This article states that the eastern operations of the Telephone Herald affiliates had been consolidated into the "Atlantic Telephone Herald Company", but, unlike the Pacific company, there is no evidence that an Atlantic company was ever organized.
Sacramento Bee, March 6, 1915, pages 1, 29:
STOCK BUYERS FEAR THEY ARE STUNG
Buyers in Central California Telephone Herald Co. See Little Chance of Promises Fulfilled
Stockholders in what was the Central California Telephone Herald Company, before it became a part of the Oakland Telephone Herald Company, through the "merging" or "melting" process, are wondering what has become of the big dividends promised, where the Telephone Herald contrivances are operating, and what has become of the dollars and gold pieces they invested.
Inquiries are being made along these lines, and many people in Superior California now believe they were "stung," according to statements made within the last several days.
Concern Is Inactive.
The concern which swallowed the Central California Telephone Herald Company now is in what might be called a somnolent state. According to S. H. Whisner, who was President of the company, which was absorbed, and F. M. Bresee, Secretary, it is doing nothing, selling no stock, building no plants for the operation of the patent and has no definite plan when any of these things will be undertaken.
A total of $75,000 worth of stock was handled in Sacramento and Superior California by the promoters and the stock salesmen, following the appearance in Sacramento of the organizers during the early part of 1912. The amount actually sold--for which cash or notes were paid--was $50,000, according to Bresee; $20,000 still is outstanding in uncollected notes given for stock and, during the last year, $27,000, represented in notes, was returned to stock purchasers, for one reason and another.
Placerville Man's Opinion.
S. H. Maginess, Placerville, who was listed as one of the company's Directors in the latter part of 1913 said on Thursday:
"I think the whole thing rotten, and the majority of stockholders have given up all hope of ever obtaining the slightest return on their investments."
Stockholders in Placerville--and there are a score or more of them--believe they "have been stung," according to reports coming from the El Dorado County city. Here are some of the people in El Dorado County who own stock and who, it is reported from Placerville, are among those who believe they have paper of little value on their hands: S. H. Maginess, George Rolleri, George Rieber, N. Fox, Jack Yager, William F. Bray. Arthur Davis, J. Monteverdi, J. F. Limpinsel, Henry Marks, William Poor, Mrs. Blakley, and Semour Hill.
In Placer Also.
From Placer County there also has come a complaint that the company and its officers or agents have not kept the promises made when the stock was sold. M. B. Johnson, a business man of Roseville, invested in stock last year and declares he bought on the promise that if the company did not proceed with development work at once, the money he had put into the concern would be returned to him.
According to Johnson, his repeated efforts to secure this money have resulted in failure. Bresee said yesterday that Johnson bought $1,000 worth of stock, and that a $500 note had been returned to him on representation that he could not meet it.
The concern sold stock on the promise of installing the Telephone Herald service in Sacramento and other cities of Superior California, and the stockholders were promised large returns from the earnings of the company.
This, in short, was the scheme:
The service consisted of a sort of telephone to be installed in homes and public places for the dissemination of news, entertainment, business information, market quotations, local topics, baseball reports, fight reports, operas, concerts and even plays and musical comedies.
This invention made it possible, it was claimed, for a person, by paying $1.50 a month, or 5 cents day, to keep in direct touch with everything down to the minute, and not stir out of the cozy library. All that would have to be done would be to place the attachment to the ears and listen.
A subscriber would not have to go to the vaudeville shows to hear the music and the playlets and the jokes, nor would he have to go to the opera to hear the celebrated tenor, or the divine soprano warble.
All this, and so much more it is too bulky to recount, was to have been included in the repertoire of the company, and it was promised that this plant would be in operation in Sacramento within a short time.
Concern Melted Into Another.
That was in 1912. Later the Sacramento concern melted into the Oakland concern, and the latter has reached that stage where it cannot do a thing, not even sell stock, according to both Whisner and Bresee.
Status of Case.
The status of the thing is said to be this: The promoters of the local concern--Whisner and Bresee--have have cleaned up the slate by placing everything in the other company. This other concern is known as the Pacific Telephone Herald Company as well as the Oakland Telephone Herald Company.
It is declared that if anything is done in the future to put into operation the Telephone Herald system, this must come from the Pacific Telephone Herald Company and the Atlantic Telephone Herald Company.
Whisner said yesterday the Pacific Telephone Herald Company has control of all the territory east of Chicago, and future operations depend
on the proceeds from the sale rights in this vast district.
One of the complaining stockholders was reported to have said it was his opinion the plan was to keep on organizing and merging, going from one place to another, making promises and excuses, enlarging territory and expanding until the topmost geographical limit had been reached.
Used Local Men's Names.
When the promoters came to Sacramento and organized they made quite a flurry by using the names of local capitalists and business men without the consent of some of these. Right off they published flaring advertisements heralding Henry Mitau as a Director and an investor in the stock. The salesmen went among the people and called attention to Mitau's name, using it as an illustration of what one Sacramento capitalist thought of the proposition.
Mitau declares that he never owned a cent's worth of stock in the concern, and, further that his name was used without authority.
Louis Breuner, another local business man whose name was used against his wishes, and he ordered the company to discontinue using it in the advertisement.
D. W. Carmichael, real estate man and Bank Director, was made a Trustee by the concern, and he was to have been the custodian of the money turned in. Not one cent ever was turned over. Carmichael also was listed as a stockholder, but he says he never took any of the stock.
Senator Phil Cohn is another whose name was used by company stock salesmen in and around Folsom for the purpose of helping in the sale of stock. An effort was made to force the Senator to pay $2,000 for stock Bresee alleged Cohn had signed a contract to purchase.
This failed according to Cohn, because the instrument which Bresee claimed was a contract turned out to be an option which did not require Cohn to do anything.
Concerning this, Cohn says that when the option was given to him at Folsom he wrote into it a clause or two which set forth plainly that he was not bound to purchase any stock until a showing was made that all the stock had been sold. When Breese made the effort to compel him to pay $2,000, it developed that the copy held by Bresee was not like the one held by Cohn, and was, in fact a contract, and had no clause making the deal optional.
Bresee, in a sweeping denial of the foregoing, says that Mitau, Breuner, Carmichael and Cohn, with one other not named--Henry Heilbron--did buy stock; that they did authorize the use of their names; and that they were let off and their notes returned to them out of the goodness of heart of the company officers.
According to Bresee, Mitau bought $2,500 worth; Carmichael, $2,500; Breuner, $1,000; Cohn, $2,000; and Heilbron, $10,000.
Both Bresee and Whisner said yesterday the Central California Telephone Herald Company would have been operating in Sacramento had the local capitalists, who contracted to buy stock, kept their contracts. They both denied the plan was to keep on merging into bigger concerns and thereby swallow out of sight the little companies, while the buyers of stock got nothing but promises. They said the Pacific Telephone Herald Company intends to do something as soon as money matters get into better shape.
Whisner Going East.
Bresee volunteered the information that Whisner intended soon to go to Kansas City to organize a Telephone Herald Company.
These Telephone Herald companies have been organized--according to the announcements in advertisements--all over the East, in the South, in the Middle West, in Canada and up and down the Pacific Coast.
The only plant that has operated commercially, so far as is known here, is one that gave the baseball games in Portland last year to saloons and other public places. When the stock-selling force was in Sacramento a demonstrating plant was installed and demonstrations given.
Under the merging operations the company, which was promoted here, merged into the Oakland Telephone Herald Company, also known as the Pacific Telephone Herald Company. The Pacific Telephone Herald Company is said to be half of the United States Telephone Herald Company, other half being the Atlantic Telephone Herald Company.
Stock in the Central California Telephone Herald Company was cancelled. It was supposed to have been valued at $10 a share. In its place was issued five shares for one in the Pacific Telephone Herald Company of Oakland, valued at $2 a share.