The Press-Democrat. (Hennessey, Okla.), Vol. 17, No. 28, Ed. 1 Friday, June 11, 1909 Page: 3 of 8
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The Katydid Mine Swindle
By an Ex-Operative of the Secret Service
Captain Dickson's Own Story of Unearthing a Colossal Fraud
S A RULE the in-
Aspectors of the
post-office depart-
ment look after
matters of fraudu-
lent uses of the
mails, said Capt.
Dickson on a cer-
tain occasion
when I had
1H/ dropped in for a
quiet smoke and a
glass of sherry,
but when a case
develops unusual difficulties the se-
cret-service department is called
upon. This does not often happen,
however, for there is a lot of rivalry
between these departments and not
a little jealousy. It is only as a last
resort that our branch of the ma-
chinery of government is brought into
requisition, and not until the post-
office inspectors have failed utterly.
A case of this character occurred
a few years ago in one of the larger
western cities.
It was a mining-case—a company
backed by $50,000,QUO capital stock—
and, to all appearances, it was a
legitimate scheme. Among its direc-
tors were four or five well-known
western mining men, one I remember
a fraud, but I readily saw that I had
no common crooks to deal with.
My figures showed that the mine
was producing less than $300 of ore a
day, little more than enough to pay
the expenses of operating, and cer
tainlv not enough to sustain the ex-
pensive offices in the city and pay
the fabulous dividends on the stock.
I didn't take a bit of stock in
Mason's claim of a secret process of
refining. I knew that was a fake out-
right, but I wanted confirmation ot
it, and the only way to obtain this was
to get inside the little building at the
mine where Mason and Belden slept
and where the separation of the gold
from the amalgam was effected.
I had almost worked myself into a
fever over it when, one night, I went
up to my room at the little hotel of
the mining camp after supper and sat
down to read myself to sleep. 1 had
bought a couple of paper-back novels
at the drug-store, from its rather lim
ited stock, and among them there was
a copy of Victor Hugo's masterpiece,
1 had read the book before, but it was
a favorite of mine and I hadn't much
choice in the matter of selection. 1
was so wrought up over the question
of getting into the refining-plant that
connected reading was out of the
It was something after ten o'clock
when 1 completed my investigation, | broke loose."
fleeted upon
the buildlntf. With great caution 1
raised the lid upright and crawled out
of the opening.
I was Indeed within the mysterious
building. In my excitement at this
discovery I released my hold of the
j upright lid and it fell to with a metal
: ; lie report that sounded, to my tense
j senses, like the boom of a coast-de-
fense gun.
The next instant I heard a voice,
which 1 recognized as Mason's, excit-
edly bellowing:
"Who's that," he demanded. "Hey,
Belden." he continued, "something's
being an ex-United States senator. It I question, so I skipped about through
advertised extensively in the newspa- the book, reading a chapter here and
pers and by circulars. Orders for
stock were pouring into the company
In such large quanities that it re-
quired two and three mail-wagons,
sometimes, to haul a single day's
mail.
The advertising matter of the com-
pany, which operated under the name
of the Amalgamated Gold Syndicate,
was cleverly written. It stated that
the discoverers of the mine were two
poor prospectors without kith or kin
but with hearts overflowing with gen-
erosity, who, from the two millions of
stock that each owned, derived a rev-
enue greater than either could spend
and, appreciating the afflictions of the
poor and the scant opportunities for
a man of small means to And a safe
and profitable investment for his sav-
ings, they had decided to share their
wealth and prosperity with their fel-
low men.
The company placed $2,000,000 of
stock upon the market each year,
11,000,000 in January and $1,000,000 in
July. It advertised that no one person
would be allowed to subscribe for
more than $100 of each semi-annual
issue and that the subscription-books
would be closed as soon as the re-
quisite million was subscribed.
The post-offlce department became
suspicious as soon as the advertise-
ments began to appear, and the in-
spectors were immediately put upon
the case. They worked for six months
and found nothing that supported
this suspicion in the slightest. On
the other hand, they established be-
yond doubt that the mine had been
discovered by two poor miners who
had no relatives living, so far as
could be determined; that they had
induced capitalists to invest $1,000,000
In cash in the venture, and had then
organized and incorporated the Amal-
gamated Gold Syndicate with a paid
up capital of $5,000,000, selling the
mine to the corporation for $4,000,000
of stock. The mine was called "The
Katydid," and it had been worked for
a time by the corporation at a big
profit. The two miners, poor no long-
er, had, after a time conceived their
charitable scheme, and had put it
through much against the wishes of
the minority stockholders, who were
powerless to prevent it.
Accordingly, the capital stock had
been increased from $5,000,000 to
150,000,000 and the charter authorized
$2,000,000 of the Increased stock to
be sold each year.
The company apparently did every-
thing that it advertised. It regularly
paid its stockholders an annual divi-
dend of 20 per cent.
Hudson, one of the miners, was
president of the company, and in
charge of the offices it maintained in
the western city, which I have already
mentioned, while Mason, the other
of the dicoverers, was general mana-
ger and in control at the mine. Both
Hudson and Mason bore out the char-
acters that the advertising matter of
the syndicate gave to them. They
dressed in rough, cheap clothing,
chewed tobacco, and showed a disre-
gard for money that is characteristic
of men who have worked hard all
their lives against an adverse fortune
and who have suddenly come into
great wealth. In everything they
acted the parts of uncouth, unedu-
cated sons of the soil.
At the Katydid mine, visitors were
always welcome. They were shown
over the properties with the greatest
freedom, only one place, the small
building where the metal was separ-
ated from the amalgam, was denied to
them. Mason explained this by say
lng that the company possessed a
secret process for refining which he
had discovered and which was known
and I decided to explore the pipe with
out further delay. I removed my shoes
and hid them beneath a bowlder,
looked to the cartridges in my re-
volver, a precaution I have always
taken since a certain adventure down
on the Rio Grande. Then I crept Into
the pipe. It was cool and clammy and
as dark as a dungeon. I had a little
pocket electric Hash light, but was
afraid to use it, as the distance to the
reducing-plant was less than 100 yards
from the ravine.
My progress-was slow and tiresome.
Nevertheless, in good time, I came to
a point where the pipe made an ab-
rupt turn straight down, which con-
vinced me that I was about at the
end of my journey. I reached down
the hole as far as my arm would go,
but couldn't touch bottom so, after
listening for a time and hearing noth-
ing more than a distant drip, drip of
water which was most lonesome, mys-
terious, and melancholy, I tore my
pocket-handkerchief into strips and
weighted it with a cartridge so that 1
might sound the inky depths below.
I was sensible enough not to drop
down into the pipe without making
a reckoning, as I had learned this pre-
caution by sad experience. To my
great relief the plummet struck bot-
1 didn't know what to do, so great
was my surprise at my own rash act j
and its consequences.
I could hear Belden sleepily call j
back something that I could not make
out and Mason reply. Then there |
was a creaking of springs and two
dull thuds as the men sprang from
their beds. It was a ticklish situa j
tion, and I certainly thought the jig :
was up. Luckily, neither of the men
had a match and I could hear them !
swearing luridly over this fact, the [
every
seen to 'em myself before we turned
in just as I does every night."
"That don't matter," retorted Mason
with warmth, "we can't take chances,
and we must find what made the
noise if w« have to look all night.
Nothing could have fell if it hadn't
been pushed over and it takes some- |
thing live to push things over. I
haint liked the way that stranger has
been poking around here lately. I've
had my suspicions of him all the time j
and I came near as anything taking s
pot shot at him that day 1 found him j
hid out behind a bowlder watching the
mouth of the mine through his spy-1
glass."
"Why didn't you," queried Belden |
in a sneering tone. "I'd a done it. it |
1 had been the one to find him j
What's the matter with you is yon
don't want to do a thing but coppei j
your share of the swag and play safo j
all the time. Wish I'd 'a' found him I
He'd been wolf feed in less'n no time.' |
"Well, taint no use fussing about it
now," replied Mason. "I'm glad I
didn't shoot him, for it would have I
brought a lot of detectives and gov
ALASKA YUKON - PACIFIC EXPOSI-
TION OFFICIALLY STARTS.
PRESIDENT TOUCHES GOLD KEY
ratile of a tin lantern punctuating er,llnen^ men about here and would
their profanity. This gave me an op
port unity to take a hasty survey of
my surroundings. I sprang from my
perch astride the big pipe to the con
crete floor six feet below and scram
bled beneath a long table that stood
at side of the room There was
just enough moonlight sifting through
the dirty, iron barred windows to
give me a bare idea of my situation.
have spoiled our game right off.
"Well, let's go back to bed," yawned
Belden, ignoring the taunt.
"Not until we've found what made
that noise," answered Mason. "You
wait here until 1 get the headlight
from the office. This blamed lantern
aiiv't worth shucks."
"All right," grumbled Belden, and
swing
The building was 30 or 40 feet in ; Mason went towards the door,
length and I was near the farther end j ing the lantern as he walked.
from the room where I could hear the j heard enough to justify mo In
men stumbling about in the darkness arresting the men and in going to any
and swearing like troopers. On every
hand were tables and boxes and ma-
chinery and washing-troughs. Not a
second too soon had I concealed my-
self, for scarcely had I reached the
ti
wr/f/rm/s'wfdrmf/mi/m/'frtffw/ifi? MM M
ms/ic/i'OFmm/c.
a bit there until I came to the adven-
ture of Jean Valjean in the Paris
sewers. In an instant I was tingling
in every nerve, for I had found the
solution of my problem, although it
was both foolhardy and beset with the
gravest dangers.
The reducing plant was in a low-set
building, adjoining the stamp mill, and
the water supply was conveyed to it
from a dam some distance up the
canyon through an iron pipe two feet
in diameter. The water supply was
limited, and at night the flow was shut
off, leaving the pipe quite empty. I
had observed the pipe in my ram-
blings about the neighborhood of the
mine but had never thought of it as
a possible entrance to the building
until I read of the hunted J«n
Valjean taking to the sewers like a
rat to escape his implacable foe. Pos-
sibly I never should have thought of
it if I had not chanced to buy the
ten cent book at the drug-store. This
Is but an instance of the influence on
our lives of seemingly trivial things.
Tossing the book upon the floor I
hastened out into the night and made
only to himself, to Hudson, and to I with all speed for the big pipe. The
Belden, the company's chemist.
This, in brief, was the status of the
case when I was put on it. It was
given to me because I had been a
miner and prospector and had studied
geology and assaying.
After working a week on the case I
water left the reservoir In a sluice-
way of concrete and ran for some 200
yards in a trough of the same mate-
rial until Its course crossed a deep,
narrow gulch, which made the pipe
necessary. This was to be my point
of entrance, as from here on to the
satisfied that the company was mill the pipe was continuous.
tom about four feet down and I cau-
tiously lowered myself, feet first, into
the well.
It was rather close quarters, but I
managed to feel about me in every di-
rection, and to my dismay found that
at this point the pipe divided into half
a dozen smaller ones, nonq of them
over six inches in diameter. This was
a sad blow to my hopes ani I felt al-
most defeated, so great was my
chagrin. There was nothing to do
but clamber back to the straight
stretch of the pipe, where I paused a
moment to think.
It was so dark that I couldn't see J
my hand before me, so I thought it
safe to take out my pocket-lamp and |
examine my surroundings. Flashing I
it overhead, I was overjoyed to see |
that the bend In the pipe was ar
ranged with a circular door which |
was held down by a spring catch j
which fastened beneath a flange. I
released this, and was rejoiced to
feel the door move upward when I
pushed against it.
It was an opening large enough to
permit a man's body to pass through
it, and I suppose it must have been
arranged so that the pipe could be
cleaned out if it should become
clogged with leaves or trash. At any
rate it ofTered the much sought en-
trance to the building, for when I
pushed the top upwards a few inches
and peered out beneath it I could see
the faint rays of the perfect moon re
deep shadow of the table when I
heard a door grate on its hinges and
the feeble rays of a lantern illumin-
ated a few cubic feet of space about
the lanky legs of the raw-boned
miner.
With my heart going about 200
beats ^ minute, I crouched beneath
the table, gripping my revolver and
very much in doubt about what I
should do if I were discovered, which
seemed a certainty. Of course I
could have shot both men and made
[ my escape through the flume-pipe, but
j there was nothing to justify this con-
| duct. Thus far I had nothing but sus-
I picion against the two men, and such
i an act would have been nothing less
than murder. 1 decided to let matters
shape themselves and only endeavor
| to keep out of sight.
The men blundered about the room
for awhile, the lantern rather handl-
caping than aiding them In their
search. I could hear every word they
said and the uneasiness they showed
was certainly a suspicious circum-
stance.
Finally they stopped a short dis-
tance from my place of concealment.
I could see their feet, about which
the lantern's light concentrated, and
they were facing away from me, which
gave me a little more hope of es-
caping.
Belden was speaking.
"I tell you," he said, "it was some-
thing fell. It wa'n't anything else be-
length to accomplish It. Mason would
not be gone long, 1 well knew, so I
decided to capture Belden before his
partner returned.
I stealthily crawled from under the
table, my stocking feet making nc
noise upon the concrete floor, and
warily approached the unconscious
Belden. 1 could just make out his
bulk, where he stood in a dark por
tion of the building, and I could heat
the rustling of his clothing. Ha
scratched a match and 1 held my
breath. Fortune favored me. He was
lighting a corn-cob pipe, his back fair
ly to me. Like a shadow 1 glided to
ward him and with a quick, sure
stroke brought my heavy revolver
down upon Iho back of his neck with
a sickening, crunching impact.
lie fell without a groan and lay like
one dead. Nevertheless, I took the
precaution to slip a pair of handcuffs
upon his wrists, and then 1 sprang
towards the door through which 1
could see the light of Mason's lantern
advancing. I was not a second toe
soon. As Mason crossed the threshold
I struck him a heavy blow upon the
head and he went down like an ox
in the shambles. 1 handcuffed liiifl
and picked up his lantern.
Next, I packed the unconscious men
into the room where they slept and
deposited them upon the bed, after
which I set about restoring them tc
consciousness. This room opened into
the office where was situated the
vault. After some little time Mason
groaned and sat upright.
"Well, pardner," was his crestfallen
greeting, when he had looked me over
carefully, "1 guess you hold the trump-
cards. What do you mean to do
next?"
He showed no resentment and
seemed, at first, to think that I was
a bandit. I showed him my badge
which bad an electrical effect upon
him.
In my brief acquaintance with him
I marked him as a man who would
confess everything and endeavor to
escape punishment by implicating his
confederates, so I explained to him
as much of my suspicions as seemed
expedient and made several guesses.
This quite overpowered him, and after
it he was as pliant as wax in my
hands. He confessed everything and
opened the big vault for me and
showed me the books of the company.
I had expected to have some difficulty
with htm and to have to do more
bluffing than proved necessary, but
he did everything in his power to
help me.
He said that he, Belden, and Hud-
son had turned the trick without as-
sistance. They had conceived the
gigantic fraud when the mine began
to fall, and had experienced little dif-
ficulty in putting it into effect. On
(he line showing the mine had made at
first, they succeedi d in getting $1,000,-
000 invested in it, after which they
had incorporated and begun to sell
stock. They took the money they re-
ceived for stock and converted it Into
gold coin, which they shipped to the
mine, where it was melted down,
run into bars, shipped back to the
city, and sold as bullion, a part of it
going to pay dividends.
1 had suspected this when I had the
quantitative analysis of one of their
bars of gold made, for it had showed
the percentage of amalgam that is
used in gold coins. The last shipment
of gold coin was in the time-lock safe,
which wouldn't open until eight
o'clock next morning, sd I made a
hasty examination of the books and
then trussed my two prisoners up like
turkeys while I went to rouse the
marshal. He was an Intelligent Irish-
man, who had knocked about the
world a good deal, and It didn't take
long to explain the situation to him.
He accompanied me back to the mine,
after I had wired instructions for Hud-
son's arrest, and relieved me of my
charges.
I spent the night going over the
books and examining the records In
the vault, and by morning I had every-
thing I wanted to lay bare one of the
most colossal swindles ever attempted.
(Copyright, 1909. by W. Q. Chapman.)
(Copyright in Great Britain.)
Impressive Ceremonies Are Held on
the Grounds and the Bix Exposi-
tion is Started Under Most
Favorable Auspices.
Seattle. Wash.—President Taft la
the White House at 3 o'clock yester-
day afternoon pressed a telegraph
key of Alaska gold and sent a spark
across the continent that put In mo-
tion the wheels of the Alaska Yukcm-
Pacific exposition; loosed the waters
and Its fountains, unfurled lis ban-
ners, started the hands playing, re-
leased showers of daylight fierworks.
called upon the saluting guns of Iho
American and Japanese fleets, set all
the steamers in the harbor and all the
locomotives in the railroad yards bel-
lowing and shrieking and brought
forth universal rejoicing from all Se-
attle, which has toiled for years to
bring about this day.
Jap Sailors in Parade.
The exercises at the worlds fair
grounds preceding the president's sig-
nal were carried out with military
precision. The exposition gates were
opened at 8:30 o'clock. At 9:30
troops from the United Stales army
and navy, the Japanese cruisers Aso
and Soya and the slate militia par-
! aded through the grounds under the
I command of Colonel T. C. Woodbury.
I II. S. A., and the column was reviewed
from a sland at the head of the Court
i of Honor by exposition officials, vis-
I I ting governors and Admirals 11. ljlchl
j and Uriel Sebree.
The ceremonial exercises were
held In a vast amphitheater sloping
lo Lake Washington. The stage of
this theater seats l.flOO persons and
is located at the lakeside
The program consisted of music,
invocation by Catholic Bishop Ed-
ward J. O'Day, brief address by Di-
rector General 1. A. Nadeau and Pres-
ident J. IS. Chllberg, the long address
by James J. Hill, chairman of the
Great Northern board, and benedic-
tion by Episcopal Bishop Frederick
W. Keator.
All Preparatory Work Done.
Then, just before noon (Paclflo
time) word was flashed to the White
House that all was ready and Presi-
dent Taft's response set loose the
flags, bells, machinery, curious Jap-
anese fireworks and noise. When the
message was announced a huge gong
struck five strokes and an enormoua
American flag was unfurled and thou-
sands of small flags were scattered In
the breeze. A mountain battery fired
a salute of twenty-one guns, the Jap-
anese and American fleets In the har-
bor several miles away crashed out
their tribute. Luncheon was served
to Invited guests at the speaking:
platform and out of the New York
building. During the afternoon there
were receptions at all the state build-
ings. The day was warm and partly
cloudy.
The fair as thrown open yesterday
was finished and rarpenters and
painters were nowhere to be «een.
The few delayed exhibits will be in-
stalled at night. The only serious de
ficlt Is the Hawaiian and Philippine
displays, but the transport Dlx la
speeding hither with them.
JUNKINS MUST SUFFER DEATH.
Des Moines, la.—Negro John Jun-
kins last night was found guilty at
Centerville of the murder of Clara
Rosen, the Ottumwa choir singer, Feb-
ruary 5 last and was sentenced to
death by Judge M. A. Roberts.
The jury returned its verdict after
a deliberation of less than four hours
at 7:50 o'clock. There was an Im-
mense crowd awaiting the result of
the trial and as the last words were
read by the clerk a shout went up
which was taken up by the crowd in
the court house square.
Attorneys for the defense waived
their customary right of three days
before sentence of death is passed
and agreed that Judge Roberts pass
sentence immediately, which the
court did. Junkln will hang the last
Friday in July, 1910.
Junkin's crime was one of the most
atrocious in Iowa. He confessed kill,
ing Clara Rosen on the night of Feb-
ruary 5 last with a stone while sha
was returning from the home of her
sister. Later he dragged the girl Into-
an excavation and assaulted her
DROWNED IN LAKE AT FORT.
Homer Moore Was Preparing foe
American Maneuvers.
1-iea.venworth, Kan.—At noon yes,
terday Homer Moore, Company K,
Third battalion of engineers, U. S. A.,
was drowned at Lake Merritt, at the
fort, while preparing for pontoon
maneuvers. It Is believed that In
swimming beside his horse he was
struck by the animal's hoof and this
caused him to sink. The officers
swam to his rescue but were unabl*
to save him.
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Tiernay, F. G. The Press-Democrat. (Hennessey, Okla.), Vol. 17, No. 28, Ed. 1 Friday, June 11, 1909, newspaper, June 11, 1909; Hennessey, Oklahoma. (https://gateway.okhistory.org/ark:/67531/metadc132258/m1/3/?q=%22~1%22~1: accessed July 17, 2024), The Gateway to Oklahoma History, https://gateway.okhistory.org; crediting Oklahoma Historical Society.