May 



190SI 



THE INDIA RUBBER WORLD 



279 



cers was announced, being identical with those of the Ubero 

 Plantation Co. of Boston. The basis of the $5,000,000 of issues 

 authorized by the consolidated company's charter was the col- 

 lection of properties — presumably lots sold by the Mexican 

 Coffee and Rubber G>. from its original 5000 acres — named as 



follows in a prospectus : 



Mexican Coffee and Rubber Co. Urbahns, Maxwell & McNeeley. 



I'rivate estate of W. D. Owen. J. M. Taylor Development Co. 



Texas Coffee and Rubber Co. Kent, Macqtiire, Hand & Strohm. 



I.ittell Plantation No. i. Ford & Company. 



LIttell Plantation No. 2. Ilackley & Company, 



lilooinington Plantation Co. Private estate of F. L. Torres. 



Worrell Plantation No. i. Mutual Rubber Co 



Worrell Plantation No. 2. Private estate of W. C. Doak. 



Zaring Plantation Co. Private estate of Oskar Dunweg. 



The enterprise kept most prominently in the notice of in- 

 vestors of late has been the Consolidated Ubero Plantations Co. 

 An imposing suite of offices was maintained at No. 89 State 

 street, Boston, in charge of F. E. Borges, whose name ap- 

 peared nowhere on the company's printed matter and who ap- 

 pears not to have been an oflicer in any Ubero company. He 

 seems, however, to have been the most active spirit in the 

 management, in New England at least, where the business 

 was the sale ol bonds of the Consolidated company — a bonus 

 of stock being given with each $500 bond sold, on the idea 

 that after the redemption of the bonds, the property would 

 vest in the holders of the capital shares. Favorable reports on 

 the progress of the company were distributed from this office, 

 and visitors were shown specimens of cofTee and fruits, sup- 

 posed products of the plantation while the young rubber trees 

 were developing. And dividends were paid. F. L. Torres was 

 for awhile prominently advertised as "general manager," at 

 the head of the executive force at the plantation, but his name 

 of late has dropped out of sight. Ubero Plantation Co. of In- 

 dianapolis appears never to have been under a different man- 

 agement from the Boston concerns. 



* * « 



Beginning with a shareholders' meeting of the Ubero Plan- 

 tations Co. of Boston in January last, dissatisfaction with the 

 management of the company began to be expressed freely. In- 

 vestors' committees were appointed in both companies and a 

 detailed investigation of the properties in Mexico was ordered, 

 this being made by \V. L. Wadleigh, a former crude rubber 

 commission merchant in Boston, and later a director in the 

 Ubero companies, and John F. Browning, of Duxbury, Mass., 

 an investor. 



Their reports were made public about the first of April. 

 Without going into detail, it may be said that the investigation 

 showed a much smaller amount of development work done than 

 the investors had been led to expect, and the value of the es- 

 tates was very much less. The amount of planting was not 

 what the contracts had called for, and the value of the crops 

 was practically ^//except as regards the growing rubber. Noth- 

 ing was found by the inspectors to justify the statements al- 

 ways made that the liberal dividends paid by the two Ubero 

 companies had been realized from the sale of products. Several 

 meetings of investors were held in Boston at the call of vari- 

 ous parties interested, and various committees were appointed 

 at these meetings to take action in the matter. 



On April 18, Jeremiah Smith, Jr., and Hugh W. Ogden, law- 

 yers of Boston, were appointed temporary receivers for the 

 OT<?r() company, on the application of B. S. Tolman and other 

 investors, by Judge Francis C. Lowell, in the United States 

 court at Boston, and on April 21 Jeremiah Smith, Jr., was ap- 

 pointed temporary receiver for the Consolidated company, on 

 application of Edwin O. Childs and others. These appoint- 

 ments afterward were made permanent. 



From various statements made in the legal proceedings, 

 or appearing in the Boston newspaper reports of investors' 

 meetings, it seems that the books of the Consolidated at one 

 time showed subscriptions for $2,300,000 ol the bonds, but as 

 many subscribers on the installment plan failed to keep up their 

 payments they were dropped from the list. It is estimated, 

 however, that $1,500,000 has been collected. The company has 

 paid 6 per cent, interest on the bonds and 3 per cent, on the 

 stock given as bonus to buyers of the bonds. It is alleged that 

 shares in the Ubero company to the amount of $578,000 were 

 sold to about 900 persons, about 400 of whom bought shares 

 outright, for $295,000. It is alleged that of the money taken in 

 $326,000 was paid to La Puerta Plantation Co. — W. D. Owen, 

 president — and $123,000 in commissions on sales of stock. A 

 motion for the appointment of a receiver for the Ubero com- 

 pany pending in the Boston superior court at the time of the 

 action by the Federal courts was withdrawn. 



It is understood that the investors will insist upon the can- 

 cellation of the contracts with the inside " development " com- 

 panies, and that the properties be taken possession of by the 

 two companies in which their money was placed. This may 

 prove an intricate problem, since the various corporations, 

 parlies to the several contracts, are organized in different states, 

 and the real properties situated in a foreign country, ^hile the 

 master spirit in the financial management is not a responsible 

 officer of any of the companies named. 



The Chicago Evening Post, in an editorial, thus aptly de- 

 scribes the" Ubero " financial system :" The promoters - - - 

 managed to have other companies organized before the time for 

 paying the large dividends that had been promised to the stock- 

 holders of the first company. Then the money received from 

 the sale of the stock in the second company would be used to 

 pay dividends to the stockholders of the first. And when the 

 time for dividends in the second company arrived, a third com- 

 pany would be organized to furnish the second company's div- 

 idends; and so on, till the scheme was exposed and the Fed- 

 eral authorities broke the chain." 



• « • 



The postal authorities at Washington on April 10 gave a 

 hearing to representatives of the Ubero Plantation Co. of Boston 

 and the Consolidated Ubero Plantations Co., a writ having been 

 issued, on evidence submitted by postoffice inspectors, com- 

 manding them to show cause why a " fraud order " should not 

 be issued against them. The defsnse was argued ably, but 

 without avail, an order being issued on April 17, directing the 

 postmaster at Boston not to deliver any mail to the two com- 

 panies, or to pay any money orders drawn in their favor. All 

 mail directed to them was to be returned to the senders, 

 stamped" Fraudulent." The case was directed by the assistant 

 attorney general for the postoffice department, whose memo- 

 randum recites: 



The plan of Owen and Borges, in both of these companies, was to 

 secure the names of prominent men to create an appearance of stability 

 and then, by alluring literature and the payment of fraudulent dividends, 

 to give the scheme the appearance of a profitable enterprise. The de- 

 velopment work done at the plantation was solely for the purpose of 

 misleadingvisitingdirectorsandinvestors. Allthe fundsof the company, 

 which would of course have to be used for the purpose of purchasing the 

 land and developing the property, were diverted to the pockets of the pro- 

 moters through the medium of selling companies, who also undertook to 

 develop the property. As the properties were not developed and not 

 even transferred to the other companies, investors today have nothing 

 to show for their money. 



The receivers appointed for the two companies at once took 

 steps to have this fraud order vacated, on the ground that as 

 appointees of the Federal courts they were to be considered as 



