i,
TltE OREGON STATESMAN, SALEM, OREGON
WEDNESDAY MORNING, AUGUST 27, 1924
I
' a
r-
.
h
i .
f :
V
V.
-
i
it
- i .
t
-.
i
i
r
9
r
i
Vrcdint Cccli Ccasraluliic Mail Cleric " V . ,
i 4 Who Shot end IUlIed Bandit He Foiled in Hold-Up
? ' ' " - - - v 11
1 : ' I.. :- W
I - I -& 4 W
. - r y'. x. J -
mK - v. I s
lil. -kYs.Cx "J A -V, 1 :
This photograph iru taken at
the White House as Mr. Coolidge
waa ahaklng hands ' with Eugene
Btack who ot July 1 shot and
killed at East -Orange. N.J-. John
J. Manyon, mall bandit. Before
meetlnjr the President youngr Stack
WEST LANDS ON
DUfJDAS-r.lARTin GAFJG
(Con tinned from pace 1)
made and the losses written -, off
as of pecember 31, 1923, there
was w deficit' ot approximately
$500,000, which, added- to the
$300,000 or more paid ; la pre
mlums by purchasers of preferred
stock, meant a loss of orer $800,-
000 to: stockholders." " i
f a:.speciar Joint meeting of
the . stockholders held' July 30,
)924," the report adds, it was de
cided to dispose o the remaining
assets' amounting to approximate
ly $657,000 and dissolve the sev
eral corporations. This was done
and the assets were taken over by
the Oregon Trust company.'
An Mea Unfolded
' The report opens with an ex
cerpt " from an article entitled
"The Plan," appearing in the
Christmas : 1920 number ot
"Force," a bi-weekly house organ
published by Dundas-Martin com
pany. It reads: "Dundas-Martin
company is the outgrowth ot an
Idea. . It was founded in February,
1918, by . Arthur LuV Dundas .and
George F. Martin,, bqsinesa j and
professional men of Portland, Or.,
both of whom; had had successful
careers in, connection 'with? the
marketing of financial, securities
inHhe east, having ieen .Identified
as executives .ci a liri flaa&clal
company in Nw . ,?6rk'city;;'; ;
1 "Their idea, in brief, waa this:
If a financial institution could be
founded which would bring high
grade investments and,' securities
directly to the people, which would
give the people a fair share of the
earning power of their money, a
large clientele could- be-built up
and a successful business devel
oped." After a. recital of the four
basic facts of the Dundas-Martin
Mdea" the article continues: "In
brief. It was realized that while
the man with a little money may
not be able to- obtain much- be
yond the ordinary and prevailing
rates ot interest, if thousands of
such men could combine their cap
ital into, a large sum and entrust
It' to men of Integrity and ability,
this capital might be employed in
Such a manner f that, every con
tributor to the fund would profit
in proportion to the amount, in
vested and would, secure larger
earnings than' ordinary Interest.
Such a plan followed steadily and
consistently by tne average man
over a period of years would bring
to him the. method by whicbf he
could safely realize his ambition
and desire for comparative finan
cial independence, growing out of
safe and profitable investments."
'f At this point the report quotes
mhe Dundas-Martia creed": which
was: "We believe in the Unitbd
States as a government of the peo
ple, by the people and for the peo
ple. . We believe In -the. principles
of freedom, equality, justice and
humanity. We- theref6re believe
in a financial : democracy, a ser
vice of financial Institutions, of
the people, by the people and tor
the people."
; Four Companies Formed
The four finance corporations
organized by Dundas-Martin, ac
cording to- the report, were the
Western Finance corporation, the
Northwestern Finance corporation
which later becamet the .Mortgage
Cond company , the American Se
curities company and the Second
Northwestern Finance corporation,
having a combined capital stock of
$2,676,000, of which $1,350,000
was preferred and ,! $1,325,000
common. Holdera. of preferred
stock; were to-receive 7 per cent
cumulative dividends and half the-
net earnings after 7 per cent had
been paid on-the common stock,
which only carried voting, prlvi-
IC5.
j All the common stock,. the re
ort states, was given- to Dundas-
Ilartia company; which "returned
half of the common stock receiv
ed to the several treasuries of the
corporations.
v. "This treasury stock," the re
port states, "was then offered as
a bonus to the purchasers- of the
was recelred by Postmaster Gener
al New who presented him with a
check for $2,000, the maximum
sum allowed by Congress for deeds
of bravery performed ' by men In
the postal service. ;
ation was $50 per share. . The sell
ing price by the Dundas-Martin
cdmpany. It la stated, was $125
for the former and $62.50 for the
latter. Thus it received a com
mission of 20 per cent ot the sale
price. The stock was sold in sets
of two $100 Uhares of preferred
and one of common: or of four
$50 shares of , preferred and one
of common. The selling price was
$250 per set.- : - ' . - ''
Thus,1 according to the .report,
the investor believed he was mak
ing a 7 per cent investment. ' "
"Ther only thing Of value receiv
ed was the preferred stock. Hav
ing paid a premium of 25 per cent
for. this stock, his, annual return
would be only 5.6 per cent."
Commissions Over $300,000
"It appears that; $1,206,200 of
the authorized preferred stock in
these four, finance corporations
was sold, - J paid for and issued,"
representing, 6031 -'sets of shares
npon which the selling commis
sion was $301,550. '
"The entire issue of $1,350,000,
It seems, f was sold, but as most
ales, were made upon the install-.
ment plan and the stock . issued
only when paid for, It is quite evi
dent that the difference , between
the-, amount authorized and the
amount -Issued, or $143,800, rep
resents defaulted contracts. As
the first payment received" was
nevey lessi than1. $50 per'set,- the
se'.Uag ageata.were sar of their
commissions -which 'were always
retaineo. . , - . ? ;
Dundas-Martin Co., by reason
of its common Btock holdings,
were able to i retain,' control of
these i corporations and use their
credit1 in5 the underwriting of In
dustrial stock issues, ; v
"In underwriting the stock Is
sues ot the Stradivara Phonograph
company , and - the King's; Food
Products company," , the report
states; "it 4 was neeessary for the
Dundas-Martin , company to ad
vance or guarantee1 the payment
of large sums ; of r money pending
the sale of the stock and they felt
free to use the assets of the fi
nance corporations for this pur
pose andi while' the finance cor
porations were taking all the risk.
it does not appear- that they were
permitted' to share in the profits
of the underwriting and stock
wales but were :i allowed only a
small fee." ( i ; :;; f ,;
The report continues:
"Another . indefensible practice
which deprived the finance cor
poration of large' profits was the
purchase- from them of all delin
quent stock, sales contracts. Most
of the sales of stock in these com
panies were" made upon the, in
stallment plan,, and there were
many defaults. When these de
. HSEi" '
' 1 s.
t t t Jl Days Starting Thursday. .. '
. -; . .iiii i ii in in i i i ,
LIBERTY
. . . . . t.
WEDNESDAY
i ; Loot' EDhy
. TO SEE
if- .
linquents were sold out, the Dundas-Martin
company appeared al
ways to - be the purchaser, l The
amount paid- for these contracts
was the balance due thereon. .In
the case ot the purchase of a de
linquent contract covering a; set
of shares upon which, there was
only $50 due, the Dundas-Martin
company would, upon payment of
said amount, i be entitled to the
stock, which could again be sold
to the public for. $250, or at
profit of . $200. The Dundas
Martin . company made vas't ; sums
through these practices, and thus
deprived the finance corporations
of an opportunity to profit. . -'' , j
"In order to meet the expense
of operation and pay the promised
7 per cent dividends on preferred
stock, it. was necessary for the
management 'to keep the capital
of the concerns .'loaned at the
highest possible rates of interest,
and this took it into fields where
the risks, and losses were, great.
Automobile paper seemed attrac
tive but the venture proved dis
astrous. . ; , ,
Slump Come ; -
When the slump of -1920 came
the concerns -were caught with a
large amount of automobile ' pa
per and were obliged to take over
hundreds of automobiles which
had been pledged as security 'for
loans. To meet this situation, the
American Warehouse and Sales
company was organized- In Jan
uary, 1921', and all automobiles
and other personal property, taken
over by the several companies,
were delivered to the warehouse
company, and were , carried Upon
the finance corporation's books at
an amount which would cover the
original loan; interest and the cost
of re-possession. "In this and other
ways the great losses which' the
corporations 1 had sustained were
covered up. The passing of div
idends at the end of 1921, how
ever, caused murmurlngs among
the stockholders : and i Messrs.
Dundas and Martin saw it would
soon be time to fold ? their tents
like the 'Arabs and as silently slip
profitable for the promoters but
disastrous to the stockholders.
Deficit Totals $800,000.
The preferred stockholders had
nothing to say in the' manage
ment of these corporations. ' The
control was in Dundas1. & Martin
through the common stock held by
them. They apparently gave no
thought to the welfare of the pre
ferred" stockholders who hadiprot
vided the capital. The funds and
assets of the corporations were
freely used to promote other en
terprises from which Dundas &
Martin received large profits.; If
these companies ' had had honest
control and their "affairs been coni
ducted In a businesslike manner
and in the interest of the stock
holders,' who had provided the
capital, it la not likely that any
losses of consequence would have
been suffered. "
The management . and control
ultimately passed to other hands
and when an appraisal of the good
assets1 was1 made and the losses
written off ; as of . December 31,
1923, there was a deficit of ap
proximately $500,000, which, add
ed to the $300,000 or more paid
in premiums by purchasers of
preferred stock, meant a loss of
over $800,000 to stockholders."
Asset Sold ; ;
V "Owing to the financial condi
tion of the companies and the ab
sence of any feasible plan of re
organization matters were allowed
to. drift until March, 1924, when a
plan of consolidation through a
sale of the assets of the four com
panies to the Oregon Txnet com
pany, a bond 'house of Portland,
ure., was formulated and ? sub
mitted to the stockholders, i This
plan, together . with: financial
statements , as - or December 31,
1923. Is Included In a circular
which-was sent to the stockhold
ere. A copy of this circular is at
tached, hereto and' made, a part of
this report. , .
"At a special joint meeting of
tne stockholders held July 30
1924, the condition and affairs of
JAMES CSIUZB vuosoi 1x
the ' corporations were fully dis
cussed and it was; decided that it
would be the best interest Of the'
stockholders to dispose of the re
maining assets,, amounting to ap
proximately $657,000 and dissolve
the corporations.; ;":T?"
"The proposal: of the Oregon
Trust company. to purchase these
remaining assets' was considered
and accepted as;belng in the best
interests of the stockholders.
"The four corporations have,
therefore, been dissolved andthe
said remaining' assets have been
taken over, by the Oregon Trust
company." - v
- Iiettcrs are Included ' : '
Appended to the report are cop
ies of two letters addressed to the
Dundas-Martin ' company by S. Iu
Eddy, vice-president or Ladd &
Tilton !bank. . One letter, dated
December' XI, 1920. ' expressed
gratification' over the " way in
which that concern was handling
the securities . of the Stradivara
Phonograph company; The sec
ond letter, under date of "January
18, 1921, expressed the wlsh that
the efforts ot the Dundas-Martia
organization in marketing the se-J
curities of the King's ' Food ;Pr'p.
ducts company would be success2-
fui. i
. Also appended to the report is a
financial statement of the' condi
tionVof the four finance corpor
ations made to : the stockholders
of those corporations by the" di
rectors . under date of March 15,
1924, when the plan of consolida
tion, of the four 'companies and the
sale : of their assets to- the Oregon
Trust company was proposed. v
BI6 AUTO IS
Man - Receives: Badly -Cut
Leg on Highway Bott!ev
l of Booze Found :
- One man received a badly , cut
leg, a large Pafge automobile was
nearly demolished and a half-pint
of intoxicating liquor was confis
cated shortly after noon Tuesday
near Sunnyside, about six miles
south of Salem ' on tho Pacific
highway. The automobile was
driven by F. NlWatt, of Portland,
with Thomas "A, Miller, also of
Portland, as a passenger. Miller,
who received the injury, assumed
responsibility for the liquor and
was fined s $5$ -for possession In
the Justice court. - The arrest was
YBUID
Wednesday Thursday - Friday
and Saturday !
Oow Playing
4$
made by State Traffic Officers
Williams and Ring, who - were
called- to Investigate the accident. '
Upon: reaching the' automobile
the twb traffic officers found the
machine squarely on its back, and
the men1 nearby;1 Wonder as to
the possible cause of the accident
was5- discarded upon finding : the
bottle ot liquor; in the grass to
gether' with two drinking cups.
The automobile had left the
highway ." on : ah upgrade and
straight road. lt will take several
hundred dollars to put, the "ma
chine in running condition again.
It was' partly because of the in
jury to Miller ; and the extent of
the damages to the car that P. J.
Kuntz; justice iof the peace,-eased
up, a bit on the Tine.
i U D ;'i t'-t .:-.. if . . ; .
BUDGET,' iS PIVEH r,-
. ' 'TO SCHOOL BOARD
(Conttaned froia pf 1) j .
the coming year and were ;$7500
for tho two j preceding j years.
There watf no construction author
ized on the ;budget the last two
years but in 1922-23 ; $4700 . was
spent. ' The" emergency fund is
considerably smaller' this' year
than - in those for which figures
are giveft, being $920. In 1923
2T4 the "budget provided for $1470
and $1375 in 1922-23.
Receipts Will Grow .
' Receipts are ' from various
sources, j the district tax (6 per
cent limitation) being, the greatest
source ; of i revenue,, $133,500 ; for
the coming year. The receipts re
from the state school fund, county
school , fund, '(elementary,, school
rund ; high, school tuition, and
other sources, j Total receipts for
1924-25 are estimated at , $314,
150 against $269,500 tor 1923-24
and $343,250 in 1922-23.
. The sch'ool board , has not y at
considered thei- budget but will
take action upon it in the near
future. , , :' . j .
PARTY MOTORS
SILVERTONj Or., Aug.' 26.
(Special to The Statesman.) Miss
Lillie Madsen, Miss Cora Satern,
Miss Esther Saunders, Victor Mad
sen, and; Harold Larson, motored
to Brooks ' Sunday ; ' where they
spent a short time at "toe home of
Mr.'and Mrs. Arthur Madsen, go
ing from there? to Salem to call
at the home of Mr. and Mrs. Al
vln Madsen. -The young people
then motored: to Portland where
Miss , Saunders will visit at the
home of a sister before returning
to eastern. Oregon where she will
be principal of j the Cove . high
school .for- the ensuing year,:
A Worthy Successor to The Covered Wagon."
iMcme ehitretgtn ntiturdl coldfejt
AM
V9
Master Story
,
T
t
r u. ,w
lb. OflJF
miNK OF IT Zane
like, .ever scene
V own mlors! Withoat
STOIfCIR
IK
Effects of .Storm Reported
! Raging Along East Coast
are Very Light .
!-: NORFOLK; Va., Aug. 26 Dam
age along the- North Carolina and
Virginia coast from the storm of
Monday night and this morning
was comparatively light, according
to-" reports ' reaching governmental
agencies here. .Sinking ot the tug
Mildred McNalley In Pamlico
sound and interruption- to ship
ping ' and wire . communication
along, the coast, constituted 1 the
most " serious losses. . The Mc
Nalley's crew of ten men was
saved. One- man, Peter. Kozlow-
sky, a longshoreman, was electro
cuted- this morning when he came
in. contact with a live-wire which
had blown down during the night.
The tug Bermuda of the South
ern Transportation ' company was
reported at the-mercy of the gale
with three light barges In tow,
rode through safely. : j I
Natural: Color Fiim j
At 'Oregon Today
1 Patrons of the Oregon- thejater
the remainder of this week 'win
see; for the first time a complete
photodrama done in the natural
colors of the settings in which the
various scenes were filmed.- j
' The picture is "Wanderer of
the Desert," a Zans Grey story
that . has1 been filmed " by Irvin
Willat, and the locations' (were
practically all in the Grand can
yon and Mojave desert,- the gor
geous colorings of which are
exactly reproduced . on the screen
by the new technicolor, process.
There is not a black and white
sequence in , the entire length ot
the film. .All of , the , beautiful
'shadings- that have made Red
Rock canyon and the great Ameri
can "desert are there. !
The-story Itself is one of Zane
Orey's best, said by some critics
to' be the most, powerful thing he
has-ever written, and it is excel
lently., interpreted by an- all-star
cast. - Jack Holt as Adam Larey
scores the greatest success of his
career. Opposite him is i Blllle
Dove, former Follies beauty and
WW.
Grey's masterpiece Ja- color!
LITTLE D
. ...
gorgeously real, and the actual' Western-, background in Nature's
doubt, the screen's most magnificent photoplay.
a screen star of no mean magni
tude. Kathlyn' Williams and Noah
Berry also have prominent roles.
Throughout j the entire story
runs a gripping love theme that
is enhanced and enlivened by such
thrilling : incidents as Holt's leap
Ever fast
36 Inch Suiting, 49c yS. .
38 Inch Gingham, 60c yd.
36 Inch Basket Crepe, 79c yd.
Our New Fall Ready-to-Wear
. Will Delight You
Come in and see them, when
" ; you re down - -
' Your Mail Orders
receive careful attention. We prepay the , express - or
postage within a radius : of a hundred miles. ' -
: ' '' ' ' : .
Satisfaction: Guaranteed ;
... f t .
on every purchase or your money cheerfully-refundo3t
Salem Store
466 State St.
If
New York Telegraph
Every .cUaracte absolutely 'life
from 0-foot cliff into 'F-nd t!:-t
swallows him up. The'avalancha
scene and the fight between licit
and the robbers .who are forcinjr
the bid prospector to do the work
of a burro are other incidents that
give unusual punch to the picture.
Sia
Guaranteed absolute
ly fast . to soap - and
boning fast to sun
and weather.- fast to
perspiration and uric
acid. Fast to every
thing" it encounters as
a dress; blouse or suit
fabric. All 'colors. : -
J f: ' V -
Portland Sine EI.;? t
383 AIIerSL-
Comedy
a
mounh V.
1 I
I !
Path? News
referred stock." J
Commission 20 Per Ct'nt
Sf 'i. L i
; Tie par value of the prefers!
' ia three of the corporation
i