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THE OARDENZISLAND, TUESDAY, APRIL 12, 1921
A PLAIN STATEMENT OF FACTS
1. In a recent issue of the "Garden Island" there appeared
an advertisement under the caption "A Message to the Citi
zens of Kauai", for which I claim responsibility.
2. The ad had some considerable criticism. I am told that
one paragraph looked ludricrous and out of place, a fact of
which I was partially aware before printing it. The best
way to deal with this paragraph is to scrap it, which is hereby
done by the mere statement from me to the effect that :
I DON'T WANT A PARTNER
irrespective of whether he may have a sunshiny or gloomy
disposition, thirty cents or a billion dollars.
3. I was told by Messrs. Ilowell, Noonan and Law in their
office in Honolulu on the 31st day of March that "IT LOOK
ED LIKE IT WAS A DELIBERATE ATTEMPT TO IN
JURE TIIE KAN FRANCISCO AND MCMURRAY OIL
REFINING COMPANY AND TOE MEN WHO ARE
HANDLING IT.'- They based their deductions on the fol
lowing paragraph :
found Mr. McAlpinc a straightforward gentleman in
whom I have implicit confidence.
"Notwithstanding that however, I think that a refund
should be made to the parties who applied to us for shares.
There is one exception, however, a gentleman who gambles in
oil stock and doesn't care even if he does lose. His motto is
"Make or Break." The others are mainly poor people. But
whatsoever the Hawaiian Mutual Agency jnay do in the mat
ter I icish to refund to the parties wlw applied to us for
shares the amount of commission received by me. All per
sons, therefore, who applied through Cavanagh and McAlpinc,
or Cavanagh and Louis Fcrreria, are requested to send their
names to me at my local address, 315 Hawaiian Trust Build
ing. Tlvese letters will be sent to my Secretary at 711 Fort
St., Victoria, B. C. and in due course checks for refund will
be remitted. !
4. I disagree with the gentlemen that it was a "deliberate
attempt to injure them." My experience in life has taught
me that no human being ever rose by downing or injuring an
other, any injury undeservedly inflicted on anybody sooner
or later recoils on the party inflicting the injury. "Chickens
come home to roost," and they usually bring their mates with
them. Therefore, from a selfish point of view, I would not
knowingly attempt to injure them. Moreover, it would be
a very foolish policy for me to spend my time and money on
these advertisements, for any false pleasure I might find in
5. Self-defense, self-preseryation and a desire to enlighten
the purchasers of shares on certain unknown facts were the
factors that prompted me to take up the issue. I will now
give the details in brief narrative form.
6. Some years ago I knew Fred V. Law in British Columbia ;
he was then as he is now, a company promoter and a stock
and bond dealer. He bore a good reputation and his acti
vities in connection with the companies he floated, so far as
I have ever heard, were clean and wholesome. It was nat
ural, therefore, for me on meeting him in Honolulu, not to
.loubt or question the validity or soundness of the proposition
he was handling, but to take it for granted that it was fair
7. ne introduced me to his partner, Mr. H. C. Noonan, who
is Secretary and Treasurer of the Hawaiian Mutual Agencies,
Limited, of which company Mr. Law was President, both of
whom were the joint owners of the company, the business of
which was at that time the selling of shares in the San Fran
cisco and McMurray Oil Refining Company. Mr. W. K.
McAlpine was the Sales Manager.
8. These gentlemen told me the shares were Al, that they
were in the name of Harry C. Noonan, who, I understood, was
a Trustee of the company and was acting in that capacity
pending the registration of the San Francisco and McMurray
Oil Refining Company in this Territory, a procedure which
was then iu process and liable to be enacted any day. When
that was done all material contracts would be deposited in
the Treasurer's office for the inspection of stock-holders, at
least that is what I believed at that time. When it was
suggested that I accompany the Sales Manager, Mr. McAlpine
to Kauai on a two weeks stock selling expedition, I jumped
at the chance.
We were successful from the start. The magic word
"Oil Stock" appeared to have a hypnotizing effect on most
of the people. They virtually begged us to take their money.
,!uac played banker while I wrote the applications. It was
the first time in my life that I sold oil stock.
9. Suddenly our enthusiasm was checked. The Bankers of
Kauai had, according to the statement of one of them, banded
themselves together for the purpose of blocking the sale of
Oil Stock as far as in their power lay. Their united influ
ence was arrayed against the Oil Stock salesman; people
were warned; depositors drawing funds for investments iu
Oil Stock were persuaded otherwise. "Payment Stopid''
was a frequent occurance. The Banks even refused to sell
Mac a draft; things looked glum; we were really up against
it. The battle with the Bankers was mainly propaganda
work; such expressions as "Oil Stock is the Bunk", If you
want to gamble, play poker," "Bet on a chicken fight," "Play
Fantan or anything" were the common phrases used by the
Bankers. Once only did our battle with the Bankers assume
a warlike role, it was when I entered a Bank with a view to
wards interesting the Manager in joining me in a partnership
arrangement to purchase 10,000 of the shares. At the time
I really meant it. On noticing my presence, the Bank Man
ager let loose and yelled a war-whoop that would do justice
to a Comanche Indian on the warpath! He jumped fully
three feet iu the air, cracked his heels together iu typical wild
Western fashiou, then on descending he came down on the
counter with a thump of his fist that almost shook the whole
edifice, this was accompanied with the yell: "CLEAR OUT
OF THIS BANK, YOU OIL STOCKER." In less time than
it takes me to tell it I was in the middle of the street, hatless,
breathless and almost scared to death!
10. Our two weeks campaign was full of thrills, notwith
standing the almost incessant downpour of rain and our con
tinuous battle with the Bankers. I enjoyed every minute
of the time. Moreover, in spite of these handicaps Mac was
fairly satisfied with the number of shares sold. He felt
sure that the public would buy stock if the Bankers would
only mind their own business, and this was a problem whoch
required some scheming to combat. Mac would occasionally
ask me, "Are you with me, Jim ?" My answer was : "I HAM,
Mac, I'm with you till H freezes over."
11. There were two other salesmen on the other side of the
Island, they also had difficulty with the Bankers. We four
put our heads together for the purpose of devising a plan to
combat the Bankers' activities. Many devices were proposed,
some very numerous. One, however, suggested by Mac, a
ppeared under the circumstances to be the most logical. This
was it :
"Take anything as a side-line, books, pictures, insurance,
real estate or anything, then when you meet the right man,
spring your Oil Stock proposition on him." Humerous,
thought I, but under the peculiar circumstances existing at
the time, it appeared the most sensible of the schemes propo
sed. I decided to try it out on my next visit to the Island,
using real estate as the camouflage, or smokescreen of res
pectability for the Oil Stock. No harm could arise from the
experiment, anyhow. I was here in the dual capacity of
tourist and student of economic conditions, and I should, I
thought, be able to learn something from the experiment.
12. It was understood that the Hawaiian Mutual Agencies
should act as my agents iu the floatation of any real estate
or other proposition that I might submit on such terms as
may subsequently be agreed upon. Further they understood
from me that I was to put the soft pedal on the sale of their
oil stock until such time as the Oil Company was registered
in the territory and all material contracts disclosed.
13. The real estate which I submitted was owned by the
Universal Construction Company, Limited of Victoria, B. C.
The Company owns approximately ?50,000.00 worth of houses
and land. I am the managing director of that Company and
I hold its general power of attorney. It was my intention to
get the the Company registered in this Territory with a view
towards carrying on a Home Building programme in Hono
lulu, but I refrained therefrom owing to the high cost of
labor, lumber, etc.
14. I understand company law; one of my first official ects
in this territory was to read and study the Territorial Com
pany Act. That act has not been in any way infringed so
far as The Universal Construction Company is concerned. It
was perfectly legal to take orders here for land in Victoria,
to have the orders executed and the business completed at the
Company's Head Office in Victoria. For this sort or work,
no license was necessary. One of the Hawaiian Mutual
agents, a hard worker took applications from three
small investors Their applications were declined by the Com
pany at Victoria not because they were small investors, not
because there was anything illegal about it, but because the
property applied for was not available. Their deposits were
ALL OTHERS, HOWEVER, WHO HAVE ENTERED
CONTRACTS WITH THE UNIVERSAL CONSTRUCTION
COMPANY, LIMITED, OF 7U FORT STREET, VICTORIA,
B. C. ARE HEREBY NOTIFIED THAT THEIR CON
TRACTS WILL BE ENFORCED TO THE LETTER OF
THE LAW, because every transaction was perfectly legal.
15. Having digressed somewhat in the two proceeding para
paragraphs we will return to the Sau Francisco and Mc
Murray Oil Refining Company. I should have mentioned
JJhat Mac's system of selling was to my mind fair and above
board. It may be summarized in the slogan : "ALL YE
WHO LOVE TO GAMBLE, COME AND TAKE A CHANCE
WIDOWS KEEP OUT." Another salesman had an en
tirely different plan. Ho gave "Guarantees" that is his own
personal "Guarantees" which he called a "gentleman's agree
ment", wherein he agreed to sell a prospective applicant's
share for him when the price advanced, guaranteeing the in
vestor anything from 100 to 300 per cent profit in the course
of a few months. Of course a business man would not be
lieve a story of that kind, but it is mainly among the working
,people that he plied his craft. On remonstrating one day
with him on this peculiar system of salesmanship, I elicited
the information from him that a certain capitalist of Kauai
had some years ago beaten his father o of several thous
and dollars, at least that's what he said. Therefore, accord
ing to his views, he had a grievance against the Island and
was bound to "get even". It's mighty poor philosophy," I
told him, "to get even for an injury done your father by filling
nnocent workmen with false hopes. Three months hence
yourself and your firm areliable to be in trouble." ."What in
H do I care", he retorted, "I won't be here iu three months."
"What about your clients?", I queried. "They are living
in hopes of getting their money back with a big profit in
three months, only to find their hopes blasted."
"Yes, but look at the amount of pleasure they've had dur
ing those three months expecting it" he laughingly answered.
10. Subsequently, however, I learned that he was mainly
instrumental for a gigantic mixup wherein almost the whole
community in and around Lihue appeared to be emmeshed in
a whirlwind of hot gossip involving "oil stock", Victoria land"
'Tar sand", "Oil Company property not in Tar zone", "No
license to do business", etc, etc. This 1 was asked by some
stockholders to straighten out by getting at the "crux" of the
whole affair" and to explain it through the "Garden Ieland."
17. I was at that time unable to get the information sought
for by the stockholders and myself. Since then, however,
I've had several interviews with the officers of the Hawaiian
Mutual Agencies, the last was iu their office on March 31st.
At every interview I was regaled over and over again
with "authenticated information of mining and geological re
ports officially authorized by order of the Parliament of Can
ada, and by official and reliable maps and by reports of
world renowned authorities."
And over and over again I told them that all that inform
ation could be obtained in any public library what the stock
holders wanted as expressed by a leading stockholder who
was evidently posted by his Banker was to get at the "crux
of the situation" to ASCERTAIN THE CONTENTS OF ALL
CONTRACTS BETWEEN THE COMPANY, TIIE PROMO
TERS, AND TIIE MEN WHO ARE HANDLING TIIE
This they refused to disclose.
The following information however I obtained from Mr.
a. The Oil Company's property IS in the Tar Sand region,
which which kills the report to the contrary.
b. The samples of oil and tar shown by salesmen were taken
from the property which is also contrary to report.
c. Harry C. Noonan is not a trustee of the Company as I be
lieved and the shares sold are his own pefsonal property. He
stated that he purchased 250,000 shares from the Company for
which he paid the sum of $200,000.00 through the Bank of Ha
waii, Ltd. This is equivalent to eighty cents a share. If this
statement be correct it appears to me Mr. Noonan is entitled to
the confidence of his stockholders.
In any case my personal offer of a refund of commission is
Names not sent in within thirty days after first publica
tion, which was March 22nd, 1021, shall be forever barred.
JAS. A. CAVA NAG n.