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Business Scams (1869-1913)
Categories: Financial Scams, 1869-1913
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Keely Motor Company, 1875 (1875-1898)
John Worrell Keely founded the Keely Motor Company in 1875 in order to develop and commercialize his invention: a "vibratory generator" that required only a quart of water to generate the equivalent of the power needed to pull a fully-loaded train for over 75 minutes. Following successful demonstrations of this miraculous device in his workshop, investors rushed to give him money, even though the scientific community derided his claims. For fourteen years he kept working on his engine, promising investors that the moment was just around the corner when he would unveil it to the world. The investors believed him and kept pouring money into his bank account. When he died in 1898 investigators discovered the secret of the engine. There was a compressed air machine hidden in the basement of his house that fed power to the engine located two floors directly above it.
In February 1876, 'Professor' James C. Wingard of New Orleans announced he had invented a powerful new weapon that would utterly destroy any naval vessel, iron or otherwise, "so as to leave no trace of them in their former shape." Wingard was coy about the exact means by which his weapon operated. He would only say that it projected a "nameless force," which somehow involved the use of electricity, applied without any direct connection between the machine and the object to be destroyed -- and it supposedly worked at a distance of up to five miles, far beyond the range of any other gun or cannon. In other words, this was a nineteenth-century version of a death ray. Wingard claimed that a few ships outfitted with his weapon would be able to dominate all the other navies in the world combined. In fact, he anticipated that his weapon would mean the end of naval warfare altogether, since the first navy to acquire it would become invincible and reign supreme. More→
Freund’s Electric Sugar Fraud, 1889 (1884-1889)
In the mid-1880s, Henry C. Freund showed up in New York, claiming he had invented a process that would revolutionize the sugar refining industry. He said he could refine one ton of raw sugar for 80 cents, whereas the techniques currently in use cost around $10 a ton. Plus, his method took only ten minutes, and it produced a high-quality granulated sugar, far finer than any seen before. But he insisted on keeping his process secret, disclosing only that it somehow involved electricity. On this enigmatic premise alone, he found investors willing to help him form a business, The Electric Sugar Refining Company, valued at one million dollars. But the reality was that he didn't have any secret process, let alone one involving electricity. He was simply switching raw sugar for refined sugar he had bought in stores, and then hiding the raw sugar in a secret room at his factory. More→
The Gold Accumulator, 1896 (1898)
Prescott Jernegan claimed he had found a way to cheaply extract gold from sea water. His "Gold Accumulator" consisted of a wooden box, inside of which was a pan of mercury mixed with a secret ingredient. A wire connected the mercury to a small battery. When lowered into the ocean, this contraption supposedly sucked gold out of the water.A test conducted in Narragansett Bay in February 1897 proved the gold accumulator worked. After a few hours the box was raised, full of gold flakes.
Soon Jernegan had found investors who helped him found the Electrolytic Marine Salts Company. When the company offered stock, the share price rapidly rose from $33 to $150. But to the dismay of investors, the apparent success of the gold accumulator was entirely due to the diving skills of Jernegan's accomplice, Charles Fisher. Fisher would swim underwater in a diving suit and salt the mercury with gold.
Jernegan and Fisher fled to France in July, 1898 with over $200,000 before the scam was found out. More→
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Here is a fake that your site overlooked: The Paper City.
In the 1860's, a huge publicity campaign appeared in the United States, primarily along the eastern seaboard. Promoters were loudly proclaiming that a new city called Rollingstone was being developed along the Mississippi River near the borders of Wisconsin and Minnesota.
To add interest to the promotional campaign, maps were available, which showed that Rollingstone was not only a planned community--a newfangled idea at the time--but that the city already boasted of a city hall, library, courthouse, etc. And, the promoters pointed out, there were not only finished houses for sale, but also many lots still available for those who either wanted to buy them and build their own house, to save money.
Rollingstone appealed to many people, especially to new immigrants to the United States. The idea of coming into a town where you already owned property was a dream come true, and the Rollingstone sales skyrocketed.
However, when the people arrived at the location of Rollingstone, they found nothing but a bleak open prairie. The few inhabitants of the area, lonely farmhouses for the most part, had never heard of Rollingstone. Dispirited and angry, the investors ranged far and wide looking for their fabled city, but found nothing but barren landscape. In dejection, they called Rollingstone "The Paper City".
The slick promoters were never caught, and the evil genius who created the scheme remains unknown to this day.
Posted by Lawrence in California on Mon Oct 15, 2012 at 12:21 AM
In the 1860's, a huge publicity campaign appeared in the United States, primarily along the eastern seaboard. Promoters were loudly proclaiming that a new city called Rollingstone was being developed along the Mississippi River near the borders of Wisconsin and Minnesota.
To add interest to the promotional campaign, maps were available, which showed that Rollingstone was not only a planned community--a newfangled idea at the time--but that the city already boasted of a city hall, library, courthouse, etc. And, the promoters pointed out, there were not only finished houses for sale, but also many lots still available for those who either wanted to buy them and build their own house, to save money.
Rollingstone appealed to many people, especially to new immigrants to the United States. The idea of coming into a town where you already owned property was a dream come true, and the Rollingstone sales skyrocketed.
However, when the people arrived at the location of Rollingstone, they found nothing but a bleak open prairie. The few inhabitants of the area, lonely farmhouses for the most part, had never heard of Rollingstone. Dispirited and angry, the investors ranged far and wide looking for their fabled city, but found nothing but barren landscape. In dejection, they called Rollingstone "The Paper City".
The slick promoters were never caught, and the evil genius who created the scheme remains unknown to this day.
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