study its advertising columns. Leaving out of account the department store announcements and the want columns, consider what a large part of the remaining advertisements bear the mark of almost obvious fraud. During the past few flush years these papers have been crowded with alluring advertisements of corporations with enormous capitalization, whose stock is issued, generally in small denominations, to place it within the reach of "small investors:" tempting gold and copper mines for the discontented janitress and ambitious elevator man, corporations with new processes and machinery to revolutionize the manufacture of household articles or necessities, corporations exploiting startling inventions calculated, on paper, to reverse the ways of commerce. An investigation would probably show that a majority of these companies are created solely for the purpose of selling stock, and without the slightest intention on the part of their promoters or officers of doing any legitimate business with the money acquired. During the Klondike fever a few years ago corporations of this kind were born daily in New Jersey and West Virginia with enormous paper capital, with a reasonable sprinkling of respectability in their directorates, and with glittering prospectuses, compared to which the South Sea Bubble was both honest and conservative. It may be doubted whether of the dozens of these highly advertised companies, organized to sell stock and work the gold mine of public credulity, there is one in active existence to-day. The harvest was reaped, and, their purpose being accomplished, they faded away "to the nothing they set out from," leaving no trace of their existence except beautifully engraved certificates of stock in the sewing-machine drawer of the seamstress, or tucked away in the family Bible of the flat parlor. So accustomed have we grown to these companies, with their prospectuses full of fraudulent misstatements, over-valuations, and overestimates, that they long ago became a

popular topic for our shiftless American humor. A problem in America has to begin by being a jest, and we laugh at our troubles long before we think of doing anything about them.

Study the "Business Opportunities." What proportion of them are above the suspicion of being mere baits for catching gudgeons? As for the Wall Street advertisements, the "market letter people," the "pool" riggers, the inevitable "clerk in the office of a large corporation who will confidentially sell information of a certain movement in its stock," the turfguide companies with their daily tips, they require no comment. So far as drugs and medicines are concerned, we are so accustomed to quack nostrums that we consider them with the utmost toleration, and accept good-naturedly the maxim of one of the most successful of modern "nerve invigorators," that "the value of an advertised medicine depends on what you put on the bottle rather than on what you put in it.”

This country is notorious for its general indifference to adulteration and substitution of foods and drugs. Even when the article is found to be highly dangerous to health, actual punishment of its promoters is exceedingly rare. An amusing recognition of America as the natural home of food frauds was given recently in Germany, where the harsh government had pounced upon the prosperous manufacturers of a so-called Rhine wine which contained some rather remarkable adulterations. The manufacturers made a strong though ultimately unsuccessful plea to be left in peace. They maintained that they had never sold a bottle of their decoction in Germany, but were engaged solely in trade with the United States; that their business was very large, and afforded employment to many German workmen; and that an attack upon their business would be in effect made upon many other business houses likewise employing German workmen, and likewise engaged exclusively in export business to the United States.

A lengthy consideration of common forms of commercial fraud daily practiced is unnecessary, and would extend this paper beyond reasonable limits. The subject of "business graft" alone would afford a topic in itself, that form of criminal conspiracy which finds daily illustration through the whole length and breadth of business life, from the cook, whose beer bottles are charged up by the grocer, to the purchasing agent of the railroad, who grows rich on secret commissions for everything which, through him, his company buys. The point is not that these frauds exist, for every one knows that they exist and flourish luxuriantly. The significant thing is that in this country we do not think of these modern forms of criminal business as proper subjects for treatment by criminal law, and often we do not consider them as crimes at all.

Fraud accomplished by ancient methods, larceny of the simple and obvious type by the common criminal, we meet readily enough, but on crime of a more intellectual kind, particularly crime in the business methods and expedients of highly successful financiers and business men, we hesitate to put the mark of public disapproval. We have not yet realized the peculiarly corrupting influence of these offenses. In medicine we long ago learned that among bodily ailments smallpox and diphtheria were highly dangerous to the community, and with these diseases our health boards deal with commendable promptness, because they are recognized not only as serious diseases, but as highly contagious ones. Should not the criminal courts perform the functions of health boards in preserving the community from moral epidemics? In dealing with crime should not they deal with greater vigor with the more contagious form? Which, for example, is really the greater enemy of American society, the Mulberry Bend Italian who in a fit of jealous frenzy murders his wife, or the promoter of a heavily watered corporation who, by a fraudulent pros

pectus, induces the foolish innocent to lose thousands upon thousands of honestly earned dollars? At the crime of the Italian the moral sense of the community is shocked. Even his poor neighbors in his own tenement regard his offense with horror. The sphere of influence of such a murder is comparatively small, and the whole machinery of the law is immediately turned upon the criminal. If he flies, the police of the whole country aid in the search for him. He is quickly captured, quickly tried, and lifelong imprisonment is the penalty. To the promoter whose successful operations enable him to live a life of ostentatious luxury, and with whom reputable men are apparently not unwilling to associate, the criminal law ordinarily has nothing to say. As to the young men who see him living in elegance, with the profusion of worldly goods his methods have gained for him, who enjoy the hospitality of his automobile or his yacht, is it surprising that they should learn to think that there is a better way of getting money than by earning it, or that they also should become earnest students of that all too prevalent form of business success whose triumph consists in making plenty of money and keeping out of jail?

Another phase of the influence of the fraudulent promoter is in the effect of his efforts upon legitimate enterprises. Comparatively few of the investors who lost money in his "operation" because they thought his promising scheme afforded a legitimate means of investment for them could again be induced by any amount of persuasion to embark in another corporate venture, however honest or highly commended.

When shall we begin to consider the real importance of dealing vigorously through the criminal courts with the modern business vampire? By what process of reasoning can we make a moral distinction between the larceny of the despised green-goods or gold-brick swindler and the equally real larceny accomplished, for example, by the rich and

quasi-respectable promoters of the American Ship-Building Company, that bubble of fraud concerning which the public press has had so much to say recently. The trustee who hazards the funds of his trust estate in Wall Street gambling, and loses, speedily learns to his sorrow that his offense is embezzlement, and his punishment severe. How do we distinguish between the conduct which places him behind the bars of a prison and that, for example, of the president and directors of the trust company so closely associated with the shipbuilding swindle, upon which the financial report of the New York state bank examiner has recently been made public? That report shows that these directors made illegal and practically unsecured loans of enormous amounts, and permitted their president to use his official position, and the money of stockholders and depositors, to gamble in floating a so-called trust of the most flagrantly fraudulent character. Illegal loans to this president were made to ten times the amount which was authorized by the banking law, and the trust company preserved its solvency only by reducing its capital fifty per cent. "Its losses wiped out its entire surplus and necessitated the sacrifice by stockholders of over one half their holdings. Over a million dollars was charged to profit and loss." The state bank examiner, from whose report the last sentence is quoted, closes that report with a series of recommendations for new bank legislation to prevent acts which he says "flagrantly transgress the law." It is significant, however, that, notwithstanding this series of recommendations as to needed banking law, there is no suggestion that the existing criminal law be in any wise put in motion to punish such offenses by such highly respectable offenders, nor does the examiner comment on the insufficiency of that law for such a purpose, or advise any effective amendments.

Is it not more important, in the temper of these times, that the community should be both able and willing actually to pun

ish as crimes offenses of which these are but types, than that half-a-dozen slum murderers should undergo sentence? We suffer from no general temptation to com mit murder, but far too many of us, and not merely the poor and needy ones either, do suffer from temptations to make too much money in quick and devious ways. The failure of the criminal courts to reach these types of offenses and offenders can but be far-reaching in the evil consequences which inevitably follow from it, in undermining the national moral sense which the criminal courts were created to strengthen and support.

As a people we have a curious dislike to punish severely criminals of good social standing who have respectable friends. We take narrow views of the purposes of criminal law. Our conception of the proper use of punishment as a warning to others is limited to old-fashioned crime, and rarely finds practical application to such offenses as we have been here considering. An illustration of this indifference was given a few years ago in an important case in New York city. The officers of a national bank had permitted their institution to be wrecked by certifying, and thereby, of course, practically guaranteeing, the checks of a firm of stock brokers for enormous sums when the brokers did not have the money represented by the checks deposited in the bank. This was distinctly forbidden, and made a criminal offense, by the national banking law. The brokers failed, and the bank having closed its doors in consequence, the president of the bank was indicted. A jury having been empaneled to try him, he pleaded guilty, his counsel urging, as a reason for clemency, that the violation of this statute was a habit of the New York banks in the Wall Street district, and that if the wrecked bank had not followed this law-breaking custom of its competitors the stock brokers would have withdrawn their account. The plea was successful, and the officer escaped with a small fine. Imagine a burglar or a pickpocket urging a plea for clemency

based on the general business habits and customs of his criminal confrères! In dealing with offenses by criminals of previous good social standing we rarely look beyond the offender himself to consider the welfare of the community. If, for example, a man steals, and, after his indictment for the crime, his friends or relatives repay the amount of the theft, in America that is the end of the matter, and the offense committed against criminal law devised as a protection for the public is entirely negligible. The greatest bank wrecker in American criminal history now lives undisturbed in New York. He never served a day in jail for a defalcation of six million dollars. The indictments against him were all dismissed a few years ago. He even seems to have returned to some sort of social position, and the society columns of the New York Times, commenting some time ago upon a reception at his New York home, alluded with becoming gravity to certain Canadian guests as friends whom their host and his family had made "during their long stay in Quebec."

Recorder Goff, the well-known New York criminal judge, in the course of a striking address given before a club of lawyers in New York some time ago, related an incident which deserves repetition in this connection. He had been making the point that in criminal law the present American tendency was to protect the criminal at the expense of society. He illustrated his remarks by a personal incident which, as the writer recollects it, was substantially as follows:

"I was in the city of Mexico," he said, "some years ago, and went through the great city prison in company with the Mexican attorney general. As we passed along, observing the prisoners, all of them engaged in hard manual labor, one of them, of lighter complexion than the rest, attracted my attention. “That man looks like an American,' I remarked. The attorney general smiled, and said that he was. I then inquired what he was there for, and from the attorney general's

reply, and from a subsequent conversation which I had with the man himself, I learned the following facts: Some years before, in a central state in our own country, two men had been partners in a general real estate business. They lent money for clients, and had, in addition, the funds of many lodges and fraternal societies in their keeping. They misappropriated this money. Finally, after having exhausted the means of concealment, and having reached a point where discovery was practically certain, they debated together what they should do. What they decided upon was this: they had stolen in the neighborhood of $100,000, and they divided what remained of it; one of them fled to Mexico with his share of the booty, and immediately took steps to become a Mexican citizen, so that he could not be extradited for trial in the United States; the other stayed at home. After the crime was discovered, the one who stayed at home was indicted and tried. He fought desperately in the courts, but was finally convicted, with a strong recommendation by the jury for clemency. Powerful influences were brought to bear in his behalf, and he received a light sentence of less than two years in prison, which was materially reduced by good behavior. His prison labor consisted in keeping the prison books.

"His partner in crime, who fled to Mexico, was apprehended there, and his extradition was asked for. He had, however, become a Mexican citizen, and under the treaty between Mexico and the United States could not be extradited. Unfortunately for him, this application for extradition brought him to the attention of the Mexican authorities. He could not be sent to the United States for trial, for he was a Mexican citizen, but he could be and he was prosecuted as a Mexican in Mexico for bringing stolen money into the republic, was sentenced to ten years at hard labor, and was serving that sentence when I saw him. He had about seven years more to serve before he obtained that freedom which his equally guilty

American partner had then been enjoying for more than a year."

In

There are many reasons why the most important part of business crime fails even to reach the criminal courts. some instances the apparent inadequacy of the possible punishment makes a prosecution seem hardly worth while. The man who, after inducing the business world to give him credit for many thousands of dollars, transfers his property in order to swindle those who have trusted him, may be punished with no greater severity than the man who expectorates on the floor of a public conveyance. There are no reported cases to show that the New York statute, which makes this commonest and meanest offense against honest business a misdemeanor, has ever led to the punishment of a single offender. What moral difference can there be between the receiver of stolen goods, knowing them to be stolen, and the person who receives property thus conveyed by a swindling debtor? Yet the former may be punished with five times the penalty of the latter, and while proceedings for the offense of knowingly receiving stolen goods are common in the criminal courts, the reports contain no record of any prosecution of the commercial "fence," the transferee of fraudulently conveyed goods.

An excellent illustration of the attitude of the criminal law in a great commercial state toward essentially criminal methods of doing business is contained in the New York statute which defines the crime of larceny. One section provides generally that this crime is committed by a person who obtains property or any article of value from the true owner, "by color or aid of fraudulent or false representation or pretense." A subsequent section, however, carefully provides that to obtain property" by means of a false pretense is not criminal where the false pretense relates to the purchaser's means or ability to pay, unless the pretense is made in writing and signed by the party to be charged." This special dispensation in

favor of the commercial thief is instructive. Apparently it amounts to a license for him to obtain property on credit by any false statement as to his property or his ability to pay which his ingenuity may suggest, and guarantees him immunity from criminal prosecution so long as he avoids putting his falsehood in the form of a written statement, and over his own signature!

Another form of commercial crime which is constantly on the increase is that of counterfeiting trademarks and tradenames. In these days millions of dollars are annually spent in giving value to trademarks by advertising. When these trademarks have acquired such value by reason of the sums invested in them, as to make them second to few forms of commercial property, the necessity of protection against trademark piracy by punishment of the offenders (both from the standpoint of the owner of the trademark and that of the equally deceived and defrauded public) grows more and more apparent. Under the New York law the offense committed by a man who steals one man's business and another man's name by counterfeiting or imitating a valuable trademark, has not yet risen to the dignity of a felony. The moral difference between forging a man's name to a spurious note and forging his trademark to a spurious box or bottle is hard to see, yet the more ancient form of this commercial crime, the forgery of the paper, may be punished with ten times the severity of the equally important, though more modern offense. Nor is this all. Not only is the maximum punishment small for trademark counterfeiting, but in actual practice the writer is informed that in New York, at least, the cases in which imprisonment has been imposed have been so few as to be entirely negligible; and the fines have usually been so small as to amount to very little in preventing the growth of these crimes against fair trade. In a very recent case, the only one in the writer's knowledge in which imprisonment was actually imposed for