Newark Evening Star And Newark Advertiser

Postmaster-Gen. Hitchcock Leads Raid on New York Brokers.

OFFICERS OF BURR COMPANY ARRESTED

Practically All of Stocks Sold Were in Worthless Companies, Officers Declare.

NEW YORK, Nov. 21.--Federal officials this afternoon raided the offices occupied by Burr Brothers, a corporation dealing in stocks and other securities. The raid was made on warrants charging use of the mails to defraud investors.

Postoffice officials say that the concern has sold to investors at par value between $40,000,000 and $50,000,000 of stock in various companies, most of which have gone out of existence or become bankrupt.

The warrants were issued by United States Commissioner Shields and the officers of the corporation were arrested, and its books and papers seized. The raid was planned by Postoffice Inspector Warren W. Dickson, in charge of this district, and Postmaster-General Frank H. Hitchcock and Robert S. Sharpe, chief postoffice inspector, who came here from Washington to see that it was carried out successfully.

The officers arrested were Sheldon C. Burr, president; Frank H. Tobey, vice-president, and Eugene H. Burr, secretary and treasurer. Arrests are expected to be made in Cleveland, Chicago, Los Angeles and San Francisco, where the corporation has extensive offices. Postoffice officials have been working on the case for months. Hundreds of complaints have been made against the corporation by investors, who charge that they have been swindled through false representations made to them concerning the profits that were being realized by those who put their money into the various oil, timber, copper, lead, zinc and gold.

Inspectors Get Evidence.

Before criminal action could be taken postoffice inspectors had to secure legal evidence as to the standing and affairs of the various companies which the Burr brothers were promoting, and which they alleged to the investors were operating to their fullest capacity and were paying dividends. This inquiry necessitated visits by government experts to mines and other properties in distant parts of the country.

After the raid Postmaster-General Hitchcock gave out an official memorandum concerning the Burr Brothers, which was organized several years ago and in 1907 was incorporated with a capital of $100,000 and later increased to $300,000. The memorandum states that among other companies the Burr Brothers are selling the stock of the Buick Oil Company, a concern with $5,000,000 capital. The memorandum further states as follows:

Postmaster Hitchcock Talks.

"They have also organized the following oil companies: Carolina Consolidated, capitalized at $1,000,000; Coalinga-Alladin, capitalized at $1,000,000; Kern-Western, capitalized at $750,000; New York-Coavina, capitalized at $500,000; Coalinga Crude Oil, capitalized at $400,000; People's Associated Oil Company, capitalized at $1,000,000. All the stock in these companies has been sold except a portion of the two first named, and the greater portion of the money has evidently gone into the hands of Burr Brothers, Incorporated, while all the companies are still in existence, none of the first four named is doing any work at the present time.

"The Burr Brothers have also organized, promoted and sold the stock in the following mining companies:

"Rawhide Tarantula, with a capital of $1,000,000; Montezuma Mining and Smelting, with a capital of $1,000,000; Golden Fleece Mining, Milling and Refining Company, with a capital of $500,000. Practically the entire stock in these companies has been sold to the public, and at the present time all these companies have gone out of existence.

Companies Organized.

"The Burr Bros. have also organized, promoted and sold the stock of the following companies:

Ellsmere Farm of Michigan, California Eucalyptus Timber Company, capitalized at $1,000,000, and the New Amsterdam Securities Company, with capital of $100,000, which was later merged with Burr Bros., incorporated.

"They have also sold large amounts of stock in the Red Top Mining and Leasing Company, capitalized at $1,000,000; Long Beach, Mexico and Arizona Mining Company, capitalized at $1,500,000; Nevada Goldfield Mining, Milling and Smelting Company, capitalized at $5,000,000; United Standard Lead and Zinc, capitalized at $1,000,000; Florence Consolidated Mining and Leasing Company, capitalized at $1,000,000; Round Mountain Central Mining, capitalized at $15,000,000; Cobalt-Portage Mine Company, capitalized at $1,000,000; British-American Copper Mines and Smelter Company, capitalized at $5,000,000; Arizona Copper Gold Mines Company, capitalized at $1,500,000; Searchlight Canina Gold Mining Company, capitalized at $1,000,000; Holcomb Automatic Engine Company, capitalized at $5,000,000; Cottonwood Copper Company, capitalized at $1,000,000. All of these companies are at the present time out of existence.

"They have sold stock in the Happy
Jack Copper Mining and Development Company, capitalized at $500,000.

Yukon Basin Gold Dredging Company, capitalized at $1,000,000.

Toledo, Wabash and St. Louis railroad, capitalized at $6,000,000.

Chicago, New York Electric Air Line railroad, capitalized at $2,000,000 in connection with the Cooperative Construction Company, capitalized at $1,000,000.

The latter named companies are in existence at the present time.

Selling Jersey Lands.

They also sold the stock of the Vitak Company, a $1,000,000 corporation, which is now in the hands of a receiver and they are at the present time also engaged in the sale of lots in Lincoln, N. J.

It can safely be said that they have sold stock at par value from $40,000,000 to $50,000,000 in the various companies; have an extensive suite of offices in the Flatiron building, this city, and at times have had offices in Cleveland, Chicago, Los Angeles and San Francisco.

Sheldon C. Burr, Eugene H. Burr and F. Harry Tobey are the only members of the firm in New York at the present time.

In every instance they have promised large dividends on the stock sold, in addition to an increase in the value of the stock, but not in a single case have any of the companies paid any dividends, and, as stated above, practically all of them have been complete failures.

The department has received several hundred complaints from people who have bought this stock and lost their money.

The three officials of the company, President Burr, Vice-President Burr and Secretary Tobey, were arraigned before United States Commissioner Shields and held in $20,000 bail each.

The Federal prosecutor said that the frauds are very extensive. The date for the examination of the three prisoners will be determined later. Pending the furnishing of bail the officials of the company were placed in the prisoners' pen.