During his career, Frank Fayant wrote a number of exposés about stock market fraud. But this recounting of radio industry frauds, while extensive, made up only a small percentage of his work -- there were much longer articles about other topics, especially mining and oil stocks. The review of the radio industry began as a section within one of Fayant's "Fools and Their Money" articles, and was then expanded in a separate, two-part series, "The Wireless Telegraph Bubble".
 
Success Magazine, January, 1907, pages 9-11, 49-52:

Fools and Their Money
By Frank Fayant
Fourth Article. How Mining Fakes Are Advertised



    THE promotion boom is here.
    It would warm the cockles of Colonel Mulberry Sellers's heart to read the Sunday newspapers these days, for they carry page after page of advertisements of "millions-in-it" schemes, such as the Colonel never dreamed of. This promotion boom already exceeds in proportions the memorable one of the two years following the flotation of the United States Steel Corporation. The man who has money to invest, and who rightly demands that it shall bring him a larger return than is made to him by the savings banks, wants to know what return he is likely to receive from investments in the stocks of all these companies now offering their shares through the newspapers all over the land.
    The investor wants to know whether he will have a fair "run for his money"--to use the vernacular of the promoter--in the Chicago New York Electric Air Line Railroad, the "grandest opportunity the people have ever had to invest in a gigantic commercial undertaking of national reputation;" the Electric Signagraph and Semaphore Company, "an opportunity for another such financial whirlwind as was the Bell Telephone;" the Union Brake and Shoe Company, having the "strongest possibilities of any company that has sold its stock to the public in recent years--pays millions in dividends;" the Mines Development Company, based on the "greatest gold and silver discovery ever made in America;" the Montezuma Mining and Smelting Company, an investment which "will net twenty-four per cent. or more at the start;" the Guanajuato Amalgamated Gold Mines Company, "one of the greatest mining enterprises of the age;" the Leffler Electric System, "something so much better and so much farther in advance of anything else ever heard of that it is bound to make millions for its stockholders;" the San Domingo Mining Company, the "greatest mining proposition of Mexico--five thousand per cent. profit in eighteen months;" the Copper Belt Mines Company, which "should earn fifteen hundred per cent.;" the Nevada-Commonwealth Mining and Milling Company, which has the "largest body of ore in the West;" the Friede Globe Tower Company, the "greatest investment chance of a lifetime;" the Marconi Wireless Telegraph Company of America, the "best investment in the world;" or the American De Forest Wireless Telegraph Company, in which "a few hundred dollars invested now and given to your children should make them independent."

Harvest Days for the Promoters

    Then witness the alluring prospect offered an appreciative public in the Geyserite Manufacturing Company, "an exceptional opportunity to invest your savings where they will be absolutely safe and secure;" the Central Mining and Development Company, the "greatest money maker Arizona has ever known;" the International Gold Mines Company, the "most genuine mining proposition ever offered to the American people;" the Central Mining and Development Company, the "greatest gold property Arizona has ever known;" and hundreds of other new companies for which equally extravagant claims are made.
    How many of these companies, in the advertising of which the English language is drained of superlatives, are going to live and pay dividends? The same question was asked five years ago about a mass of new companies advertised with the same reckless use of superlatives. During the winter of 1900-01, the investors of the country went mad over stock speculation. The country was in the full swing of an unprecedented era of commercial prosperity. Great industrial and railroad mergers, creating hundreds of millions of new securities, inflamed the popular mind. The public invaded Wall Street, and went on a speculative debauch, culminating for the time in the Northern Pacific panic when the stock of a railroad only a little while before almost worthless sold at $1,000 a share. The mania for getting rich quickly through speculation in stocks affected the whole country. The shame of it was that the debauch was led by men of standing in the community, who were intoxicated by their greed for gold. Investors were credulous as they had not been since the days of the South Sea Bubble, and the promoters--good, bad and indifferent--reaped a harvest. What has become of the hundreds of companies brought out then?

Either Fakes or Mistakes

    To answer this question I have investigated every company that advertised its shares in the Sunday edition of the New York "Herald" in 1901, and in two months of the autumn of 1902. I use the "Herald," because its Sunday financial section carries more new company advertising than any other newspaper in the world--and it charges the highest rate for it. During the fourteen months under review, the "Herald's" income from this advertising was in the neighborhood of $175,000. It reached $5,000 a Sunday in the autumn of 1901.
    In the opening article of this series, this assertion was made: "The bulk of the financial advertising in the leading newspapers of the country is intended for the fools." The investigation I have made of the one hundred and fifty companies advertising their stock in the Sunday "Herald" in fourteen months of the last promotion boom will prove whether this assertion, which has been so violently criticised, is true. Horace J. Stevens, of Houghton, Michigan, whose "Copper Handbook" is the standard authority on the copper mining industry, writes me: "Most of the mining companies advertised in the newspapers are either fakes or mistakes." John Hill, Jr., of the Chicago Board of Trade, who has done such valuable work in driving swindlers out of Chicago, writes me in similar vein. The Denver "Daily Mining Record," a militant champion of corporation publicity, carries in its columns daily a list of twelve hundred mining companies "not entitled to public confidence." "The trouble with many companies," the editor tells me, "is that those who want to sell stock are too enthusiastic." Yes, enthusiasm runs riot when the promoter discovers he can convert his reams of stock certificates into real money by spreading his enthusiasm over the advertising pages of the newspapers.

A Graveyard of Buried Hopes

    How many of all these one hundred and fifty companies of 1901-02 are making money to-day and paying dividends to their stockholders? One--just one! Just one of these one hundred and fifty companies that sold many millions of dollars of stock to the public is to-day paying dividends. It has paid two dividends of one per cent. each this year, and its stock is selling in the market at less than half what investors paid for it five years ago, although its promoters asserted then that "it is doubtful whether anything has ever been offered to the public for subscription which gives so much promise from so small an outlay."
    In all this brave array of wonderful ventures that were to make fortunes for the credulous, one company is paying a dividend--and a dividend smaller than that paid by the savings banks. One other is a going manufacturing concern, that ignores my request for information; a third is a going real estate company, that repurchased from investors the stock sold to them; a fourth is a plantation company waiting for its rubber trees to grow up; two are struggling oil companies in need of money; eighteen are gold mines, still hoping to strike it rich, and nearly all are in need of money. Of the one hundred and twenty-six other ventures, twenty-two may be classed as moribund, while the remaining one hundred and four are dead and gone, forgotten by all but the investors who bravely put their money into them.
    And now to look behind these cold figures of buried hopes!
    The man who set the pace for the wildcat promoters of 1901 was L. E. Pike, of Hartford, Conn., dubbed by Mr. Stevens "the notorious Pike." Pike spent in 1901 and 1902 not far from $150,000 in advertising--profitable advertising. His flamboyant poster broadsides in the newspapers made all the little promoters gasp in envy. Recklessly, ridiculously extravagant in their promises and prophecies, these big, black-type, circus-bill appeals to small investors reaped a rich harvest. The whole problem with Pike was how to sell a maximum amount of stock at a minimum advertising outlay. To sell $100 worth of stock at an advertising cost of $80 was poor business; to sell it at a cost of $40 was good business. He cared little about the intrinsic worth of properties he exploited. A hole in the ground was, in his mind, a gold mine, and, after Pike had turned the English language loose on it, it became one of the richest properties on the face of the earth. His Washington Copper and Milling Company, claimed to be "the richest property in the United States," had nothing more than a fifty-foot hole in a gravel bed.

Around the World in an Hour

    I am using the past tense in telling the story of Pike. But Pike is not a memory, like his companies. He is in Hartford to-day, and even now may be poring over his dictionary for new adjectives with which to decorate more circus-bill tales of fortune making in oil or gold or marvelous inventions. I wonder that the new craze for mining stocks, rapidly growing into the proportions of the South Sea Bubble, does not bring Pike out of his hiding place. He has a fortune salted away, and it may be that he is not avaricious. But, earlier in the year, before the Sunday newspapers began to carry pages of company advertisements, Pike did venture for a little while into the market place. His bait for fools this time was Martin's Giant Revolving Globe and Panoramic Trip Around the World. Pike described it in this wise:
"A wonderful architectural structure, a realistic representation of the whole world on a gigantic globe. The interior of this revolving world is entered by thousands of visitors daily, who make the entire grand tour of the world, visiting all countries and all climates, seeing all nations and the inhabitants thereof . . . . most stupendous and overpowering attraction . . . . grand and gorgeous spectacle . . . . ever presented."
    This "grand, gorgeous, stupendous, overpowering attraction," reduced to cold figures by Pike's "grand, gorgeous, stupendous, overpowering" mathematics, might be visited in a summer by 25,000,000 people. "At twenty-five cents each," figured Pike, "that makes $6,250,000. But let us be conservative. Suppose only 2,500,000 visit our attraction. That would mean $625,000 annually. This would mean that you would receive the first year, and every year thereafter, nearly three times your original investment in dividends alone. These are facts--undeniable facts--which guarantee a brilliant success." Pikes' trip to New York must have been a failure, for he soon closed his office and returned to Hartford. A letter sent to his Broadway office was returned by the post office bearing the stamp, "Not found." Poor Pike! Not found! And only a little while ago you were the "grand, gorgeous, stupendous, overpowering attraction" in the wildcat menagerie!

The Wireless Telegraph Scheme

    Pike's fame as a promoter must rest on his wireless telegraph exploit, toward the end of 1901. Early in that year, a clique of promoters in Philadelphia, headed by a real estate and gold mine boomer, Dr. G. P. Gehring, got hold of some old wireless patents taken out fifteen years before by Professor Dolbear of Tufts College. These patents had been almost forgotten. Their existence was recalled by the sudden rise to fame of young Marconi, and the incorporation of the American Wireless Telephone and Telegraph Company, capital $5,000,000 was the result, with Dr. Gehring president.
    The promoters lacked the courage and funds to buy whole pages of advertising, and for weeks and months the Sunday newspapers carried only a short announcement of the company's plans. The $10 stock was offered first at $1.50 a share, but gradually the price was raised to $8. Meanwhile, sub-companies were formed. The American was not an operating company. It owned the patents, and divided the country from coast to coast into fields in which the sub-companies were to operate. The sub-companies were the New England, Federal, Northwestern, Atlantic, Commercial, Central Western, Gulf, Continental and Pacific. Each sub-company turned a large proportion of its stock over to the parent company. The capital of the whole wireless outfit was $55,000,000. It was a bold scheme on paper, but it needed some one with courage and funds to develop it.
    The man for the New England Wireless Telephone and Telegraph Company was found in Thomas B. Bishop, who, as T. Brigham Bishop, was well known some years ago as the author of "Shoo Fly! Don't Bother Me!" But it was not as a song writer that T. Brigham Bishop became a leader in the world of finance. Bishop has the distinction of having opened the first bucket shop in New York for women gamblers. At the time of the collapse of the Dean "discretionary pool" swindle, Bishop was running a little "discretionary pool" of his own, and the post-office authorities did not overlook him while issuing fraud orders. Bishop got a figurehead president for the New England Wireless, the Hon. James N. Huston, former Treasurer of the United States. General Huston was already the head of another $5,000,000 company, one of the Beaumont oil boom wildcats. General Huston suffered financial reverses in the hard times of '93 to '96, and became the tool of parasite promoters. Bishop hawked his wireless stock through New England at bargain prices, selling it, at first, at ten cents a share. But nobody paid much attention to the new wireless companies until the autumn, when Pike, in the heyday of his oil company career, took hold of the Federal Wireless Telephone and Telegraph Company, a sub-company covering eleven Eastern States, and opened such an advertising campaign as had never before been seen in Wall Street. His figurehead president was the Hon. Ernest Cady, former Lieutenant-Governor of Connecticut, already vice-president of Pike's Eastern Consolidated Oil Company, and president, besides, of a wildcat gold mining company. Pike spread his circus-bill advertisements of the Federal Wireless through the Sunday newspapers, offering the stock first at forty cents, then at sixty cents, and finally at a dollar. He took whole pages in the New York newspapers, spending thousands of dollars a week, for many weeks. He set the pace for all the wireless telegraph company advertising since that time. Here are some of his best things:
Bait That Attracted the Fish

    "The most marvelous invention of the century."
    "Bell Telephone stock, when first offered, went begging at fifty cents a share, and those same shares to-day are worth $4,000."
    "Many predict that the stock will soon be selling for as many dollars as cents at the present time."
    "More remarkable than the late achievements of wireless telegraphy on the sea is the fact that the Federal Wireless Company has instruments nearing completion for operation between New York and Philadelphia, when it will receive messages at any hour of the day or night, at the rate of ten cents for ten words."
    "With the Bell Telephone stock in memory, which went from a few cents to thousands of dollars a share, thoughtful persons are buying up wireless stocks with avidity."
    "The career of the company controlling the basic patent in the richest field in America starts with a thousand times more flattering prospects than did the Bell Telephone."
    "Stock will soon advance in price by leaps and bounds."
    One feature of the Pike wireless advertising was that there was no promise of dividends. Much of the company advertising of the day was of the guaranteed-dividend variety--Pike, himself, had been the chief exponent of the monthly dividend scheme in his oil promotions. Pike, of course, saw that there was no possibility of earning dividends on his $5,000,000 capital, and that it was impossible to pay unearned dividends without getting caught. Pike made his whole play, therefore, on the similarity between the wireless telegraph and the telephone as an investment; and, instead of promising dividends, he talked only of the marvelous future of the company and the expected rise in the price of the stock. Extravagant as were his page advertisements in every line, still he was clever enough not to tie himself down to many positive predictions. As Sam Keller said, in testifying against his confederates in the Dean swindle, and speaking of Kellogg's get-rich-quick circulars, "no one would 'fall' to them as not being straight, but any one would 'fall' to them by sending along cash." Pike had elaborately furnished offices in the same luxurious office building in Broadway that housed the offices of the Steel Corporation, and there any doubting investor might see the Dolbear instruments at work. The cash flowed into Pike's offices in a steady stream. But the buyers of Pike's stock waited in vain for the opening of the commercial wireless line from New York to Philadelphia. Pike was too busy selling stock to bother about setting up instruments.

A Feat of Financial Juggling

    And now five years have gone by. Is the Federal Wireless receiving messages "at any hour of the day or night" for transmission through its territory? Has the stock "advanced by leaps and bounds?" What has been the experience of the "thoughtful persons" who bought Pike's stock and all the other wireless stocks, believing them to be a second Bell Telephone? For five years the wireless promoters have been juggling with the Dolbear stocks. The first stock certificates were scarcely dry, when the Consolidated Wireless Company, capital $25,000,000, was formed to take over the American, New England, Federal, Atlantic and Northwestern companies. The exchange was on a dollar-for-dollar basis, that is, an investor who had paid Pike from $40 to $100 for a hundred shares on Federal, received one hundred shares of dollar Consolidated stock in exchange. A few months later the Consolidated reduced its extravagantly inflated capital to $7,500,000, and the investor who had turned in $100 worth of Pike's Federal received $20 worth of new Consolidated. But the new Consolidated was only a transition. It was soon absorbed by the International Wireless Company, the holder of twenty one-dollar shares in the Consolidated getting two ten-dollar shares in the International. But this company, too, was only a transition. A little while later the American De Forest Wireless Telegraph Company came along and swallowed the whole Dolbear outfit, and this company, in consequence, has been in the throes of financial indigestion ever since. The De Forest Company gave its ten-dollar stock in exchange for the ten-dollar International stock, which had been metamorphosed from the $100 Pike wireless stock.

Pike's "Grand, Gorgeous" Mathematics

    Just what these De Forest shares are now worth is somewhat of a mystery. The De Forest home office is in St. Louis, and from this office notice was recently sent me that the price of the common stock had been advanced to $7.50. The manager of the New York office two weeks later denied that any De Forest stock was for sale at this price, and continued to offer it at $6. Meanwhile several brokers in New York and Philadelphia have been offering De Forest stock around eighty-five cents a share. When asked for an explanation of the astounding variation in the price of the stock, the company's New York office informed me: "We have never paid any attention to what the enemy or the cut-rate brokers may do with the few shares they may obtain from weak stockholders."
     Pity the poor, "weak stockholders!" By Pike's "grand, gorgeous, stupendous, overpowering" financial mathematics, we find that Federal Wireless (and all the other Dolbear stocks) "advanced by leaps and bounds" in this startling manner:
    $50 (real money) bought $50 worth of Pike's wireless, January, 1902;
    = $50 (certificate) watered Consolidated, February, 1902;
    = $10 (certificate) unwatered Consolidated, October, 1902;
    = $10 (certificate) International, February, 1903;
    = $10 (certificate) American De Forest, January, 1904;
    = $7.50 (company's money) subscription price of De Forest, St. Louis office, October, 1906;
    = $6 (company's money) subscription price of De Forest, New York office, October, 1906;
    = $0.85 (real money) cash market value.
    Meanwhile, I am in receipt of this appeal from the American De Forest promoters:
"There is not enough stock to go around. Consider the matter carefully. You have the opportunity. Will you grasp it 'at the flood tide' (now) and ride on to the shore of plenty, high and dry above the adversities which often beset old age, to the land of our dreams, where wealth is unbounded and every wish gratified, where comforts admit of enjoyment and wealth admits of opportunities for yourself and those you love? Or will you hesitate and doubt, and let the chance go by, to remain in senile dependency upon the bounty of others? Think! It is for you to decide! Think well! Buy! Do it now!"
[The remainder of this article reviewed an extensive list of mining and oil frauds]
May, 1907:
Fools and Their Money
EDITORIAL ANNOUNCEMENT
By Frank Fayant

    The story of the Wireless Telegraph bubble has grown while I have been writing it. I had intended to tell the story in this number of SUCCESS MAGAZINE, but it must be held over until the June Number. It is too big a story to put into print half told.
    Within the past few days, while digging around some obscure corners of the underworld of finance, I have unearthed such an illuminating record of financial jugglery in the promotion of wireless telegraph companies that all the "Fools and Their Money" articles that have gone before seem very dull reading.
    The chief figure in the story--could I paint him with the art of Mark Twain--would outrival Colonel Sellers. The colonel was only a creature of the novelist's imagination, but I have found a Colonel Sellers in flesh and blood.
    Many thousands of investors have put millions of dollars into wireless telegraph companies. A large part of this money is lost. In my story, I will tell what has become of it, and who is responsible for the loss.
stock ticker and bags of gold

June, 1907, pages 387-389, 450-451:
The Wireless Telegraph Bubble, By Frank Fayant, First Article, including image of magnet removing coins from pockets
This Is the First Article In the Second Series of "Fools and Their Money"
Wireless telegraphy is one of the most remarkable scientific achievements of modern times. That it will forever be of inestimable benefit to mankind is beyond question.
    The world owes a great debt to the many men of science in Europe and America who, through years of patient research, have made it possible to send electric messages many miles over the sea, from shore to ship, and from ship to shore.
    Nearly all the great ocean steamships that sail from New York are equipped with wireless apparatus, and they are in wireless touch with land stations or with other ships during the greater part of their voyage. With the advance of science, the time will come when every ship that sails the seas will be in daily communication with the land. But the prostitution of this great scientific discovery by parasite promoters with "millions-in-it" schemes of enriching themselves is a story of shame.
    Just as a good mine may be a bad investment, as I have shown in the "Fools and Their Money" articles that have gone before, so may a great invention be a bad investment. Wireless telegraphy has been a bad investment. Many millions of dollars of wireless stock have been printed by promoters, and this stock has been sold to investors by flagrantly dishonest methods. Millions of dollars of wireless stock manufactured in the past eight years is to-day worth no more than the paper on which it is printed. Over capitalization, mismanagement, and fraud have wasted millions of money.
    The most shameful chapter in the record of the prostitution of this great invention deals with the network of the De Forest companies promoted by Abraham White, a modern Colonel Sellers. This is the story I will tell in this article and the one that will follow.            FRANK FAYANT.
Abraham White EIGHT years ago this June, when all the world was talking about the remarkable achievement of the Italian boy, Guglielmo Marconi, in sending electric messages without wires, a boy from Iowa took his Ph. D. degree at Yale for special research in the phenomena of the Hertzian waves. His name was Lee De Forest. Marconi was then twenty-four; De Forest was two years older. Only by rigorous economy and self-sacrifice had the young American gained his university education, and, as soon as he won his coveted Ph. D., he went to Chicago to earn a living and a name for himself.
    In Chicago he found a position as a ten-dollar-a-week laboratory assistant, with Edwin H. Smythe, in the engineering department of the Western Electric Company. This company manufactures the apparatus for the Bell Telephone companies, and does a gross business of $70,000,000 a year. Smythe had been experimenting in wireless telegraphy, and the young Yale graduate entered eagerly into the work. Associated with Smythe in his investigation was Clarence F. Freeman, of the Armour Institute of Technology. Two years after De Forest went to Chicago the experimental apparatus worked so well that the inventors decided to take out patents and interest capital in the commercial exploitation of the invention. In July, 1901, seven weeks after the young Italian inventor had taken out his first American patents, there appeared in the "Western Electrician," the journal of the Western Electric Company, [see correction] a long illustrated article making public announcement of the result of the Chicago experiments. The Freeman "sending apparatus" and the De Forest-Smythe "responder" were pictured, and credit for the invention was given in the article in this manner:
The receiver of the new system is the joint invention of Lee De Forest, a graduate of Yale University, of the class of '96, Sheffield, and Edwin H. Smythe, of the engineering department of the Western Electric Company of Chicago. Mr. Smythe's ten years' work in the field of telephony has given him an experience that has proved especially valuable in dealing with the problem in hand, while, during his three years of graduate work at Yale, Mr. De Forest made a specialty of the subject of Hertzian waves, taking the degree of Ph. D. for work along that line. Readers of the Western Electrician will also be interested in knowing that for a time Mr. De Forest was connected with the editorial staff of this journal, resigning to prosecute work on this invention. The sending apparatus has been developed by Prof. Clarence E. Freeman, E.E., Associate Professor in Electrical Engineering at the Armour Institute of Technology.
    The three inventors, who had sent messages from the Chicago lake front to a yacht five miles off shore, and who were convinced that, with powerful apparatus, they would be able to transmit signals many times as far, saw the great commercial possibilities of the invention. Young Marconi had already made very successful experiments in wireless telegraphy in England, and was at that time in America continuing his work. Marconi had obtained strong financial backing in England, and was having no trouble in interesting American financiers in the commercial possibilities of wireless telegraphy. The Chicago inventors believed that if Marconi could raise capital they could do the same. So De Forest was sent to New York to raise capital and form a company. De Forest fell in with Henry B. Snyder, a promoter, who immediately saw "millions in it." He assured De Forest that he could raise all the money needed to float a company. He had no funds of his own, as De Forest soon discovered, but he could find some of his friends who would subscribe a few thousand dollars to get the company started. Snyder got five men to subscribe $500 each to the venture. One of these men was John Firth; another was William Newmarch Harte; a third was John Bergessen. When De Forest left his friends in Chicago, the idea had been to name the company the "Freeman-Smythe-De Forest Wireless Telegraph Company," and the three inventors were to be partners in the enterprise. But Snyder thought this name was too cumbersome. He proposed the name "Imperial." A compromise was made on the "Wireless Telegraph Company of America." This company was incorporated in New Jersey, with a nominal capital of $3,000, and the stock was divided among the promoters. This was the nucleus of the present $30,000,000 capital of De Forest companies, with which $25,000,000 of other companies have been merged, and many million dollars more have been planned. The $3,000 company took out the patents on the Freeman "sending apparatus" and the De Forest-Smythe "responders."

A Flight to Fame on Forty-four Cents

    The Marconi people were making rapid progress with their American promotion, and the De Forest promoters saw that they must make hay while the sun was shining. None of the five organizers of the Wireless Telegraph Company of America was rich, and so they set about to find a man with capital. Firth found the man. This was Abraham White, a young man who had come to New York from Texas, a few years before, and had risen to fame over night by cleaning up $100,000 on an investment of forty-four cents. White's family name was Schwartz. His brothers down in Texas still use the name, but when he started out in the world to make his own living he changed his name from Black to White. From the day he first set foot in New York, White's one ambition was to make a fortune. He had the money-making instinct. In his first years in New York he speculated in real estate. One of the stories he likes to tell of his early days in New York is how he became known as the "rock buyer," because of his propensity for trading in up-town building lots from which the rock had not been blasted away.
    When the Cleveland popular bond issue was made, in 1896, to replenish the Treasury gold reserve, White, who had lost in the panic years of 1893 and 1894 most of the money he had made in real estate, conceived the bold scheme of bidding for a big block of bonds, on the chance that they would sell at a premium as soon as the awards were made. The Government's call for bids did not ask for any money with the bids. White made several bids, amounting in all to $7,000,000, and sent them on to Washington by registered mail. His total outlay was forty-four cents. When the allotments were made, $1,500,000 bonds were set down to Abraham White, New York. The bonds were immediately quoted at a premium in the open market, and young White scurried around to find the money to pay the Government for his bonds. He went to Russell Sage, who was always ready to put his money into a sure thing, and had no trouble in getting the money lender to finance his bid. Sage paid the Government for the bonds, resold them in the market and turned over to White $100,000 profit. Ever since then White has thought in millions, and has been a gambler for big stakes.
    No sooner had White been told the story of the Chicago experiments, and the success that De Forest and his fellow inventors had had in sending messages without wires, than he began to build air castles for young De Forest. They would make fortunes out of wireless telegraphy, and the name of De Forest would go down in history among the great names of science.

The Air Castles of Wireless Telegraphy
De Forest Stock Certificate
    They--White and De Forest--would form companies all over the world, and issue millions of dollars of stock to sell to investors, and they, the promoters, with a big slice of these millions as their share in the venture, would exchange their paper stock certificates for the green and white paper hearing the Government's stamp. Their companies would erect wireless stations along the whole American seaboard, and every ship on the seas would pay them tribute. They would erect a string of land stations from coast to coast, and from the Isthmus of Panama to the snowcapped mountains of Alaska, and they would compete with the telegraph and telephone companies. They would form a parent American company, that would be a nucleus for a string of wireless companies around the world. Companies would be formed in Canada and England, on the Continent, in Africa, the Orient--in every corner of the earth, and all these subsidiary companies would pay tribute to the parent company. Investors would tumble over each other in their haste to put their funds into the venture. White built these air castles day and night before the dazzled eyes of young De Forest, and it is little wonder that the inventor, just out of college, soon forgot the friends he had left behind in Chicago.

Other Rivals That Entered the Field

    He let White style the first company the De Forest Wireless Telegraph Company. This was a $1,000,000 concern, incorporated in New Jersey late in the summer of 1901. Smythe and Freeman were neither directors nor shareholders in the company. De Forest threw them over. Freeman's "sending apparatus" did n't amount to much, anyway, said De Forest, and, as for Smythe, the "responder" was De Forest's invention more than his. And so the laboratory assistant of the Chicago engineers became the "scientific director" of the De Forest Wireless, and took all the inventors stock. The million dollars' worth of stock was divided among White, De Forest, and the other promoters who had contributed to the $3,000 Wireless Telegraph Company of America. How much of this stock was turned back into the treasury, to be sold for the benefit of the company, is a story that will never be told, but every now and then, in the record of the promotion of the De Forest companies since that time, I have found indisputable evidence that the promoters always had the big end of the game, while the company treasuries were starved along with only enough stock to keep up the appearance of things. One De Forest company after another offered its stock to investors, but the promoters were always in the market getting rid of all their promotion stock that they could exchange for the coin of the realm.
    Another rival to the Marconi company came into the field soon after White formed the De Forest company. A crowd of Philadelphia promoters, taking their cue from Marconi and De Forest, began putting out a string of wireless companies based on the almost forgotten patents of Professor Dolbear, of Tufts College. The parent company of the Philadelphia crowd was the American Wireless Telephone and Telegraph Company, of which Dr. Gustav Gehring was president. The Philadelphians organized a string of companies across the country, with a capital of $55,000,000, and one of these companies, the Federal, falling into the hands of the notorious promoter, Lafayette E. Pike, became the most widely advertised bonanza in the great promotion boom of 1901-02. I told in the January number of SUCCESS MAGAZINE the shameful story of the promotion of these wild-cat companies. Millions of dollars of their stock were sold by flagrantly dishonest methods. The Dolbear companies actually sent wireless messages, just as did the Marconi and De Forest companies, but they held out to investors the fraudulent promise that the stocks of their grossly over-capitalized ventures would multiply in value two thousand fold. The De Forest promoters, as well as the brokers engaged to sell the Marconi securities, painted the same alluring picture for their companies, and every wireless advertisement that appeared in the newspapers told how $100 invested in Bell Telephone stock had rolled into $200,000--and wireless stock was going to do the same.

Forcing Out the Original Promoters

    Wireless telegraphy was widely advertised in the yacht races for the "Americas" Cup that autumn. The Marconi instruments were installed on the Associated Press tug, while the Publishers' Press made use of the De Forest system. The Gehring crowd unsuccessfully tried to make a contract with one of the press associations, and then threatened to make both systems useless by setting up their own instruments. But the threat was not made good. Two years later, as I will relate, it was another story. The success of the Gehring crowd in selling reams of their wireless stock showed White that a $1,000,000 company was much too small. So in February, 1902, the $1,000,000 De Forest Wireless of New Jersey was taken over by the $3,000,000 De Forest Wireless of Maine. The Maine charter was probably taken out because it was cheaper. From that time on, the name of Abraham White--it was "A. White" in the prospectuses then--loomed larger and larger in the De Forest companies, and the original promoters of the little $3,000 company were forced out one after the other. The officers of the $3,000,000 company, were A. White, president; Lee De Forest, vice president and scientific director; H. E. Wise, treasurer; and Francis X. Butler, secretary. The other directors were Henry Doscher, a sugar refiner; John Firth, one of the original five; S. S. Bogart, an old Western Union man, and James Stewart. Bogart, Galbraith, and Butler are the only members of the old board still with White. With the cheerful optimism of Colonel Sellers, White began planning more companies. White's whole idea in forming new wireless companies was not to raise capital for the extension of wireless telegraphy, but to manufacture stock that he could sell to the public. Every additional million dollars' worth of wireless stock put out under the name of De Forest meant another fortune for White, if he could find enough credulous investors to buy his share of the promotion stock.

White's Achievements as Promoter and Press Agent

    The $3,000,000 De Forest Wireless had been in existence only nine months, when White took out a Maine charter for the $5,000,000 American De Forest Wireless Telegraph Company. White's scheme at that time was to make the De Forest Wireless the parent company, that would own stock in all subsequent De Forest companies, and receive big dividends (on paper) from these holdings. The relations of these two companies were described by White in this way:
"The De Forest Wireless Telegraph Company is incorporated with a capital stock of $3,000,000, divided into 300,000 shares of $10 par value. The company owns the patents of the De Forest system of wireless telegraphy. Under it the American De Forest Wireless Telegraph Company ($5,000,000 capital, $10 shares) has been organized as a sub-company, to conduct the commercial work in United States territory. A Canadian company ($2,500,000) has been organized similarly for that territory, and English, Russian, Spanish, and South American companies are in process of organization. In a reasonable time, fifty subsidiary companies throughout the world will be tributary to the parent company. The De Forest Wireless Telegraph Company owns $1,500,000 of the stock of the American De Forest Wireless Telegraph Company. The revenue of the company will consist of dividends on holdings in the subsidiary companies, yearly royalties on the patents, and profits on the sale of the wireless apparatus."
    A publicity campaign worthy of "Tody" Hamilton was engineered by White. He spared no effort and no expense to keep the newspapers talking about the De Forest system. The De Forest instruments did their work, and did it well, as was shown in the competitive tests with the Marconi instruments, when the Navy Department bought De Forest apparatus in preference to the Marconi. [See correction] White immediately heralded this news broadcast, and advertised the De Forest system as "the system adopted by the United States Government." The Marconi people, seeing that White was getting the best of them, brought suit for infringement of patents. For technical reasons, the Marconi people could not get a permanent injunction until three years later, and by that time the De Forest companies had devised apparatus more efficient than that brought on from Chicago by De Forest. White hired a press agent, and it was on the suggestion of the press agent that a suit for $1,000,000 damages was brought against the Marconi company. The suit was only brought to give the newspapers something to talk about. It was soon forgotten. The De Forest prospectuses, written under the direction of the imaginative White, were wonders to behold. Here is a table of estimated yearly earnings for the $3,000,000 De Forest Wireless:

The Bell Telephone Record an Effective Bait

    "Telegraphing from ships, minimum of fifty ships equipped with De Forest instruments, at $5,000 a year each, $250,000; messages from ship to shore and reverse, $250,000; transatlantic and transpacific messages, $4,000,000; interinsular communication, $500,000; total $5,000,000."
    But this was only part of the estimated income. "The successful tests of the De Forest system overland between the Naval Academy, Annapolis, Maryland, and the Navy Yard, at Washington, D. C., has demonstrated the feasibility of a general overland service, and it has been determined to erect stations throughout the country to provide the same class of service as that in which the two large telegraph companies are now engaged." The wireless mathematician estimated this business roughly at "several millions of dollars." Then he took up the cables. There were 1,769 cables with a total length of 189,000 miles, costing more than $300,000,000. The De Forest system would put them all out of business.
    No wonder that White recommended the De Forest stock to investors, as "the greatest investment of the age." "No stocks," said he, "will advance like the stock of the De Forest Wireless. It is as certain as arithmetic that great fortunes will be made out of this stock. It should now be purchased in just as large blocks as can possibly be handled, as there is no question whatever but that this stock, purchased at the present price, and held for a reasonable time, will make advances out of all proportion to its present selling price." Later on I will tell how it "advanced." That there might be no mistake on the part of investors as to the wonderful possibilities for De Forest Wireless, White dug down into the history of Bell Telephone stock. "When it is remembered," said he, "that the stock of the Bell Telephone originally sold for a dollar a share, and advanced to five thousand dollars a share, it is well to consider the facts as here related." The advance in Bell Telephone from a dollar to five thousand dollars has been told and retold over and over again by White. It was the favorite bait for the "suckers" in the literature of the notorious Pike. The Pike wireless stock was going to advance "by leaps and bounds." But the Pike stock turned a somersault, and so has White's.

A Transcontinental Wireless Telegraph Dream

    One of White's publicity ideas was a little newspaper called the "Wireless News." It was made up largely of reprints of De Forest wireless news from the leading newspapers. The "Wireless News," in April, 1903, reprinted a long "scare-head" article from the Chicago "Inter-Ocean," that said:
"Commercial wireless telegraphy, at a rate of one cent a word to the general public from Chicago to all principal points in the United States, will be an assured fact within ninety days, if the plans of the American De Forest Wireless Telegraph Company are carried out. Within sixty days it will be possible to flash messages from Chicago to steamers on the lakes, and to Detroit, Cleveland, Buffalo, New York, and the Atlantic seaboard. Almost as soon, we will be in wireless communication with St. Louis, Omaha, Kansas City, and Fort Worth. A statement that these things would be accomplished was given out yesterday at the Chicago office of the company by Abraham White, president of the corporation, and Dr. Lee De Forest, whose inventions are claimed to have been made before those of Signor Marconi."
    Then followed a characteristic Colonel Sellers interview with White, detailing the plans he had for installing the De Forest system all over the face of the earth. The one-cent-a-word rate would go into effect in New York within a few days, and would extend to other parts of the country as fast as the system was installed. Following the Chicago "Inter-Ocean" article was this bit of verse:
A little bird sat on a telegraph wire,
And said to his mate, "I declare!
If wireless telegraphy comes into vogue,
We'll all have to sit on the air."

How the Newcomers Made the Old Companies Look Ridiculous

    The rival wireless companies again came in conflict in the international yacht races of 1903, when Sir Thomas Lipton brought over his Shamrock II to "lift" the "America's" Cup. One of the press associations used the Marconi system, and another had the De Forest apparatus on its tug.
    The Gehring people, who had merged five of their companies in the $25,000,000 International Wireless Telegraph Company, failing in their effort to get the press associations to use their system, set up a very powerful station on the Navesink Highlands. Throughout the yacht races, they sent out so powerful a stream of electric disturbances in the ether that neither the Marconi nor the De Forest operators could get a word in edgewise. The International operators on the shore, when they tired of sending "A-A-A," and "B-B-B," amused themselves by calling the Marconi and De Forest operators bad names. Some of the etheric language sent out from Navesink Highlands during those races was not fit to print. The Marconi and De Forest people tore their hair, but the International promoters truthfully said that there was no law to prevent a man from sending all the wireless messages he desired out into the great unknown. White saw that wireless telegraphy would be a joke if the International promoters were not looked after, and so he conceived the plan of merging the $5,000,000 American De Forest with $7,500,000 International. The Consolidated, American, New England, Federal and Northwestern wireless companies, using the Dolbear apparatus, had, in the previous year, been merged in the Consolidated Wireless, with $25,000,000 capital. The Consolidated capital had been reduced to $7,500,000 by squeezing out a few millions of the water. Then, early in 1903, the Consolidated had become the International. To merge the De Forest and International companies, White formed the $15,000,000 American De Forest, and the 14,000 disgruntled stockholders in the Gehring company and the 3,000 hopeful stockholders in the De Forest were all made stockholders in the new American De Forest. Before the merger, White "cancelled" $500,000 of the International stock. He did not neglect the opportunity to offer the International stockholders the "right" to buy more stock in the new company at eight dollars a share. The $15,000,000 company had $11,500,000 of common stock and $3,500,000 of "seven per cent. cumulative and participating preferred stock." Later on when the company was sadly in need of money, White issued $500,000 of six per cent. twenty year bonds. De Forest & Marconi
    The "parent" De Forest Wireless company, the $3,000,000 company, suddenly ceased to occupy its "parental" position. White had the $15,000,000 company "rent" it for $500 a year. This financial feat, that White found as easy as rolling of a log, disturbed some of his fellow promoters, and one of them, Snyder, the first of the promoters with whom De Forest formed an alliance when he came to New York, asked for a receiver for the American De Forest Company. This suit dragged along in the courts for several years, and was finally patched up a short time ago. White ran things with such a high hand, after the merging of the De Forest and Gehring companies, that his fellow promoters tried to take the control away from him. White seized upon this opportunity to get more publicity, and so raised the cry of "conspiracy." Gehring tried to force White to bring the company's books into court. White retaliated on Gehring by bringing a suit for damages against him and the six other "conspirators." This conspiracy suit was another device of the press agent to get into the newspapers. The whole trouble between White and the seven "conspirators" was that they thought they were not getting their share of the "rake-off." This trouble was patched up, and White settled with the malcontents and forced them out of the company.
    In absolute control of the $15,000,000 company, and with no competitor but the Marconi, White went along swimmingly for a year or more. By making wild promises to investors as to what he was going to do with the De Forest system, he sold a great deal of stock, and used most of the money in publicity. He nearly bankrupted the company in erecting stations throughout the country, one of them at the Louisiana Purchase Exposition. Some of these stations were too remote from each other to send any messages at all, and many others were run at a loss. But they were great object lessons to investors, and were the means of selling more stock--and this was what White wanted. The De Forest system was used by the London "Times," in the war between Japan and Russia, and was adopted by many of the coastwise steamers. The De Forest system was really making much more progress in this country than the Marconi, despite the fact that it was very expensive progress for the company. White spent huge sums in advertising and in commissions to brokers who sold the stock. Although White confessed to some of his intimate friends that he did n't know how the company was ever going to make it pay, he told quite another story to investors. Here are some of the alluring promises be made:
    $100 put into this stock now for children will make them independently rich on reaching their majority.
    Stock in the De Forest company is as good a buy now as telephone stocks were in 1877 and 1878, and those who buy now for holding will receive returns little less than marvelous.
    Just as soon as the company is on a dividend basis, the common stock with the preferred should advance to figures practically without limit. This is a stock that should be purchased in just as large quantities as an investor can afford. If set aside for two years, it is morally certain to be in demand at 1000 per cent. or more over present prices.
    Tremendous developments are under way.
    A few hundred dollars invested now will make you independent for life.
    At that time White was selling the preferred stock at $10 a share, with an equal bonus of common stock. He also had a "special treasury" plan for selling this stock at $15 a share, with a "2-½ per cent. monthly distribution." Investors who could n't buy all of this stock they wanted for cash were allowed to buy it on the installment plan--$2 down and $2 a month. It was the "greatest opportunity of the twentieth century for enormous profits." The $15,000,000 company was only a few months old, when White wanted to print more stock. He announced in the newspapers that he was forming the Amalgamated Wireless Securities Company, capital $10,000,000. The scheme of the Amalgamated was "to relieve the American Company from the expense of extending its work in foreign parts, and, at the same time, contribute large amounts of money for its home work." Some of White's fellow promoters could n't see why he wanted to print $10,000,000 more stock immediately after organizing the $15,000,000 company, and they entered so vigorous a protest that White gave up his Amalgamated idea.
    But he went right on forming more companies. One of these was the Dominion De Forest Wireless Telegraph Company, Ltd., with a capital of $1,200,000. I want to tell a little story right here about the Dominion De Forest. A young man in Rochester, N. Y., bought thirty shares of this stock for $180 last August, through the Genesee Valley Securities Company. The shares were guaranteed by E. W. Humphrey, of Montreal, president of the company, to bear seven per cent. interest, payable quarterly, until the company could be on a profitable basis. The first quarterly interest payment was due in September. It was not paid. It was explained that Mr. Humphrey was "getting out a letter to send to the different shareholders, and that he would undoubtedly inclose the interest check at the same time." A letter did follow along from Montreal, sans check, giving the Rochester shareholder the privilege of buying more stock in a new company. This privilege did n't appeal to the Rochester man, who made repeated demands for his interest. Mr. Humphrey promised to send it. But he did n't. The second interest day was likewise ignored. The Rochester investor finally received a letter from Mr. Humphrey in January, in which the head of the Dominion company wrote:
    We desire to say to you that you are making a fool of yourself, as the stock you now hold is absolutely worthless, but we have given you the opportunity to make the exchange, and under no circumstances now will we accept your shares after the various letters we have received from you. We desire to say to you that, for the purpose of protecting shareholders of the Dominion De Forest Company, we have personally advanced over $50,000 to that company for the purpose of paying bills, etc., and we have stood between the company and its creditors for the benefit of its shareholders for just about as long as we desire. Now, you claim that you have certain certificates that bear interest. Possibly you have, and possibly you have not. The shares we represent are absolutely bona fide, and are not schemes to defraud, and we wish to inform you that the money you will lose in this transaction will be brought about by yourself, and you have no one to blame but yourself.
    The new company, the shares of which Mr. Humphrey wished to sell the Rochester investor instead of sending him his interest checks, is the Northern Commercial Telegraph Company, Ltd., with a capital of 750,000 ($3,750,000). The officers of this company are Lieutenant Colonel Sir Henry M. Pellatt, of Toronto, chairman; E. W. Humphrey, of Montreal, president; F. Orr Lewis, of Montreal, first vice president; S. H. Ewing, of Montreal, second vice president; D. M. Stewart, of Montreal, treasurer, S. Carsley and Charles Morton, of Montreal, and Lieutenant Colonel Robert Cartwright, of Ottawa, are also directors. From the "confidential preliminary prospectus" of the Northern Commercial Company, I learn that the company proposes to own 200,000 shares of the 240,000 shares of the Dominion De Forest Wireless Telegraph Company, Ltd., and 110,000 shares of the 150,000 shares of the Canadian Radio Telegraph Company, Ltd. The Canadian Radio is an offshoot of an English company, of which Lord Armstrong is the head, and which owns the wireless patents of Daldemar Poulsen. The Northern Commercial, in addition to sending Poulsen messages across the Atlantic, and De Forest messages up and down the Great Lakes, also intends to use the old-fashioned wire method to send telegraph and telephone messages to the uttermost parts of Canada. The Northern Commercial mathematician, although not as proficient in the art as White, does pretty well. Adding up all the various sources of revenue from wire and wireless services on the ocean, the lakes, and the land, the Canadian mathematical shark figures out that the Northern Commercial will earn forty per cent. on its capital.
    It was in 1904 that White went to England to float a De Forest company in the home of the South Sea Bubble, where Ernest Terah Hooley and Whittaker Wright had more recently practiced the gentle art of bubble blowing. The De Forest Wireless Telegraph syndicate was formed to operate in the British Isles, with no less a person than Lord Brassey as its chairman. Other well-known Englishmen on the board, dazzled by White's air castles, were Sir Hiram Maxim, Arthur Brand, M. P., Dr. Thomas Cochrane and Charles Bright C. E. In the preliminary prospectus, it was stated that 10,000 ($50,000), was to be paid to the "vendors," as the insiders are politely called in London. Later on this was raised to 40,000 ($200,000). The staid old English newspapers pricked up their ears, and began to ask impertinent questions, and the result was that Lord Brassey and his eminent associates withdrew from White's board. But it never bothers White to have a few directors get out. He can always find others. In place of Lord Brassey he got Lord Armstrong. One "lord" is as good as another in a company directorate. Only the other day White made this announcement concerning the English syndicate:
"The board of directors is headed by the Right Hon. Lord Armstrong, world-famous shipbuilder, and associated with him are Arthur M. Grenfell, of the firm of Chaplin, Milne, and Grenfell, bankers, J. Nevil Maskelyne, and --- Fras, inventor and electrical expert. The English Government has granted a license for the erection of De Forest stations in the British Isles, including a transatlantic station. In addition to commercial stations, orders have been received from the British Government for eleven stations, including three in India."
    It was announced, a short time ago, that the English syndicate had "closed a contract to pay 160,000 ($800,000) for the patents of the world, except the United States, of the Poulsen system, and that it agrees to find an additional 100,000 ($500,000) as working capital."
    So it appears that the English De Forest company has swallowed the Poulsen system, just as the American De Forest company several years ago swallowed the $25,000,000 worth of Pike wireless companies. Whether Lord Armstrong's company has paid this $800,000 in real money for the Poulsen patents I am unable to learn.
[To be continued in July.]


    As Mr. Fayant's article goes to press, we are informed that Abraham White has tendered his resignation as president, director, and member of the executive committee of the United Wireless Telegraph Company. Mr. White continues to act as president of the American De Forest Wireless Telegraph Company, and retains his full interest in the Atlantic De Forest Wireless Telegraph Company, the company that has control of the De Forest Marine Service on the Atlantic Coast. This company, which is about the only profitable business that is now being conducted by the De Forest companies, is capitalized at only $1,000,000, and nearly all the securities of the company are held by Mr. White and his associates. The public has never been offered an opportunity to join this venture.
July, 1907, pages 481-483, 508-509:
The Wireless Telegraph Bubble, By Frank Fayant, Second Installment, this time image is of radio signals removing coins
The President of the De Forest Company and His Extraordinary Career--One Air Castle That Became a Magnificent Reality--The Daring Financial Schemes Planned Within Its Walls--How Wireless Stock Trading Was Finally Made a Monumental Farce
ABRAHAM WHITE, the chief promoter of the De Forest companies, is a stock market plunger. More than once he has run a shoestring into a fortune. Last August, when Mr. Harriman startled Wall Street by putting Southern Pacific on a five per cent. dividend basis, and raising the Union Pacific rate from six to ten per cent., White was plunging on the bull side of the market in a Broadway brokerage house. He began buying Union Pacific at $140, and "pyramided" as the price advanced. The night before the announcement of the Harriman dividends, when Union Pacific was selling around $161, White was long of a big line of the stock, the most of it bought on his paper profits. The next day Union Pacific soared to $177, and not many days later it was selling at $195. In the parlance of the Street, White made a "killing." He says that he made $2,000,000, but $200,000 would probably be nearer the real figure. He made enough money, at any rate, to put him on Easy Street for a while and to start him building more air castles. One of these air castles became a reality. White heard that the famous John A. McCall country mansion at Long Branch, N. J., could be bought at a bargain. He drew down a big share of his Union Pacific profits and bought the magnificent country seat. Here is White's own authorized version of that deal:
    "Hardly had Wall Street recovered from the news of his great success in gathering in about $2,000,000 in an afternoon, before Mr. White had unwittingly stepped into the limelight again. He purchased the magnificent mansion erected at Long Branch for the late John A. McCall, when he was president of the New York Life Insurance Company. This great palace, which presents a most attractive and harmonious assemblage of lines from whatever point it is viewed, is said to have cost, including its furnishings, about $830,000. What Mr. White paid for it is not known. 'Something under $500,000,' was the announcement made after the sale.

The Purchase of the McCall House
Mansion hall
    "Again Mr. White's luck was with him. Other wealthy and sagacious men had become elevated to the millionaire ranks the same afternoon the ticker raised him among plutocrats. They, too, had had their eyes on the McCall house, waiting only for a lucky stroke in the market to enable them to make the purchase. But Mr. White, as usual, was early on the ground. On Sunday, week before, he and Mrs. White drove to Long Branch and inspected the great pile and its fifty-eight acres of elegant grounds, its own fire department, etc., and were pleasantly impressed with the place. So, when fortune was within his grasp, he closed the bargain for the place at once.
    "Then the telephone bell in his office began to give him trouble. The other new millionaires who were ready to buy the Long Branch palace discovered they had been forestalled. But they were generous. How much would Mr. White take for his bargain? They offered $10,000, $20,000, even $50,000 bonus within an hour after he had made the purchase. He advised his secretary: 'I won't sell. Tell them $100,000 bonus will not do; if you think they are willing to give that, tell them $200,000 more will not do. I will not sell.'

Made the Ticker Pay the Bills

    "In going through the house the previous Sunday, Mrs. White was particularly fascinated with the magnificent music room. She is considered a fine musician, and is the possessor of an exquisite voice. 'Cora,' remarked Mr. White to his wife jokingly, 'how would you like to have this room to sing in?' She replied that she would be charmed with it. 'Well,' added her husband, 'if my Union Pacific deal comes out all right, I will buy the place for you.' So he bought the immense house, furnishings complete. Yet, when Mrs. White went to it as its mistress, she discovered that some things were needed, especially silverware, china, and linen. About $5,000 would be needed for the purchases.
    "Mr. White concluded to feel the pulse of the tape again. He had $5,000, certainly--many times $5,000--but he has faith in being able to make the ticker pay his bills. So he went to his brokers, He looked at the tape a few minutes. Great Northern preferred came on the ticker at 305. Remarking, 'That looks cheap,' he turned to the managing clerk, who remarked he had three hundred shares at that figure. 'I'll take you; and buy me two hundred more at the same price and get me five hundred Northern Pacific at $210 or better.' He continued to buy until he had five hundred of Northern Pacific and five hundred shares of Great Northern preferred. The next day Mrs. White called at his office ready to go out shopping. Mr. White asked her to wait a few minutes until he went to his brokers. There he closed out his shares in a few minutes at a profit of $12,500."
A Rendezvous for Dreamers

    With this little spending money Mrs. White was enabled to buy the "silverware, china, and linens" needed for the country mansion. Another little incident in Mr. White's stock market career is told by his authority in this fashion:
    "He lunched with a member of the brokers' firms with which he had been dealing, and, as he could keep in close touch with the ticker at the same time, he laughingly exclaimed to his host, 'Billy, I 'll give you an order to buy something every minute we are at the table.' He really was joking, but he actually did it. At the end of the meal, which had lasted fifty-eight minutes, he had bought an aggregate of 58,000 shares of various stocks--Union Pacific, Southern Pacific, Amalgamated Copper and Pennsylvania among others. His speculations carried on during his luncheon had netted him a profit of about $25,000. Is it any wonder he subsequently remarked he had had a pleasant luncheon?"
    White installed himself amid the luxurious surroundings of the famous McCall mansion, and it at once became the rendezvous for "millions-in-it" dreamers. Men with lean pocketbooks and fat imaginations, picked up by White in the highways and byways of the metropolis, spent week-ends at "White Park" and dreamed of $100,000,000 companies that were to spring up in the great marts of the world. Ambitious but unknown inventors, scientists, attorneys, speculators, miners, and near-capitalists gathered nightly in the great foyer hall of the McCall mansion, sipped their host's good wines and dreamed great dreams. It was at one of these Arabian Nights' entertainments that White conceived the idea of merging all the wireless telegraph companies in the world in one grand, glorious, glittering aggregation. The De Forest and Marconi companies had been engaged for years in costly patent litigation, and each promoting crowd had been calling the other names, and claiming that it had the only simon pure wireless telegraph monopoly. The idea looked so big to White, that, without making any overtures to the "enemy" (the Marconi people), he announced in the newspapers one Sunday morning in November the formation of the United Wireless Telegraph Company, capital $20,000,000, "organized for the purpose of uniting the American and foreign systems of wireless telegraphy, including the Marconi and American De Forest systems, as well as acquiring the latest and most approved methods and inventions employed in the art of wireless telegraphy, and continuing its development and expansion throughout the world on the broad and comprehensive scale which the enterprise merits."

A Merger That Was One-Sided

    The directors included Mr. White and his satellites, together with a member of a well known New York Stock Exchange firm and a prominent Pittsburg banker. These two men were in the board just twenty-four hours. The moment White displayed their names in his half-page advertising, a stream of incredulous inquiries poured in on them from their friends. They withdrew with as good grace as possible.
    An angry protest immediately arose from the leading Marconi promoters on both sides of the Atlantic, and even Marconi himself cabled from Italy that it was all Greek to him. Former Governor John W. Griggs of New Jersey, president of the Marconi Wireless Telegraph Company of America, emphatically denied that any merger of the Marconi and De Forest companies had been even thought of, and he characterized White's "merger" as "antagonistic and repugnant to the Marconi companies." But these denials from the "enemy" did n't bother White. He went right on "merging." He did capture one of the Marconi directors, who has since been forced out of the Marconi board, and he took possession of a notorious firm of brokers in Broadway, who for several years had been hawking Marconi shares around the country at fictitious prices. This was the firm of Reall and Company, formerly F. P. Ward and Company. The full-page advertising put out by this stock selling crowd to entice investors to pay fictitious prices for Marconi shares was even more fanciful than the De Forest advertising. It resembled rather closely the circus poster advertising that flooded the Sunday newspapers in the heyday of Lafayette E. Pike's career as a wireless promoter. The Marconi promoters said they did n't like it and did n't approve of it, and offered a reward to any one who would show them how to put a stop to it, but, so far as I have been able to learn, the Marconi people never made very strenuous efforts to put the brakes on F. P. Ward and Company, or their successors, Reall and Company.

Investors Paid Their Own Dividends

    Reall and Company, last winter, offered me American Marconi stock, that could be bought in the open market around $35 a share, for $115 a share. They also offered to sell me the same stock at $140, with five years' guaranteed interest at five per cent. My correspondence shows that they sold a great deal of this "guaranteed" stock. Any schoolboy, with a knowledge of addition and subtraction, can readily see how Reall and Company could sell Marconi stock at $140 a share, deposit $25 of this amount with a surety company to be repaid to the investor in five yearly installments of five dollars, and then take $35 of the remaining $115 and buy a share of Marconi in the open market to be delivered to the investor. The remaining $80, less advertising and office expenses, would represent a very handsome profit on the deal--to Reall and Company. No broker could be sent to jail for turning an honest penny in this way. A man has the right to get as high a price for an article as he can, providing he can find the victim to pay him the price.
    Reall and Company, while they were letting investors into this "good thing," published a promotion newspaper under the title of the "Marconi Wireless News." When White, in conjunction with Reall and Company, formed the United Wireless Telegraph Company, he made Reall and Company his selling agents, and they continued to publish the "Marconi Wireless News" as a publicity organ for White. The first issue under White's direction carried a large portrait of White, the story of his career by a friendly biographer, and a glowing history of wireless telegraphy over White's signature. Then there followed a detailed record of the De Forest companies, with some little incidental mention of the Marconi companies. Reall and Company, who had so generously sold American Marconi stock at three or four times its market price, offered to exchange United Wireless for Marconi. For one share of Marconi and $35 in cash--the cash is never forgotten in these offerings--Reall and Company offered to give twenty shares of United Wireless. For twenty shares of Canadian Marconi and $35 in cash, they also offered to give twenty shares of United Wireless. Reall and Company ceased to advertise the Marconi shares and devoted their publicity to United Wireless, picturing the new wireless stock as one that would increase two thousandfold in value. To make this wonderful picture clear to the most unintelligent, they got an artist to draw a picture of a heap of two thousand gold dollars, which, by some magic, was supposed to grow of a single gold dollar.

To Bring Order Out of Chaos

    But, since the publication of this story of the wireless telegraph bubble was announced in SUCCESS MAGAZINE, the De Forest promoters and these generous bankers have parted company. The wonderful advertisement, picturing the heap of two thousand gold dollars, no longer appears in the Sunday papers. A Westerner, with western ideas of common honesty, some months ago acquired a very large interest in American De Forest, and he has been trying to bring order out of chaos. He refused to allow the bankers to go ahead with their circus poster advertising, and White himself concluded that the advertising was too farfetched for even a wireless telegraph promotion. And so Reall and Company were cut off.
    In the meantime, some plan had to be formulated for the exchange of United Wireless for American De Forest stock. This was a problem. Many of the stockholders had paid anywhere from $4 to $10 for their De Forest common; many more had bought stock for a few cents a share. The promoters could n't see their way clear to taking all this stock on the same basis. The stock sold at high prices included heavy advertising expenses and agents' commissions; the stock sold at low prices did not include these large items.
    Some months ago, while investigating the peculiar methods employed by the De Forest promoters in selling wireless stock to the public, I wrote to the general office of the company in St. Louis, to the New York office, and to several New York brokers, asking for quotations on American De Forest common. From the St. Louis office I received an alluring prospectus, in which the stock was quoted at $7.50 a share, and nine reasons were given me why I should put my money into the stock at once. One reason was this:
    "Because a few hundred dollars invested in this stock now and given to your children should make them independent for life, or should provide most handsomely for your own future."
    Just what Mr. White would consider a "handsome provision" for my future I am unable to say, but even a very modest provision arising from an investment of "a few hundred dollars" would mean a dividend return of several hundred per cent. a year. As the great railways and industrial companies of the country have difficulty in returning even six per cent. on their capital, an investment returning several hundred per cent. is worth looking into. Near the close of this prospectus I learned that there was "very little stock left-not enough to go around." The closing advice to me was:
Prices to Suit All Purses

    "Consider the matter carefully. You have the opportunity. Will you grasp it at the flood tide (now) and ride on to the shore of plenty, high and dry above the adversities which often beset old age, to the land of our dreams, where wealth is unbounded and every wish gratified, where comfort admits of enjoyment, and wealth admits of opportunities for yourself and those you love? Or will you hesitate and doubt, and let the chance go by, to remain in senile dependency upon the bounty of others? Think! It is for you to decide. Think well! Buy! Do it now!"
    While I was thinking over this golden opportunity, I received a letter from the New York office of the company offering the same stock for $6 a share. Meanwhile, I was, in receipt of offers from various brokers to sell me the stock for 90 cents, 85 cents, and 80 cents a share. I again wrote to the New York office asking why there was a difference of $1.50 between the company quotations in New York and St. Louis. A telegram came back stating that $6 was the only official price for the stock. A day or two later I received a letter from the Greater New York Security Company, stating that the New York office had no authority to offer the stock at less than $7.50. I then timidly asked for an answer to the riddle of the 80 cent stock offered by brokers. "We have never paid any attention to what the enemy or the cut-rate brokers may do with the few shares they may obtain from weak stockholders," the company answered. "We have received a great many complaining letters from persons who have invested their money with brokers and afterwards have been unable to obtain delivery of the certificates, and it is a source of deep regret to us that some people have suffered a loss in this way, and we wish to warn you in time."
    Not long after, brokers offered me the stock at 75 cents. Knowing as much as I did at the time about the hippodrome methods of selling wireless stock, I still doubted that the stock offered me by brokers at 75 cents was the same that Mr. White was trying to sell me at $7.50. If I could get several hundred per cent. on my money at $7.50 a share, I could get several thousand per cent. by buying stock at 75 cents. Some weeks later, I gave an order to a broker of standing to buy me ten shares of American De Forest common. He got the stock for 30 cents a share, sent the certificate to the Greater New York Security Company and had it regularly transferred to my name.

Profitable While It Lasted

    A little while later, the same broker sent word to me that I could buy all I wanted for 15 cents a share. That is, in the open market I could buy fifty times as much stock as Mr. White would sell me for the same amount of money.
    While the De Forest promoters were openly selling stock for a few cents a share in New York last winter, Mr. White and his agents all over the country were throwing dust in the eyes of investors and selling them the same stock anywhere from $4 to $7.50 a share. Stock agents in the West took orders for the stock at $4, and then filled their orders by buying the stock in the New York market for a few cents. This was a very profitable business while it lasted, and it probably would be going on to-day but for the warning given in the January article of the "Fools and Their Money" series, in SUCCESS MAGAZINE. One firm of selling agents alone made $250,000 in selling De Forest stock.
    The sales at fictitious prices were very large in the West. An investor from one of the Western States came to New York last winter to pick up some cheap De Forest stock. He appeared one day in the office of a broker in lower Broadway and asked for a quotation on the stock. "What can I get a thousand shares for?" asked the Westerner. "Oh, about 30 cents a share," replied the broker. The Westerner gasped. "You must mean another stock," said he; "I'm speaking of American De Forest Wireless." The broker took some stock certificates out of a pigeonhole and exhibited them to the investor. The Westerner drew out of his inside pocket a certificate for one thousand shares of De Forest and compared it with the certificates the broker had. They were all off the same printing press. "I paid $4 a share for this--$4,000 for the lot!" exclaimed the Westerner. "Do you mean to tell me that I can buy the same amount of stock in the market here for $300?"

"Greater Than the Telephone"

    The broker said he could, and he might get it cheaper. The Westerner's $4,000 worth of stock a few days later had a market value of $150, and he very wisely concluded that he would n't send any more good money after bad. His experience is like that of thousands of other investors all over the country who have bought wireless stock at fictitious prices, only to enrich the wireless promoters and their unscrupulous stock selling agents. In advertising for agents the other day, the De Forest people said:
    "The stock is selling readily, and men of ability can easily earn from one hundred dollars to five hundred dollars a week. This is a rare opportunity to become identified with an enterprise that will reflect both credit and profit upon all who are connected with it. The company is now earning money every day and every hour, and is a greater monopoly than the Bell Telephone."
    In order to cover up the sins of the past, the United Wireless promoters have evolved a fearful and wonderful plan of exchange of stock. In the whole history of finance I have been unable to discover anything like it. Our American code of financial morals has recently been under rigorous investigation, and some doubtful practices have been uncovered, but never before, to my knowledge, have the promoters of a $15,000,000 company attempted arbitrarily to fix various values for the same stock. The financial management of the Union Pacific Railroad has recently been severely censured, but the searching investigation of the Government has failed to show in the minutest particular that one share of Union Pacific was not as valuable as any other share, no matter when nor where bought, nor at what price.

The Merger Did Not Help

    Those who believed in the future of the Union Pacific property ten years ago, when the financial outlook was dark, and who put their money into the stock at $20 a share, are on an equal footing with present day investors, who have tardily recognized the value of the property and have paid anywhere from $100 to $190 a share for the stock. The courageous New Englanders who bought the shares of the Calumet and Hecla mine a few years ago for $10 or less are on an equal footing with those who now pay $800 a share for the same stock.
    But this is not the case with the American De Forest. Investors in wireless stock who picked it up for a few cents a share are no better off in the United Wireless merger than those who paid several dollars for the same stock. The circular giving the details of the plan for exchanging United Wireless for American De Forest makes this offer:
    "For every dollar paid by you for De Forest preferred or common stock, there will be issued $1.10 worth of United Wireless Telegraph Company's preferred stock, plus 5 per cent. thereon for every year the stock has been held by you for over one year. To the holders of bonds who desire to exchange for preferred stock, we will exchange by allowing 20 per cent. on the par value of the bonds, and the holder will be allowed to retain his bonus stock. To the holders of bonus, cut rate, or brokers' stock, we will exchange at the rate of one share of United for six of American De Forest. This applies to either preferred or common stock purchased prior to January 1, 1907. All stock exchanged must be held in escrow in bank or trust company for two years."
    As the De Forest stock is intrinsically almost worthless to-day, it probably matters little to its holders on what basis they exchange it for more wireless stock. The stock that the promoters were selling last year, with the alluring promise that it would return hundreds and thousands of per cent. a year dividends, can now be exchanged for a new stock that the promoters themselves are not very certain will return any dividends at all. The bondholders are in a sorry plight. They had a first lean on the assets of the American De Forest Company. Now they have an opportunity to exchange their bonds at a discount of eighty per cent., for part of a $10,000,000 stock issue. These bonds, the total issue of which was $500,000, were brought out late in 1904, when the company was sadly in need of funds, and could not raise any more money by the sale of stock. The bonds were brought out in a peculiar manner. White, as president of the American De Forest, executed a trust deed to White as president of the Greater New York Security Company. About $270,000 of these bonds were sold, many of them going to investors in the West, and the remainder to American De Forest stockholders in New York, Atlanta, and other Eastern cities. They bear interest at the rate of six per cent. The quarterly coupons were honored until last December. Since then the interest on the bonds had not been paid. The bondholders, if they have any faith in the future of their company, can exercise their rights as creditors of the company and put it in the hands of a receiver. They certainly ought to have as good a chance of getting a run for their money this way as they will have by selling their bonds for United Wireless stock at a discount of eighty per cent.
    These American De Forest bonds were the direct result of White's extravagant management of the company in 1904. At the beginning of the year White made a contract with the London "Times" to install the De Forest apparatus on a newspaper despatch boat to report the naval engagements in the war that was about to open between Russia and Japan. White profited by his early advices from the Far East to make a turn in the grain and stock markets. His profitable speculation enabled him to go ahead booming wireless stock. He put a good share of his market profits into the De Forest company, spending money lavishly in publicity and in the erection of useless stations. White himself says that he spent $465,000 that year in exploiting the company. One of the most extravagant things he did was to spend $150,000 in publicity at the St. Louis Exposition. A big tower was erected on the grounds, and messages were flashed to stations in various parts of St. Louis. White thought that this expensive object lesson would result in large sales of the company's stock, but it did n't. The $150,000 St. Louis station was almost a complete loss.
    A big share of the receipts from the sale of American De Forest stock had been spent in the erection of useless wireless stations. These stations had been erected almost solely for the purpose of promoting the sale of stock. A station was installed in Atlanta, Georgia, that connected with nowhere. The station was erected because Atlanta investors were nibbling at wireless stock, and White saw that there was a chance to sell a good big block by the right kind of advertising. I am told that $3,000 expended in the erection of this useless station at Atlanta resulted in the sale of about $50,000 worth of stock. After the stock had been sold there was no more use for the station, and one day a firm that had supplied some of the materials for the station came along and seized it for the debt. The Atlanta investors now want to know what has become of their money.
    Another favorite publicity scheme employed by White and De Forest has been to promise the early transmission of wireless messages across the oceans and across the continent. As far back as January, 1903, De Forest sent a message to President Roosevelt promising that he would be sending wireless despatches to Manila, via. Hawaii "within eighteen months." That was only a dream. In 1904, when American De Forest stock was offered to investors as "an alluring proposition," White's brokers made this announcement:
"The following wireless circuits have been opened for business--Chicago and Springfield, Springfield and St. Louis, St. Louis and Kansas City, and Buffalo and Cleveland; apparatus is now being made ready for a complete line of stations connecting New York and San Francisco, and we are informed that wireless communications between these two points will be established within the next eight months."
    This was also a dream. Only last November, when White was still counting the big profits of his lucky speculation in the stock market, he was "planning to effect instantaneous communication from the Pacific Coast to China in the near future." This was another dream.
    But the biggest dream that White and De Forest had in connection with the long distance transmission of wireless messages was a little more than a year ago. White devoted $500 worth of advertising space in one of the New York Sunday newspapers of April 8, 1906, to a big type announcement that the American De Forest Company was busily engaged in sending messages all the way across the Atlantic. The Marconi promoters, some time previously, had induced President Roosevelt to write a transatlantic wireless message to King Edward. It read in this wise: "To his Majesty, King Edward VII., London. In taking advantage of the wonderful triumph of scientific research and ingenuity which has been achieved in perfecting the system of wireless telegraphy, I express on behalf of the American people the most cordial greetings and good wishes to you and all the people of the British Empire." The Marconi people say that they sent this message, and we must take their word for it. Still, it seems rather strange to the layman that the Marconi people stopped with this one message. White did not intend to be beaten by the Marconi people. So he sent De Forest to Glengariff Harbor, County Cork, Ireland, to receive a transatlantic message from the De Forest Manhattan Beach station. White wrote an 800-word dispatch telling the whole history of wireless telegraphy, and printed it in the newspapers, along with a message from De Forest stating that the "aërogram" had been received in County Cork. "The application of man's genius and the utilization of God's natural forces represent a truly wonderful combination," aërographed White to De Forest; "this marvelous achievement recalls to mind that historic telegraph message sent over the Morse cable many years ago, 'What hath God wrought!'" It would be unkind to suggest that the 800-word history of wireless telegraphy, which White says he sent through the ether to Glengariff Harbor, was in De Forest's pocket before he set sail for Ireland. This great achievement in aërography was recorded more than a year ago. Since then nothing has been heard of the art in connection with the De Forest companies, and it may be that transatlantic aërography is one of the lost arts. It certainly does seem strange to a layman that after sending an 800-word message across the Atlantic nothing more was heard of transatlantic messages. The cable companies still continue to do business, and the owners of cable securities do not seem to be lying awake nights worrying over aërograms.
    While the De Forest people are not sending messages across the Atlantic, or across the continent, or across the Pacific, they are doing some commercial business. But this business is of infinitesimal proportion to the capitalization of the De Forest companies. Instead of sending messages 3,000 miles across the Atlantic at ten cents a word, the De Forest people are doing a little coastwise business within a limit of 300 miles at a charge of fifteen cents a word or more. But this business is all handled by the Atlantic De Forest Wireless, a sub-company that is White's personal property. This company is capitalized only at $1,000,000, and the public has never had the opportunity of subscribing to its stock. It delivers messages to steamers plying up and down the Atlantic coast. I had occasion myself the other day to send a wireless message by the Atlantic De Forest to the Ward liner "Merida" a day after she left New York for Mexico. But no attempt was made to send the message directly from New York to the ship. The message was first telegraphed to Cape Hatteras, and from there was flashed over to the "Merida." Some effort has been made to do a land wireless business, especially in Texas, but the land stations have been unable to compete with the regular telegraph lines, and White himself tells his friends that land wireless can never be profitable until hundreds of stations have been established all over the country. Another dream that White had mid the splendors of the McCall mansion was the Bonanza Gold Syndicate. A week after his announcement of the United Wireless Telegraph Company, he devoted much valuable space in the leading newspapers of the country to an appeal to investors for $3,000,000 of capital to exploit "colossal gold deposits in gold-bearing sands and gravel in the rivers and in many square miles adjacent in an accessible country, showing such enormously rich wealth that the development of this apparently mother lode of golden riches would startle the world as no other great find in mining has done." Mr. White would n't tell where these colossal deposits were located, but he promised to let the secret out after he had sold the $3,000,000 of stock. He did, however, devote a great deal of space to telling what a wonderful financier he was. Mr. White described himself as "a man who has won conspicuous success in notable financial operations covering a period of many years past, and who is one of the best known financiers in the country." He also made bold to say that his operations were "the sort to follow," and that he was "the kind of man to go with in making investments." He was going to issue $2,000,000 "to provide for the purchase price, plants required, expenses and development of what were already indicated to be the most colossal gold deposits ever discovered anywhere on earth." But finally, when White brought out his Bonanza Gold Syndicate, the public appetite for mining investments had been satiated, and there was no instant response to his appeal. Not long after, White discovered that the "colossal gold deposits" were a myth, and it is a pleasure to record that he sent the money back to subscribers.
·        ·
A Correction

MARCONI WIRELESS TELEGRAPH COMPANY OF AMERICA,
Lords Court Building, 27 William Street,            
NEW YORK, May 27, 1907,                   
FRANK FAYANT, ESQ., The Success Company, N. Y. City:
    Dear Sir:--I have read your admirable article published in SUCCESS MAGAZINE for June, and to only one matter would I take exception, viz.: that you state "the De Forest instruments did their work and did it well, as was shown in the competitive tests with the Marconi instruments." This company entered into no competitive work whatsoever and it does not approve of such tests. In lieu thereof we offered to show the Government our actual working on a commercial basis.
    As the above statement is rather misleading, if you can correct it I shall feel much obliged. Yours very truly,
MARCONI WIRELESS TELEGRAPH COMPANY OF AMERICA,
By I. Bottomley, Vice-President.            

August, 1907, Page 545:
*          *
A  Correction
In the June issue of Success Magazine, Frank Fayant, in his article, "The Wireless Telegraph Bubble," spoke of the "Western Electrician" as "the journal of the Western Electric Company." W. A. Kreidler, the president of the "Western Electrician," writes us to deny this statement. An inadvertent injustice having been done him and his paper, we take pleasure in retracting the statement.
*          *
It  Drove  Him  Out
Deming, N. M., June 28, 1907.    
Editor, SUCCESS MAGAZINE,
    Dear Sir:--The June Number, with Mr. Fayant's article, "The Wireless Telegraph Bubble," reached Deming most opportunely.
    The gentleman whose card is inclosed had been in town for several days in behalf of his company. He had sowed a good deal of seed, and, confident of a good crop, left for Silver City to plant another crop. In the meanwhile, Success Magazine arrived. The copies were eagerly read. The gentleman returned, but the harvest could not have been up to expectations, for he did not tarry long. The mention of SUCCESS MAGAZINE was enough to cause him to shut off the hot air, fold up his books and pamphlets, and, like the Arabs, silently steal away.
H. D. G.    

January, 1908, page 8:
A  Correction
THE following communication, signed by Mr. C. C. Wilson, president, and Mr. S. S. Bogart, treasurer, of the United Wireless Telegraph Company, of 42 Broadway, New York City, we gladly give space to here. It will set aright any wrong impression that may have been given in Mr. Frank Fayant's articles entitled, "The Wireless Telegraph Bubble."

Editor, Success Magazine, Sir:--
    In the June and July numbers of the Success Magazine, articles appeared on wireless telegraphy written, as we understand, by Mr. Frank Fayant.
    In both articles he refers to the Atlantic DeForest Wireless Telegraph Company as a subsidiary to the American DeForest, and as the only part of the DeForest System that was producing a revenue and that said subsidiary company was owned and controlled by Mr. Abraham White. Mr. Fayant was advised that this statement was incorrect and misleading and was damaging to the United Wireless Telegraph Company, as that Company owned and operated the so-called Atlantic DeForest Wireless Telegraph Company as the Marine Department of the United Wireless Telegraph Company, having in its treasury 99,883 shares out of a capitalization of 100,000 shares. The remaining shares are owned by Directors and the Treasurer of the Atlantic DeForest Wireless Telegraph Company. Mr. White at no time owned over five shares of the stock of said Company. We believe injustice to us that this statement should be given prominence in your Magazine, to relieve the erroneous impression created by the articles above referred to.
Yours very truly,                           
UNITED WIRELESS TELEGRAPH COMPANY.