Automatic Age

THE AUTOMATIC AGE
Vol. 1
CH IC AG O , M A Y , 1926
No. 10
19 OF A U T O M A T IC PIE V E N D IN G
M A C H IN E C O M P A N Y
IN D IC T E D IN M A IL F R A U D
St. Louis, Mo.— Nineteen officers,
directors and fiscal agents o f the
Automat Sales Company and the
Autom at Service Company, promoters
o f the “ Sunny Jim” automatic pie
and sandwich
vending
machines,
which failed last October, with losses
o f $450,000 to several thousand St.
Louisians, were indicted by the fed­
eral grand jury on charges o f using
the .mails to defraud.
nearly $3,000,000 was invested in the
project by citizens o f that state.
Both concerns were incorporated
in Nevada and nearly 3500 o f the ma­
chines, which were purchased in Chi­
cago fo r §16 each, were sold to St.
Louisans fo r from $125 to $200 each.
Only 1100 o f the machines were
delivered to St. Louis, however, the
remainder being paid fo r both never
received.
Termed Gigantic Fraud
Residents o f St. Louis, it was
learned, comprise at least one-half o f
the defendants in the case, which
heretofore has been characterized as
“ one o f the worst frauds ever perpe­
trated upon the citizens o f St. Louis.”
The indictment, it is understood,
also charges the defendants with con­
spiracy to use the mails in further­
ance o f a scheme to defraud. The
fraud charge is punishable by a max­
imum penalty o f five years’ imprison­
ment and $10,000 fine, whereas the
conspiracy section carries a maximum
Punishment o f two years in prison
and $10,000 fine.
Capiases were ordered issued and
amounts o f bonds fixed fo r those in­
dicted who are expected to be ar­
rested this week and who are ex ­
pected to give bail fo r trial at the
March term o f the United States Dis­
trict Court here.
Scheme Failed in California
It was learned that both o f the
companies were organized by the
same group o f defendants and oper­
ated in St. Louis from April to O cto­
ber o f last year after similar experi­
ments had failed in California, where
$385,000 Profit Realized
Net profit o f $385,000 was realized
on sale o f the machines by the A uto­
mat Sales Company, which used
“ high-pressure” salesmen and branch
managers to sell the machines, but
the Automat Service Company, which
kept the machines in supplies, lost
heavily and filed a voluntary petition
in bankruptcy last O ctober 13.
A ccording to investigators, only
$1,000, as required under the Nevada
law was paid in as capital stock when
the companies were organized, and
stockholders o f the sales con'rem re­
ceived $30,000 in dividends in five
months or a return o f more than
7000 per cent on their original in­
vestment.
It is understood that numerous
representations o f $100,000 capital
stock and the earning capacity o f the
machines, which were installed in
drug stores, shops, office buildings
and even police stations, sent in liter­
ature through the mails, form the
basis o f the indictment fo r alleged
mail fraud.
A void Blue Sky Law Here
The companies were able to avoid
the "blue sky” regulations o f Mis­
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