrange-
ment is that five per cent a month must then be paid,
so that the stock is acquired outright in eighteen
months. If the stock goes higher in the eighteen-
month interim the investor is naturally the gainer.
Otherwise he loses, for he must pay out at the value of
the stock when originally bought. He is privileged to
sell his share at profit or loss any time in the course
of the eighteen months.
Undoubtedly some stock is bought, paid up and
finally acquired by this system. But in my judgment
a good many installment-stock transactions represent
mere margining. The same old crowd that used to
play the bucket shops now hangs its wraps before the
blackboard in some of the installment-stock houses and
bets furiously. The house, unless it is really on the
level, does not actually buy or sell the traded shares.The Discretionary Swindle 251
Why should it ? Shares are not deliverable under the
contract for eighteen months and much may happen
in that time. Here we have the good old bucket shop
under another name with the margins a bit bigger—
nothing more. The buyer simply bets that his stock
will rise and the dealer lays him it will decline. Nine
out of every ten trades find the speculator on the
bull side.
Frankly I cannot see why this method should be
objectionable if the house is honest and discharges all
obligations. There is always, to be sure, the danger
of an adverse market and a bankruptcy, but this dan-
ger is not absent from other forms of stock brokerage.
The fly in the amber here is really an adventitious
institution called the switch. A yarn to explain it:
Some years ago—ten to be exact—I decided to have
a fling at the installment-stock business and I immedi-
ately opened offices in Broad Street, New York, those
very offices I spoke of in the beginning of my articles.
I had been out of the Street for some time following
paths afar and amiss. Naturally I must have clients.
Simple enough by way of the sucker list. But I had
suffered some experiences with these fool rosters. I
knew—as all brokers do—that ten letters are written
to one that is read. A sheer and painful waste of
postage. How then manage the thing more economi-
cally?
I bought, from a regular Wall Street dealer in
stockholders’ lists, the names and addresses of holders
of shares in half a dozen standard companies such as
United States Steel, Standard Oil, American Can,
Anaconda, and so on. To each of these stockholders
I now wrote an original letter, which began by extoll-252 Confessions of a Confidence Man
ing the virtues of the particular stock held by the
addressee and wound up by announcing my entrance
into the financial field and my willingness to serve.
Soon a second letter reached each stockholder. This
again called attention to the many virtues of the stock
in question, predicted future increase in value, spoke
of possible stock dividends and generally dosed the
security with copious flatteries. I wound up this letter
by saying that I dealt in this stock, was a specialist
in it and sold it outright or on the installment plan.
The calculated effects were felt in two directions.
My addressees took unto themselves my flattering esti-
mates of their investments. To compliment a man
on his possessions, whether these be his wife, his
children, his art objects or his securities, is to compli-
ment the man—and is much mere effective, being indi-
rect. My prospects felt I must be a man of good
judgment. Did I not agree with them? And again,
most of the letters I sent out were read, for they dealt
with a matter in which the addressees had already an
interest. I was shortly in correspondence with hun-
dreds and later with thousands of shareholders.
At my suggestion they bought further blocks of
their own favorite stocks on the installment plan.
Some even put up the shares they already held to
cover the initial payments on larger blocks and I was
soon doing a thriving business. I must explain that
I acted in this matter as a dealer and charged no
commission save that paid to brokers for buying the
shares. How was I going to make money without
committing larceny? you wonder. To be truthful,
money could have been made and is made honestly
in such establishments. In the first place the dealerThe Discretionary Swindle 253
has the use of the buyer’s money for nearly eighteen
months, beginning with a small part and ending with
almost the total amount involved. In the second place
the dealer has the advantage of being able to buy the
requisite stocks at any time in the course of a year
and a half and he naturally acquires them when the
market is lowest. He is dealing in only half a dozen
or a dozen standard stocks and it takes no great
astuteness to watch the market on such a list with
care and practical intelligence. It is therefore possible
to conduct an installment-stock business dealing in
first-class securities bought for investment without any
fraud or trickery. I regret to say it is too seldom done.
As soon as I was well launched in my Board Street
business I looked about for an undeveloped mining
venture and bought up such an affair for a song. I
prepared elaborate literature on this proposition, listed
the stock on the curb and slowly washed it up to a
respectable price. All this was done quietly with
small transactions, without bluster or advertising. But
once I had my fraudulent stock at three or four dollars
a share I began the preconceived attack on my stock-
holders,
The thing was begun slowly and cautiously. I
merely called their attention to my mining stock with-
out asking them to buy. When I wrote them about
their standard stocks or sent receipts for money re-
ceived I slipped insinuating circulars into the enve-
lopes. I showed my investors ever-higher markets for
the mining stock. Over a period of a whole year I
prepared them. Then as their installments on the
standard stocks began to approach maturity I launched
into each customer with fervid advisings.254 Confessions of a Confidence Man
I had been sending my customer the literature on
this mining stock for nearly a year merely to call his
attention to it. I had never advised him to buy, for
he was a conservative man, and I made no practice of
suggesting speculative ventures. However, the mine
was now in such a state that I felt I would be remiss
in my duty if I did not call the customer’s attention to
the tremendous possibilities and advise him to get in
on the ground floor. Perhaps if he was short of other
capital he would like to convert his standard stocks
into these shares. I was convinced such a change would
pay surprisingly.
I need not go into the full details of the campaign.
By repeated urgings and advisings more than eighty
per cent of my customers were persuaded to sur-
render their good stocks for bad and they naturally
came utterly to grief. Those who refused to exchange
received their securities in due time and continued as
my customers. They bought further stocks and I tried
to persuade them into a substitute swindle. This is
the switch. If some customers are immune it is be-
cause they have demonstrated their good sense. Others
are not in this happy family.
The eminent Dr. John Grant Lyman, of whom
previous mention, rung a desperate change on this
game. He advertised as an installment dealer, got
many buyers of good stocks interested, received heavy
remittances through the mails and then simply de-
camped. They caught him on the Florida coast,
whence he was about to put out for Honduras in a
small ship.Uf
CHAPTER XVII.
THE GAME OF GAMES.
iT is generally safe to assume that bonds are safer
instruments than stocks, but not always. A year
or two after I opened my installment-stock busi-
ness I was approached in New York by a pair of con-
spirators who bad a supply of police-graft money on
hand and wanted to go into the bond business on the
installment plan. I entered this venture, which we
launched on a small scale with less than thirty thous-
and dollars capital.
"We watched the advertisements for small municipal-
bond issues and underwrote them. Our first buy was
a one-hundred-thousand-dollar block of sewer bonds
in a small town. We paid just under par for them,
put up the required deposit of nearly twenty thousand
dollars, took the bonds to New York and immediately
hypothecated them in our bank at better than eighty-
five. With this money we paid the city, having a
little cash to spare.
We now went to this little city and advertised the
bonds for sale locally on the installment plan, ten per
cent down and five per cent a month. It was no
trouble at all to sell them on these terms, so we
almost immediately had ten thousand dollars of our
investment back. At the end of the first month we
had fifteen per cent in hand and our original thirty
thousand dollars was practically intact.
255
256 Confessions of a Confidence Man
Without delay we bought up another block of mu-
nicipals in a similar amount and went through the
same operation. In thirty days our capital was again
intact and we ventured in a third issue. Thus at the
end of a year we were spread out over a dozen issues,
with nearly a million and a half of bonds in hand and
only thirty thousand dollars involved on our side.
We were simply using the money of our bond buyers
as it came in to us. As soon as the first set of pay-
ments matured—eighteen months after our first ven-
ture—we would naturally have to take up the loan
at the bank and deliver the bonds, but this occasioned
no worry. We would have the installments from
eighteen issues coming in by that time and would be
abundantly able to handle the situation. Meantime
we were making a little money, for we sold the bonds
at a reasonable advance over our purchase price and
we collected the difference between call-money interest
and that borne by the bonds, often as great as three
per cent. On two millions in bonds this difference in
income would amount to sixty thousand dollars a
year,," Plainly as long as call money remained cheap
we were making profits. This was, I regret to say,
not our plan.
The fraud was to be applied at the right moment.
By investing and reinvesting on the lines already ex-
plained and by returning all profits to the business
we expected to enlarge our operations till they covered
a matter of fifty or a hundred millions in bonds. This
accomplished we planned to sell out the business, or
appear to sell it out, and leave the country with the
profits of a last huge deal. Our successors, who
would have been hardy characters hired for the job,257
The Game of Games
would have held on for a time and then transferred
the business to still another set of yet hardier breed,
secretly paid to take a chance on going to prison.
Under this third management and far enough removed
from ourselves, we believed, the crash was to come.
Fortunately for the public the murder of Herman
Rosenthal and the Becker scandal and trial super-
vened. The Becker case chased our backers to cover.
They demanded their money and we had to close up
shop before we were well started. The bonds were
all in the banks and the public lost little if anything.
But what a crash there would have been had we been
able to continue for, say, two years. Here is the
only failure of my life that I have belated reasons to
be happy about.
And now, my friends and foes, all you who have
been amused or enlightened or horrified at my confes-
sions, I ask your patience for just one tale more. I
think it the completest adventure of all my flagrant
days and ways, the most involved and romantic of all
my gaming.
Not so perfect a piece of technic perhaps as my
game of the banker and the talking typewriter, which
I recounted in an earlier chapter, but after all a
conception of a larger stamp. Perhaps I am wrong.
You must judge.
In the old days half a dozen years ago there stood
a saloon at the corner of Broad and Beaver Streets,
New York, remarkable for nothing save one of its
familiars. He was a man of forty or worse, a tall,
gaunt, skin-and-bones fellow, with streaked light hair
and a vasty blond mustache. He was a bit stooped
and just a shade careless as to dress. Whether he had258 Confessions of a Confidence Man
an office other than this barroom I don’t know. If
he had I never heard of it and feel certain he was
never there unless he had a double. Day in and out
he was at this bar chinning with the bartenders and
waiters, exchanging gossip with the proprietor and
holding endless confabulations over the tops of the
wooden tables warped into the corners of the saloon.
His business was a peculiiar one and obscure. He
dealt in worthless assets as the bases for fraudulent
companies. His goods were in the shape of claims
and organizations to be used for flagitious stock flota-
tions. He was never without a fine assortment. Did
you need an oil property with the company already
organized and incorporated in legal form ? The gaunt
blond in the Broad and Beaver Street saloon was your
medicine. Or was it a gold mine you required, a nice
new mine with never a spade wound in its virgin
heart? The meager blond had it all beautifully in-
corporated under the laws of the sovereign state of
Arizona. But mayhap you required a wonderful in-
vention with its corporate being already extant? No
difference; the pallid one had it ready prepared. The
price was generally twenty-five hundred dollars cash
down and no deferments of any sort. Specially fine
bases for fraud brought five thousand dollars and the
very purest gems as high as ten thousand dollars.
Just where this gentleman picked up all these prop-
erties and ideas I know not. Neither do I want to
find out now. I suspect, however, that some of these
dubious values passed through his hands more than
once. I remember, for instance, a mining claim in
Idaho which glowed under my eyes four times in the
course of a dozen years, each time under a new name259
The Game of Games
and as nucleus for a new stock jobbery. No matter.
About six years ago a most brilliant scheme went
swarming through my brain. I worked it out in detail
in the course of a few lonely evenings and discovered
that I needed a nice unbroken mine far off in some
happy valley, untenanted by mendacious men. I went
to my elongated blond, bought him a drink, mused
with him over a table for the patient hours of a
summer afternoon and relieved him of a jolly little
silver mine down in the lair of Senor Don Pancho
Villa. Somewhere beyond Guadalajara it was. You
mustn’t expect me to remember inessential details at
this late date. I never saw the mine and, as in the
case of the purple cow, I never hope to see it.
Having possessed me of this pearl among mining
properties I went to work. First of all a partner and
next a dupe. Old Doc Leroy was about in those days—
a venerable, sanctimonious, gabby old fellow to the eye
and ear, but at heart one of the most engaging scala-
wags of the times. He’s dead now, I believe, and it
doesn’t matter. Leroy was never his real name any-
how. I found the old Doc in his usual haunts in the
roaring Forties and bade him stick round and be on
hand. Times were lean with him and he all but wept
into his beer.
I now simultaneously opened two accounts with
large reputable stock-exchange houses of the highest
integrity. I took good care to see that each of these
houses stood at the very top. To do business with
such concerns required about five thousand dollars
each, which I cheerfully deposited. I now began
operations, buying small lots of standard stocks
through one house and selling them through the other.260 Confessions of a Confidence Man
By watching carefully and playing shrewdly any
sensible man ought to be able to make his commis-
sions in this sort of game, and I did. My purpose
wras not to make money, but merely to establish my-
self with these houses, to build up their confidence in
me and to assume a respectable conservative veneer in
their view.
This took six or eight months naturally. I had a
business going in New York and did not grudge the
time. When I finally felt that I was an established
customer I went to my stock-exchange men and asked
whether they could buy me any Arroyo Silver stock.
“Arroyo Silver?” said the broker in surprise.
“Never heard of it.”
“It’s a little company down in Mexico,!’ said I “I
have a little information and want to pick up some
of the stock.”
“Now, Mr. Brown,” said the broker indulgently,
“you’re too intelligent and conservative a man to be
bothering with mining stocks.”
“Maybe I am,” said I, “but I know what I’m doing
here. I expect to make a lot of money out of the
Arroyo mine. See if you can pick up some stock for
me. I authorize you to buy up to two thousand shares
at two dollars and a half or under.”
The broker shrugged and consented. The result
was that letters were at once sent out asking for
Arroyo Silver. There was of course none to be had
just then and the correspondents of my brokers were
all told to be on the lookout for a block. This done,
the foundation work was accomplished. The stage
had been set, in other words. It was time to bring on
the actors.261
The Game of Games
This in a big con game is often easier to plan than
to do. I had at the moment not a single prospect in
list or in mind suitable for the size and kind of
machination I was about. However, all things come
to him who knows how to go and seek them. I recalled
one of the strangest and most wondrous fellows in
modern confidence gaming. Old Man Robinson, the
train rider.
For thirty-five years this man had been riding the
trains up and down and back and forth across the
country. For all those years he might have been
found in the Pullman cars of the best trains going
down to Palm Beach or out to California in the
winter, scudding back and forth between New York
and Chicago at other times, riding all the routes at
various seasons according to the trend of opulent
travel. Generally he had his own compartment or
stateroom and he invariably passed himself off as
Robinson, the old circus magnate, who had been dead
for many years when my hero’s adventures were at
the full. This old vaurien was past sixty when I knew
him—a bald, sharp-eyed, florid-faced, distinguished-
looking fellow, deeply read, well informed, easy
mannered and a brilliant and charming talker. When
he began his endless discussions and pointed yarns
everyone in earshot attended and none ever left till
he had done.
The sod has healed above him now. That charming
smile is ashen, that golden tongue dust and Old Man
Robinson will go no more a-gaming. But six years
ago he was still among us and I sent for him. He
was to do for me what he had been doing many years,
the thing for which he rode the trains year in and
i
262 Confessions of a Confidence Man
season out. He was to introduce me and my beautiful
silver mine to one of the lucred dunces be had met
and cultivated as he rode his trains, and for this
service he was to have a tenth of the spoils.
Old Man Eobinson came, saw and consented. That
night he and Doc Leroy and I set out for Chicago,
where Eobinson had the ideal of our evil dreams safely
stowed away in the Union Stock Yards with bags and
bags of swinish money. Behold the approach!
Our train was pulling out of Buffalo after mid-
night for the swift night run westward. Only Eobin-
son, Doc and I remained in the smoking compartment.
“This fellow I’m taking you out to see is no
dunce, Billy, ’' said Eobinson, gazing out into the abso-
lute night. “But I think he’ll fall just the same.
You know why? He told me the story the first time
I ever met him, on a coastwise boat out in the Pacific.
Seems when he and his brother were young men they
both had a chance to go in on telephone stock or
something of the sort. The brother went in for it,
but this old codger pulled back. You know the rest.
The brother got rich and retired at forty or so, though
this old fellow is still at it at seventy. Not that he’s
not rich. Lord, he’s got ten piles! But he never
forgave Fate for switching him off that stock. He’s
had a weakness for your game ever since. If you can
make him think he’ll clean up big enough to have
the laugh on that brother of his he’s your meat. Funny
about human nature.”
And he was off into a set of his wonderful yarns.
Mr. Peter Chapman, very wealthy sheep and hog
man, was glad to hear from Mr. Eobinson again and
immediately invited him to his office. Eobinson took
*1The Game of Games
263
me along for the introduction and I was presented to
a tall, alert, well-preserved fellow past seventy with
a weather-hardened face, a bristling white mustache
and a very cold blue eye. If ever there was a difficult
customer here he was. But he had money ad lib and
could be worked for a big haul—if at all. His game
was worth our best candle and I knew it.
Robinson launched straight into the business in
hand. I was Mr. Crosby and an old friend of his.
Had helped him make a hit of money in my day.
Trouble with me was I never held onto much myself.
I’d come to Robinson with a deal that looked good,
but Robinson was tied up to the limit with a big
circus merger and couldn’t spare a cent.
| * I know you like a good thing when it comes along,
Pete,” said he, “so I brought this young scoundrel
out to you. Mind now, I say he’s all right, but that’s
all I’ve got to do with it. Listen to him and if you
like his proposition get aboard.”
With that the genial old train rider went out of
the door and out of my life—except for some financial
adjustments between us, which were made somewhat
later and by mail.
‘‘Mr. Chapman,” said I when the door was closed,
“I’ve got some valuable information. If I trust it to
anyone who uses it my game is ruined, so I must ask
a promise from you—your word is all I require. Rob-
inson tells me you keep that.”
Peter Chapman chuckled to himself and spat a huge
jawful of tobacco juice into a large but distant
cuspidor.
“Young man,” said he, “with me you don’t have
to get no promises. I keep ’em without makin’ ’em.”264 Confessions of a Confidence Man
“If I give you this information and you decide not
to come in on the proposition you forget what I’ve
told you. Is that right ? ’ ’
“Shoot!” said he, and did as he said—at the
cuspidor.
I explained the Arroyo Silver situation. It was a
stock that had been sold quietly some years before.
The mine had never been worked owing to the death
of the promoter. Lately silver had been found adja-
cent and was certainly present in the claim. How I
came to know this I could not discuss.
The silver had nothing to do with us anyhow. The
point was that a New York syndicate was secretly in
the market for the stock, having confidential informa-
tion about the silver. How I happened to be in on
this I did not wish to reveal, but I could prove my
assertion.
“And here’s where we got on, Mr. Chapman,” I
said sententiously. “Those people don’t know where
most of the stock is and I do. Get me?”
Peter Chapman spat, nodded and looked out of the
window in a bored sort of way. I waited for a long
time in exasperation for some question. None came.
I had to pick up my own thread.
“Now what I need is money to buy up this stock.
I can sell it at a big profit over night—within an
hour. That’s why I come to you.”
“Why don’t you option it and play whole hog?” he
demanded, seeing the weak point of my story in an
instant.
“Tried it,” said I. “The holders won’t do business
that way.”
“That’s funny,” he doubted.265
The Game of Games
“Well,” I asked him, “if you had a block of the
stock and some stranger came along suddenly and
wanted to buy an option, what would you think?”
He saw the point and we settled down to an exami-
nation of my proposition. I have been through some
pretty close questioning, hut none ever to compare
with this. At the end of three hours the canny old
man was still dubious, but I returned ever to one
proposition.
“Ask your own broker to find out quietly if there
is a demand in New York. If he says no, I’m done.
If he says yes, I’ve got a thousand shares of the stock
and I’ll let you sell it for me. That will establish the
price.”
“That’s fair,” he said finally. “What’s your
proposition ? ’ ’
“It’ll take close to a hundred thousand to swing
this whole deal,” I told him. “We will make at
least a hundred and fifty thousand out of it. I want
a third for my information and work. You’ll be
doubling your money on a sure thing.”
Peter Chapman eyed me and gave me a thin cold
smile.
“We’ll think about splittin’ after I go in,” said he.
I tried to insist on an agreement as to the split. He
smiled at me again in the same icy way.
“Yer in no position ta argue,” said he. “You need
money. ’ ’
“Well, Robinson says you’re a man of honor,” I
grudged at last. “I’ll take his word for it.” And
we went to work.
Next morning I turned over to Peter Chapman one
thousand shares of Arroyo Silver stock, par value one266 Confessions of a Confidence Man
dollar a share. He took it to his broker, one of whom
I had never heard, and directed that it be offered for
sale in New York at two dollars and fifteen cents a
share. The Chicago broker wired his New York cor-
respondent for an offer. Chapman’s New York repre-
sentative naturally turned to his memoranda, saw that
my brokers had inquired for some of this very stock
a few weeks before, and immediately communicated.
My representatives met the asked price of two dollars
and fifteen cents and the word was flashed back to
Chicago before the end of the day. So I bought a
thousand shares of my own stock for two thousand
one hundred and fifty dollars. Chapman received the
money, noted the price and turned the proceeds over
to me.
‘‘Good!’’ said he. “Now what can we buy it for?’’
“Under a dollar,” said I, “unless the stockholders
have got word of the new conditions. ’ ’
I now explained carefully to Peter Chapman that
there were five holders of Arroyo stock in Chicago.
One had only five hundred shares, three had reason-
ably large blocks and one man had a great chunk—
about fifty thousand shares. I suggested that we try
the smallest holder first of all, and we did. For this
purpose I had previously planted a young woman in
a rooming-house section near Chicago Avenue. We
went to see her and asked if she had any of the stock.
She seemed doubtful. Her father had left her some
stocks, but she had discovered that they were worth-
less. Perhaps some Arroyo stock was among the lot.
She would have to look. From the bottom of her
trunk she hauled but a dusty old envelope and in it
was a creased and smeared certificate for Arroyo stock.m
The Game of Games	267
I immediately offered her a dollar a share for it, and
I could feel the bitter disapproval in old Chapman’s
demeanor. "When he saw the apparent abjeetness and
ignorance of this girl he had expected to get the stock
for fifteen or twenty dollars. For that very reason I
had spoken first.
The young woman considered.
I guess that’s what father must have paid for it,
isn’t it ? ” she ventured.
“Probably,” said I, “and you’re lucky to get as
much back.”
“I don’t know about that,” she doubted. “I think
there ought to be some profit in holding it all these
years—that is, if it’s worth anything at all. ’ ’
She was stubborn in a woman’s way, but finally
sold to us at a dollar-twenty.
“Ya young fool,” said Peter Chapman as we went
down the stairs. “If yadda offered her ten dollars
she’d ’a’ sold at fifteen.”
I pretended to feel all kinds of a fool.
“Well,” said I, “from now on I’ll let you do all
the dealing.”
“That’d he a lot better,” said Chapman.
So the responsibility was shifted upon this crafty
old man.
These five hundred shares were offered in New York
in the same manner and promptly brought two dollars
and a half a share, the price I had advised Chapman
to ask.
The profits of this deal Chapman put into his safe
and I was delighted to see him sit down with a pencil
and figure out his ratio of return. He had made six
hundred and fifty dollars on this small deal.268 Confessions of a Confidence Man
“See here,” said he, “I thought you said we’d
make a hundred an’ fifty per cent.”
“We will,’’ said I. *‘When we get hold of the whole
thing we’ll make that gang in New York pay what-
ever we like—five or six dollars a share.”
Please observe, my friends, that here was a build-up
embracing a double pay-off or convincer. First I had
sold stock through Chapman and he had seen me take
a profit. Now he had put actual profits into his own
pockets. He was ready for the test.
While I had been handling Chapman my partner,
Doc Leroy, had laid the rest of the plans. He had
employed three temporary conspirators, whom he had
picked up from his large acquaintance in the Chicago
underworld. Two were women past fifty; the other
a hard but innocent-looking young crook. One of the
women was provided with a certificate for eleven
thousand shares of stock, which paper was carefully
spotted with acid and made to look timeworn. The
other woman held similar certificates for eighty-five
hundred shares in three lots. The young crook had
three certificates also, each for five thousand shares.
Finally Doc Leroy himself played the leading role.
He took lodgings in an Oak Park boarding house,
where he passed himself off as a retired physician, a
part as natural to him as the role of business man to
me. So the actors were all prepared. We waited only
for the entrance of the hero.
Peter Chapman had been properly appraised by Old
Man Robinson. He had one great weakness; one deep
fault. The moment he had his hands on money made
without effort out of a stock transaction his cold old
head began to burn and leap with wild dreams ofThe Game of Games
269
huge unearned rewards. I sat up half a night with
him while he went over and over fanciful figures and
calculations mounting higher every time he went over
them. Greed was fairly eating the old man’s senses
out. For just a moment I wondered whether the
thing might not upset the old fellow’s reason and
defeat us at the very climax.
Next morning I met him at six o’clock. Heaven
only knows what he wanted with me at that hour!
He was simply insatiable. We were in his bank before
the clerks had wiped the sleep out of their eyes.
Chapman drew an even hundred thousand dollars
from two accounts and we set out in a rented motor
car to call first on the old doctor in Oak Park.
Doctor Talmadge—otherwise Leroy—greeted us in
the little parlor of his boarding house, a very decrepit,
soft-minded, garrulous old fellow. We inquired
whether he still held some Arroyo stock which he
had got years before. The old physician smiled child-
ishly, rubbed his thin hands and began an eldless
narration. Ten years before he had attended a min-
ing man who had a serious ailment and the patient
not having any money had given him this stock.
Wasn’t it wonderful? He had tried to sell it every-
where, but no one would give a penny for it. He
had put it away into an old tin box with his birth
certificate and his marriage papers and some old love
letters and had forgotten about it years ago. Wasn’t
it strange? Now it was suddenly valuable and was
going to make his last years comfortable. He gushed
away like all the old fools he was not. I, who under-
stood, admired his acting, but I could see Peter Chap-
man’s contempt for a man younger than himself and270 Confessions of a Confidence Man
yet a doddering old weakling. Chapman could hardly
hear the old doctor out.
“Well, what’ll you take for all you’ve got?” he
interrupted brusquely.
“I really don’t know,” the man hesitated in his thin
old voice. “Guess I better run upstairs and get the
papers. I really don’t know what I should ask.”
He walked to the door and paused on the threshold,
the rascally old actor!
“There was a young man here yesterday offered
me a dollar thirty-five for it,” he trebled, disappear-
ing into the hall.
“What’s that?” spat Peter Chapman, sitting up-
right with a jerk.
1 ‘ Somebody’s ahead of us, ” I gasped. ‘ ‘ Good Lord!
Are we too late ? ’ ’
A string of oaths escaped the venerable livestock
man.
“We’ve got to get this old fool’s stock right now
and here at any price,” I whispered as we heard the
physician coming back down the stairs.
“Watch me!” said Chapman grimly, and I knew
he had fallen for the hurrah.
In ten minutes we were outside in the automobile
with Doctor Talmadge’s fifty thousand shares in our
hands and Chapman’s seventy-five thousand dollars in
the safe keeping of Doc Leroy, who was already taking
off his slight make-up and getting ready to assume a
second and more genuine role.
I urged the driver to top speed with oaths and
promises. We rushed back to Chapman’s bank, where
he drew more money, and immediately charged off to
find the other holders of Arroyo stock. We feverishly271
The Game of Games
paid out our money and hurried away with the stock,
thirty-four thousand five hundred shares more in the
beautiful Arroyo.
Curiously enough as we drove off from each succes-
sive house I thought I saw Doc Leroy in the act of
entering. Was it possible that he distrusted his new-
made confederates and felt it wise to be exceeding
prompt in his collections.
At three o ’clock that afternoon I drove a weary but
triumphant Peter Chapman back to his office in the
stockyards and saw him tuck his stock tenderly away
in his great iron safe.
“Well, that cost us a pretty penny,” said he.
“How much?”
“A hundred and twenty-six thousand five hun-
dred. ’ ’
“I didn’t think it would take quite that much,” I
ventured apologetically.
“Never mind,” said he sharply. “How much’ll
we get for it?”
“Five dollars a share—no less.”
* ‘ What makes you think so ? ”
‘ ‘ That man that was ahead of us yesterday undoubt-
edly was trying to buy the stock for the New York
crowd. He had no idea we were on his heels and
thought he could take his time. Pretty rough on them,
eh?” And I took occasion to laugh.
“You think they need our stock that bad?”
“They must have it or we own the mine,” said I.
Old Peter Chapman mused on this.
“We might keep the mine, at that,” he said after
a while.
“Not for me,” I objected.272 Confessions of a Confidence Man
“And why not?”
“Mines are risky—stock selling is sure.”
“Maybe you’re right,” he admitted. “Well, then,
how’re we gonna get five dollars a share?”
“Send me to New York,” said I, “with authority
to dicker and I ’ll get the best price I can. Personally
my advice is to get five a share or hold on for a
while, but you can do as you like.”
“When can you start? To-night?” said the im-
patient old man of greed.
“If you say so.”
“Get ready,” said he.
And he sat down again with his pencil and began
to calculate the profit on eighty-four thousand five
hundred shares of stock bought at an average of a
dollar and a half and sold at five.
“Good-by,” I said when I had got myself to-
gether.
The old man looked up at me from his calculations
and hemmed.
“By the way,” he said with that hard cold twinkle
of his, “twenty per cent of this profit will be nearly
sixty thousand dollars. That’s enough fer ya. Any-
way, it’s all I’ll give ya.”
“We’ll argue about that when we sell,” said I
truculently.
“No argument to it; I got the stock,” said he.
I went down his hall smiling. Perhaps he was
right, and again----
Two weeks later I telegraphed him from New York
offering three dollars a share for the stock at the best
price obtainable from the fictitious New York syn-
dicate.The Game of Games	273
“Refuse three dollars,” he wired back. “Will hold
on for five.”
That, my friend, is all. If the man I call Peter
Chapman is still alive he is also holding on for five.
As for me, I let go immediately. I mean that Leroy
and I sent Old Man Robinson his ten per cent, divided
a hundred thousand net between us and called it a
season’s work.
I wish to point out that in this game figured all
the elements of the perfect piece of con. The founda-
tion work, build-up, and in-and-in were the most
elaborate I ever used. The hurrah came about in the
subtlest and surest possible way. And better yet, no
mails were used and no provable crime committed.
Peter Chapman cut his own bridges when he refused
the offer of three dollars a share. He tried to make
some trouble afterward, but I went on an extended
journey and a year elapsed before he found me. He
was a little weary by that time, pretty certain of what
had been done to him and just as certain that he
had no recourse.
The two reputable Wall Street houses which inno-
cently lent themselves to the game never knew what
happened to the fabulous Arroyo Silver, I am sure.CHAPTER XVIII.
RADIO AND CHAIN STORES.
ONE of the most remarkable properties of the
confidence game is its adaptability. For this
reason the idea that a man may learn the
nature of such con mechanisms as happen to be used
in 1920, let us say, and thereafter be proof against
the wiles of the sharper belongs among the vanities.
Every development of civilization, every social change,
every notable invention brings to life a fresh manner
of parting the sucker and his money. It may be and
usually is only a disguised evolution of an older
swindle, but it is new to the victim and therefor
effective. The last year or two have, accordingly,
yielded green fruit of this poisonous tree.
The reader has only to ask himself what has been
the most spectacular invention of the period to dis-
cover the locale of one of the current swindles. Within
eighteen months the radio hasBome into swift and
widespread use, many thousands of instruments have
been sold, a group of broadcasting stations has been
established, the metropolitan newspapers have been
forced, by the wide spread of the craze, to devote
whole pages and even special sections to the news of
the radio—with the result that con men have been
quick to grasp the apparent opportunity.
As soon as the proportions of the radio enthusiasm
275276 Confessions of a Confidence Man
were discernible there came into the field a large num-
ber—several hundred, at least—of radio companies.
Their names and capitalizations were various, but they
seemed to be strangely uniform in two details. The
number of shares for which they were incorporated
was always very large and the word “radio” was
uniformly used in the names of the new companies.
To an eye like mine these details are of themselves a
sufficient ground for suspicion. The public, less care-
fully on guard in such matters, has already paid
largely for such wisdom as this, for a very large
number of these new wireless firms were plain stock
jobbing schemes, organized to get the money out of
the public pocket. If my readers will heed my words
they will be able to save a good deal of money when
other inventions take the country by storm as radio
did and still is doing.
There has never been, in the history of this country,
an invention of the type that struck the public imagi-
nation and aroused the enthusiasm of the people, whose
early history was not complex with frauds and swin-
dles. The people who put their savings into every
new and promising device forget this sorry fact. We
see the great telephone companies of to-day and their
huge earnings. Looking at them, we forget that the
telephone struggled for a long time before it got to
be a success. Our mind loses trace of all the hun-
dreds of small companies that were formed, struggled
along for a time and went bankrupt, so that even the
bondholders were left high and dry, not to speak of
the verdant holders of stock. We fail to remember
the many fake companies that were organized and
the absolute swindles that were perpetrated beforeRadio and Chain Stores
277
the telephone got out of the woods and hogs and came
to be a money making utility.
In the same way we look at the successful automo-
bile makers and try to compute the wealth that a few
of them have piled up. We see the millions of cars
chugging about the country. We know that when we
go to buy a vehicle of any of the popular makes we
must wait months for delivery, so great is the demand.
With rather weak logic we conclude that the auto-
mobile business is one in which to invest our savings.
But the suckers among us do not go to the exchanges
and buy the high-priced stocks of the successful and
established companies. No indeed. We don’t want
slow and sure small incomes. What we gulls are
looking for is an outside chance to get as rich as
Henry Ford by investing a few hundred dollars. The
result of such idiocy is always and invariably the
same. We lose our hundreds, and it serves us right.
If we only stopped to remember the hundreds of fail-
ures among automobile makers, the hundreds of
fraudulent companies which arose and still arise in
the country and the scores of fakers who have been
sent to prison after they had robbed the people of
millions, we would know that to invest savings in wild
patent schemes is like throwing it out of the window.
When it comes to the radio the state of affairs is
even more flagrant, for it has been only a dozen years
since the great and sensational wireless telegraph
swindles were perpetrated and some of the chief con-
spirators went to the federal prisons. It seems almost
incredible to me that the people of the country can
have so soon forgotten these recent and tremendous
mulctings. It seems to me that no fewer than a hun-278 Confessions of a Confidence Man
dred thousand victims were trimmed by the wireless
promoters between 1905 and 1912. There must have
been losers in every town and hamlet in the country.
The stories of their losses, the exposures of the swin-
dlers and the reports of their trials filled leagues of
space in the newspapers all over the country. Yet
by 1921 or 1922 this great and fatheaded nation is
ready to be trimmed all over again and with a mere
adaptation of the same invention.
The general mode of procedure adopted by confi-
dence men for putting worthless radio stock into the
possession of the people and taking good money out
may be read from the tactics of a New York concern
against which a fraud bulletin has been issued. Let’s
call the promoter Jones, since his name is something
else.
Jones took advantage, first of all, of a trade name,
an old and common trick, against which more stringent
legislation ought to be enacted. The Radio Corporation
of America is of course, the established company which
owns or leases the important patents and investors’
rights and whose stock is quoted on the exchange. In
order to dupe the unwary, Jones adopted a variant
of the name of this corporation, sufficiently different
to get around the law but also similar enough to fool
any innocent. He then incorporated for three or four
million dollars in a state with liberal laws for stock
companies, opened offices in a prominent building in
New York and began sending out a flood of the usual
literature.
The essence of this comeon stuff needs to be glanced
at once more at this point, for every man who ever
bought a share of highly speculative stock and everyRadio and Chain Stores
279
man who has not yet been caught on this hook should
memorize the matter.
Jones' literature started out by saying that America
was the land of triumphant inventions, that vast for-
tunes had been made by those who “got in on the
ground floor,” while others were still dubious and
over-careful, and that here was another opportunity
for those who had courage and faith.
Then came the usual array of fanciful figures,
about as follows:
“If you had bought one share of the original Bell
Telephonp stock at $100 per share, you would now be
worth $500,000. The lawyer who drew the charter
of the company refused to take $3,000 in stock as his
fee and in doing so turned down $150,000,000.
“If you had bought one share of the Ford motor
stock at $100 and hung on to it, you’d be worth
$400,000.
“If you’d bought one share of Westinghouse air
brake stock and held it till now you’d be worth
$250,000.
“If you’d bought one share of Burroughs adding
machine stock you’d be worth $100,000 to-day.”
The list ordinarily used contains the names of sev-
eral other inventions which have made large profits
for the inventors or others, such as the phonograph,
the sewing machine, the telegraph, the Wright or Cur-
tiss airplane, even the porcelain bath tub.
It is necessary to warn the reader at this point that
these figures are absolutely fictitious and without au-
thority from the companies mentioned. They were
compiled by a common swindler of whose character
and work the present writer has intimate knowledge.:280 Confessions of a Confidence Man
The man merely sat down, about twenty years ago,
with a pencil and a pad of paper and made up this
set of names and figures from his imagination. He
used them in a prospectus for booming the stock of
a soap wrapping invention. Since his time every pro-
moter of a fake inventions company has dug out this
staggering piece of fiction, changed the amounts to
suit himself and sent out a new bit of comeon litera-
ture with this fraudulent statistical table as its prin-
cipal bait.
Now, it is unquestioned that the holders of the Ford
stock made great fortunes, but I don’t recall any
time when a single share of it was on the market for
public purchase, so it is idle to talk about having
bought a hundred-dollar bit of it.
In the cases of the other inventions commonly in-
cluded in this list the claims of the swindlers are
just as false and misleading. Most of the companies
passed through bankruptcies, reorganizations, recapi-
talizations and other organic changes, so that the origi-
nal shareholders and their interests must have been
wiped out long ago and probably before anything but
losses appeared on the books of the corporations
named. This is, in fact, the summed up history of
practically every invention and its original backers,
especially where the attempt is made to swing the
device into use by means of public stock subscriptions.
To return to Jones and his radio company, however.
As soon as this charming piece of comeon literature
had been well distributed, other samples of persua-
sively written argument followed. One of them is
remarkable for the way in which it apes the inspira-
tional literature now universally popular among theRadio and Chain Stores 281
salesman and booster class, and out of which the plati-
tude writers have themselves made large and dubiously-
earned fortunes.
This particular piece of mental intoxicant and opti-
cism drug started out by declaring that “fear is the
greatest enemy of the human race.” Timidity was
what held men down, it chortled. Faint heart never
won fair fortune. Those who hesitate are lost. The
world’s captains are its riskers and adventurers; its
slaves are the timid and reluctant ones. Nothing
risked, nothing gained. The lightning of good luck
strikes those who are out in the storm with their
rods of opportunity up.
These exhortations were followed by a still more
subtle argument, worded something like the following:
“The world is full of disappointed people who
might have been rich and happy. Every old man in
America to-day who is stricken by poverty and ne-
glect in his old age can look back on the time when
he passed up the opportunity to get rich because he
was held down by fear and false caution. Opportunity
knocks but once at every door. How will you feel
when you are old if you must sit down in want and
think bitterly of the time you refused in invest the
few hundred dollars that would have made you inde-
pendent? Provide for your old age now. Don’t let
timidity hold you down. A few hundreds will do
you no good unless you can invest them where they
will earn you a competence. Buy till it hurts! This
is your opportunity of a lifetime.”
The pathos of such an attack upon the susceptible
average citizen is that it rings true to the pitch of our
ordinary teaching. For reasons which seem utterly282 Confessions of a Confidence Man
mad to me, the American people insist on being fed
full of a vapid and absurd kind of optimism. We
are the inveterate and infatuate Pollyannas among
peoples. In spite of the fact that nine of every ten
men are utter and pathetic failures and ninety-nine
out of every hundred comparative failures, and in
defiance of the daily evidence of these sorry things
before every man’s eyes, we go about with our rose-
colored glasses, in pitiful emulation of Nero and the
emerald, through which he saw a green world. We
become self-hypnotized; we are positively septic with
diseased optimism. Naturally, when the crook comes
along and leads the cheering with his cry of furious
speculation, we are all too ready to listen. When he
characterizes ordinary caution and decent judgment
as fear, we fall into line and buy his fakes.
So with Jones. In a few months he worked a list
of several thousand child-minded Americans up to a
pitch of credence which led them to pour their good
money into his promotion house for shares in his
utterly bogus corporation. When my collaborator
drew the attention of the federal authorities to the
activities of this gentleman an investigation quickly
revealed the absolute worthlessness of the whole propo-
sition and action was taken which prevented further
gouging of the public, but a good many thousands of
dollars had already been lost.
This is only one of a large number of such confi-
dence enterprises. There are scores of them still
operating in full blast and others will undoubtedly
spring up in various localities from time to time. The
man who is tempted to invest his savings in radio
stocks will do well to remember several importantRadio and Chain Stores
283
facts: first, that there are no valuable patents in
radio lying around loose to be capitalized; second,
that there are, in fact, no basic patents possible in
such an invention as the radio and that anything
but a basic patent is of most doubtful value for the
purposes of a promotion enterprise; third, that stocks
■which offer very large returns are always dangerous
and pretty generally fraudulent. If any of my read-
ers feel that they can afford to gamble in radio stocks
like a man betting on a hundred to one shot at the
track, it may be well for them to note that they are
in the position of the gambler betting his money on
the wrong end of a fixed race.
Another of the new tricks of con is called the chain
store game. I need not call anyone’s attention to the
manner in which groups of shops have spread over
the country, dealing in staple groceries, meats, notions,
dry-goods, furnishings and the like. The ten-cent
stores and the tea and coffee shops are conspicuous
examples. The business fact behind the success of
such enterprises is the principle of wholesale cash
purchasing. But only an organization which has the
most capable management in its purchasing and its
selling branches can hope to make a go of these enter-
prises and there have been numerous failures of chain
store companies and many outright frauds or stock
jobberies.
Within the last two or three years these latter have
become so notorious that the average sucker has been
fighting shy of them. As a result the con men work-
ing in the chain store field were forced to adapt their
scheme and set out after a new class of victims. They
did a bit of logical reasoning and came to the con-284 Confessions of a Confidence Man
elusion that the keepers of retail stores themselves were
the class to be victimized by the new con device.
The rogues, who know the phychology of business
men all too well, realized that nothing could be more
alarming to the average independent merchant in the
small towns and cities of the country than the pros-
pect of competition from a chain store. Just as the
mail-order house has been the black beast of the rural
general store-keeper for the last twenty years, so the
chain store, with its cut rates and its advertising cam-
paigns, throws terror into the heart of the suburban
grocer, hardware and notions dealer and all his breth-
ren. It is the spectre that haunts the dreams of this
tradesman class. On this fact the new chain stores
game was founded,
Less than a year ago an old friend of mine who had
got tired of the slow way in which the stock of his
chain stores company was moving, threw his old com-
pany into the hands of his stockholders, gobbled up
what cash there was in sight and hied him down into
the hospitable state of Delaware, where he quickly
organized a ten million-dollar company, called the
International Chain Stores Corporation or something
of the sort. In his charter application he set forth
that his company intended to operate a general pack-
ing and grocery business, to act as manufacturer,
packer and producer of standard food products, to
deal in such merchandise at wholesale and to open
and operate a series of retail stores in all parts of the
country for the distribution of said goods.
The charter having been duly issued, Mr. Tarleton
Spriggs, my adventurous friend, elected a dummy
president and board of directors, put some convenientRadio and Chain Stores 285
tools into the other offices of his corporation and
opened a headquarters in New York, which was
equipped with much valiant and carefully written
literature.
Next Mr. Spriggs dropped down into one of the
most prosperous of the Southern states, which he had
selected because of its large number of village and
cross-roads grocery stores. In the principal city he
bought a year’s option of a large warehouse and had
made out an imposing looking document setting forth
the terms of the option and the big price at which the
storehouse was to be bought. Of this he had a number
of certified copies made, all emblazoned with colored
seals and attested with flowing signatures.
As the next step of the operation Spriggs filled out
a sheaf of bills-of-lading, which he also supplied with
copious false signatures and counterfeit receipt stamps
of the railroad companies. These fraudulent bills
showed that the International had loaded and was
shipping to the distributing point of this Southern
state a huge consignment of grocery staples.
The work of preparation was not yet done, however.
Spriggs must have a line of samples and a complete
list of wholesale prices, setting forth the character of
the goods his corporation was handling and the prices
at which they could be sold to the retailer. After
adding to his ammunition a few letters from promi-
nent persons, also forged, the adventurer was ready to
take the field. He took a train for the South, bought
himself a new motor car and set out to canvass the
state.
On a delirious spring morning Mr. Tarleton Spriggs
drove into the ambitious little town of Leesboro, put286 Confessions of a Confidence Man
up his suit and sample cases at the provincial hotel
and drove carelessly about town, sizing up the situa-
tion and making careful inquiries. Toward the end
of the afternoon he had armed himself with the neces-
sary information and dropped in on Samuel Parks, the
chief grocer of the town and a man of prestige and
standing in the community. Mr. Parks was humbly
occupied in culling over a sack of potatoes when
Spriggs arrived and shook him out of his calm.
“Mr. Parks,” said the debonair rascal, extending
his hand, ‘ * I represent the International Chain Stores.
I’ve come to open one of our shops in your town.”
If a giant centipede had squirmed its way from
among the grocer’s potatoes the sensation along his
spine would have been more pleasant, for Sam Parks
had been hearing about these devastating chain stores
and this throttling trust for some time. He knew
that chain stores were an abomination and a plague
upon honest (and overprosperous) storekeepers. He
understood their true character as combinations in
restraint of trade (or large profits, perhaps). He
was sure that any such competition spelled ruin for
him. Nevertheless, he managed to greet his visitor
with a show of mannerliness and a dusty hand-
shake.
“Glad to meet you, Mr. Spriggs,” he lied feebly.
Mr. Spriggs set out at once to unfold his tale of
triumph. His company had already leased a big
warehouse in the capital city and a huge consignment
of goods was already on its way south. Here Spriggs
exhibited the option and the bills of lading, which his
victim brushed away with a sad glance.
Within a few weeks, said Spriggs, there would beRadio and Chain Stores
287
■units of his chain store system all over the state. They
would be crowding the local merchants out because
it was impossible for individual storekeepers to com-
pete. This was due mainly to the grasping nature of
the jobbers, who were really operating as a combina-
tion for the purpose of keeping prices high. Did not
Mr. Parks realize this himself? Had he ever tried to
buy a case of prunes from one jobber for even a cent
less than demanded by the others ? If so he knew that
there was a fixed price agreement among wholesalers
and that the merchant was helpless. To all this Parks
had sadly to assent, -wondering the while why the man
who intended to ruin his business should come to him
and grow thus confidential. Spriggs was about to
enlighten him.
“Mr. Parks, I’ve got some information that may
be of advantage to you in this connection,” he said,
t ‘ I wonder if you can spare a half-hour to talk things
over. ’ ’
The two men hid themselves in a rear corner of the
store, out of sight of the occasional customers, planted
themselves on two fruit cases and got confidential,
Spriggs doing the explaining. He opened his sample
case and showed Mr. Parks a line of goods that
made anything in the store look a little shoddy. "When
the grocer said that such things were all very well
but that Leesboro people would never pay their price,
Spriggs came forth with his long and detailed price
list. The eyes of the local grocer bulged. Here with
first-grade canned goods, bottled goods, preserves,
fruits, spices and all manner of grocers ’ articles priced
at a good deal less than he was paying for second-
grade stuff. Spriggs explained glibly that this dis-288 Confessions of a Confidence Man
parity in prices was due in part to collective buying“
in great quantities, partly to the fact that the Inter-
national Chain Stores did their own packing and
partly to the greed of the regular jobbers.
“Now Mr. Parks,” he said when this information
had fully gathered in the grocer’s mind, “it must be
obvious to you that no local grocer can compete with
us when we can sell A-l goods cheaper than he can
put out inferior stuff. That’s the secret of our success.
Now we mean to come into Leesboro at once and it’s
up to you whether you want to be with us or against
us.”	»
‘How do you mean, with you?” asked the dis-
heartened storekeeper.
“Your store can be our chain store in this town if
you want it that way,” said Spriggs.
“You mean------?”
“I mean that we’re not out to close you up and
ruin you by unfair competition. If we can get the
leading grocer of any town to come in with us and
convert his store into a unit of our chain, we much
prefer to do it that way. You retain full ownership
of your store. All the change you need to make is
in the signs and in the line of goods you carry. You
can see why we prefer to do business in this way.
We step into an established clientele with a successful
local man, who knows the people and the conditions,
to run the business. We don’t have to play freeze-
out. We don’t have to slash prices. How does it
listen ? ’ ’
Sam Parks had to do a little thinking before he
could answer so astounding and happy a question.
As a matter of fact he was deluged with pleasure andRadio and Chain Stores	289
relief, but he was a cautious man. He asked bluntly
enough:
“Well, what’s the catch? What string’s tied to
this ? ’ ’
I wouldn’t say any string’s tied to it at all,”
responded Spriggs a little combatively. “In fact I
haven’t yet unfolded to you the full plan or the extent
of your opportunity. Supposing I told you that by
coming in with us you not only became our chain store
and do away with competition but that you will share
in our jobber profits and the profits of our packing
industry, eh? How’d that hit you?”
When Mr. Parks wanted more light, Spriggs went
on to explain. The International Chain Stores was
a ten million-dollar corporation organized on the co-
operative plan. Its plan was to engage in the three
phases of the grocery business, producing or packing,
distributing or jobbing and retailing. Its stockholders
must be the member grocers, who owned the various
retailing units, otherwise the all desired plan of co-
operation could not be carried through. Every owner
of one of the chain stores must also be a stockholder in
the parent enterprise in order that the interest of one
might be the interest of all.
Sam Parks turned a fishy eye on Mr. Spriggs and
asked in tones of ice:
“You’re not trying to sell me any stock are you,
stranger ? ’ ’
He said it with the air of a man who had been
stung before and meant to resent the insult of being
approached again with any stock proposition.
“No, I shouldn’t say I was trying to sell you
stock,” said Spriggs with a definite air of truculence.
290 Confessions of a Confidence Man
“I’m trying to let you in on the biggest chance of
your life. I’m trying to save you from competition
that will ruin you in sixty days and I’m trying to
get you to stop me from going down the street into
the next block and turning Fred Schultz’s grocery
into our chain store for Leesboro. But it’s just as
you say. If you don’t want any of our game let’s
part friends.”
The unregenerate Spriggs rose with a pose of ro-
mantic anger and strode resolutely out of the store
and down the street in the direction of Schultz’s groc-
ery, where he went in and began trying to interest
the proprietor in a bill of goods he did not have
to sell.
Parks, to be sure, had followed his visitor into the
street at a dignified distance and watched his progress
down the way, his disappearance into the Schultz
grocery and his lengthy visit there. Evidently there
was no bluff about this man Spriggs.
It was a trying situation. Parks was a fire-touched
child when it came to buying stocks. The very men-
tion of these explosive bits of paper gave him the
creeps. He had registered a solemn and Shylockian
vow in Heaven to be tempted nevermore. Yet here
was a situation that demanded reconsideration. Was
he to allow the hated Schultz to become the head of
a local chain store and seize the opportunity to under-
buy and undersell him? Could he afford to let that
despised German, who had been forced to play second
fiddle for years in the grocery line, get the bulge on
him and perhaps drive him out of business? The
horns of this dilemma tormented Sam Parks the rest
of the afternoon, with the result that he went overRadio and Chain Stores
291
to the hotel after supper and asked for Spriggs, who
happened to be waiting for just this visit.
The grocer began by explaining that he had sworn
upon his mother’s grave never to buy stock again.
However, he was willing to listen to Spriggs’ propo-
sition and regretted having been rude.
Spriggs was apologetic in turn. He hadn’t meant
to walk out on another gentleman in so brusque a
manner but the idea of referring to the International’s
wonderful proposition as a stock scheme had been too
much for his sensitive feelings. A little explanation
would, no doubt, clear matters up. The International
was forced to ask its members to help in the placing
of the stock for the very reason that it did not want
its shares jobbed about and got into the hands of
strangers. But it was not at all necessary for the
grocer to buy all the stock. In fact, what the Inter-
national did was to allot a certain block of shares to
each town, depending on its size and the volume of
business expected. Now the allotment for Leesboro
was ten thousand dollars. Of course, Mr. Parks was
not expected to invest ten thousand. That was, in-
deed, far from the plan. What the idea really was
would give Parks a thrill.
After the grocer had been comfortably seated in
a corner of the lobby and supplied with a large cigar,
Spriggs went on to declaim.
What would Parks say to a plan which would wed
his chief customers and all the principal people of
the town to him and his store, so that they would
perforce buy all they could of him and no one else,
so that they would be obliged to bring him fresh
business in their own interest ? Could it be done ? It292 Confessions of a Confidence Man
was like rolling off a log. Parks was locally well
placed, wasn’t he ? He was on intimate terms with
the representative people, eh? Well, would it be any
trouble for him to place eight or ten thousand dol-
lars’ worth of stock among his friends and custom-
ers? And if he did this wouldn’t all these people
buy from him in order to swell the dividends of the
International’s stock? Wouldn’t it be to their own
interest to buy all they could of him and bring him
other trade?
Mr. Parks, who had taken fire from Spriggs’ en-
thusiasm, confessed that all this was true. The light
of a great idea had dawned upon him. He saw where
the bread was buttered. By heck! It was a noble
scheme!
Within two weeks Sam Parks had gone about among
his Leesboro friends and sold the stock. Fifteen hun-
dred dollars’ worth he kept for himself and eighty-
five hundred went to customers and local investors.
Late one Friday afternoon some beautifully engraved
stock certificates arrived from New York, all duly
made out to the local subscribers and on the following
morning a certified check for ten thousand honest
dollars went back in the mails.
The same night Mr. Tarleton Spriggs motored off
to the next county, where he repeated his prodigy
upon and against the person of the leading grocer of
the chief town. In the course of the spring and sum-
mer he and his underlings cleaned up sums ranging
from five to fifteen thousand dollars in more than
eighty towns and cities.
All of these places and their leading grocers areRadio and Chain Stores
293
still waiting for the International Chain Stores Corpo-
ration to get into action. And they will still be wait-
ing on the trumpet morning of Gabriel unless their
patience fails them meantime.Wiiyijiií’wnffPS • '	'-KP»11	111