E.G. Lewis, An Autobiography
December 31, 1969
Taken from the booklet titled " E.G. Lewis....Fraud or Friend?"
Copyright 1967 Wilkins Creative Printing
I was born in Connecticut, son of an Episcopal clergyman, grandson and great-grandson of Episcopal clergymen. My father's successive parishes were at Watertown, Connecticut; Church of the Nativity, Philadelphia; Christ's Church, Meadville, Pennsylvania; Trinity Church, Wilmington, North Carolina; Old Trinity and St. Bartholomews in New York City; and, for the last twenty years or his life, St.John's Church in Bridgeport, Connecticut.
I went to private schools, a military academy, and then at the age of nineteen to Trinity College, Hartford, Connecticut, for three years. I left college to go into business for myself and then took a position as general salesman for the Waterbury Watch Company.
I was married at Baltimore in 1890 to Mabel G. Wellington and then went into business for myself in Nashville, Tennessee. In 1898 I became associated with the Moffatt-West Drug Company, wholesale druggists in St. Louis, Missouri.
I started my first publication, The Womans Magazine, in 1901.In four years this magazine had attained the largest circulation of any publication in the world (1,600,000 copies each issue). I then purchased the Womans Farm Journal, increased its circulation to 600,000 and started several other monthly journals, all of which were successful money makers.
My publishing plants and their equipment cost approximately $1,000,000 while the value of my periodicals and newspapers at that time was set by competent appraisers at $15,000,000. I incorporated my model town as University City and organized a correspondence school for the readers of my journals, enrolling more than 60,000 students in its free courses.
I was unanimously elected the first Mayor of University City and unanimously re-elected for seven years. University City now has (1929) a population of 45,000 with an assessed value of $50,000,000. The City has just recently named its new high school and park after me.
In undertaking to build a subway for St. Louis I incurred the bitter hostility of local transit powers and financiers.
In 1905 approximately 100 of the foremost men of St. Louis were the only stockholders of my publishing company, holding one-sixth of the capital stock while I owned the remaining five-sixths. At this time with the full power and nation-wide influence of my journals and new spa pus (numbering at least one subscriber in every town of 50 inhabitants in the United States and Canada) I vigorously advocated three measures which were considered extremely advanced and visionary. These were women's suffrage, a postal bank, and a parcels post.
Considering women's suffrage ultimately certain, I organized 108 of the leading periodicals of the country into a league of which I was the head and undertook the organization of the Woman's Republic. This was a great national school in administration, politics, and government for women in preparation for suffrage. The Republic had national and state organizations exactly parallel to those of the United States.
(the number of subscriptions to league periodicals being the determining factor in the building, etc. Ed note).
Failing to get parcels post and a postal bank system adopted by congress I organized the Peoples United States Mail Bank with $5,000,000 capital. More than 3,000 local bankers were stockholders in my mail bank, the first in America, with a small remittance draft system competing with the express money order.
At this time, 1904-05, a bitter controversy was raging between the periodicals of the country circulating by mail and the Post Office Department over the so-called abuses of the second class postal rate. This controversy got centered on me (somewhat as the recent war did on Belgium) as then the foremost periodical publisher in America.
The controversy became very bitter and very personal and got mixed into politics. Both my mail bank and my publishing concern became the center of attack by the Post Office Department. My bank was twice forced into receivership by the department without a complaint from any stockholder or depositor, and was finally wrecked by being denied the use of the mails, although its board of directors was composed of presidents of other St. Louis banks and other prominent men.
After two receiverships the bank paid its depositors in full and its stockholders 87 cents on the dollar. The receivership having been declared to have been unlawful by the Supreme Court of Missouri, the costs were assessed against the State of Missouri which, however, never paid them.
The Federal Government declared that "all men of St. Louis and St. Louis County were so prejudiced against the government (in my case) that it could not get a fair trial." The final jury was drawn from remote rural districts with the same result.
As the final act of aggression my journals of national circulation valued at millions of dollars were wiped out by denial (to them) of second class mail rights on March 4, 1907, the day that Congress adjourned. The rights were restored when congress convened in October but in the meantime my publishing business had been wrecked.
In 1910 Congress appointed a special commission to investigate the attacks upon me and the destruction of approximately $20,000,000 of property during the seven years. This commission sat for ten months and rendered a verdict completely exonerating me and severely censuring the Post Office Department. This opened the way for recovery of full indemnity from the Federal Government but I did not attempt to obtain the indemnity as I was now penniless and found that indemnities awarded for claims in connection with the Revolutionary War, 100 years ago, were still unpaid.
(The Congressional Committee referred to was the Ashbrook Committee and its findings and recommendations are contained in House Resolution No. 109. Ed note)
For this purpose I selected Atascadero Rancho in San Luis Obispo County and purchased it for approximately $1,000,000 with the backing of my former investors in St. Louis (I had arrived in California with only $2,000 of borrowed money in January, 1913).
I organized a planning commission of leading California experts including Professor E. J. Wickson of the University of California, Professor H. T. Cory, one of the foremost engineers of America and others of like standing, to plan the entire community of forty square miles.
The forests were cleared, 4,000 acres of orchards were planted, 100 miles of fine roads and streets constructed, and approximately $1,000,000 spent on schools and public buildings. Approximately $3,000,000 was spent in the building of private homes by well-to-do families from the East and Middle West.
Then in 1914 the World War broke out, but for a time it did not affect the development work; but as it went on things became increasingly difficult and when we joined the war the sudden panic completely upset all plans. I had sold thousands of estates and contracted for work at fixed prices and the cost of labor and materials began doubling.
Construction and development matters were now at a standstill, but interest, upkeep, taxes, and carrying charges kept right on and began to mount by the hundreds of thousands of dollars until I was heavily in debt.
I proposed to all concerned that as the government urged all citizens who could to develop mining and oil resources, that we go into mining and oil while the war was on. I borrowed several million dollars on my personal notes, purchased a number of mines, approved for me by well-known mining engineers, a large chemical works at Oakland, and when oil was discovered in Montana, was one of the first to enter that field on a large scale.
I acquired 16,000 acres of leases on what is now the Sunburst-Kevin oil fields, but on the advice of eminent geologists, abandoned it and took over the leases on Alkali Dome, Wyoming. I drilled many wells without success. Meantime, at the urging of the government who sent a special commission to me for that purpose, I undertook the supplying, under government contracts, of immense amounts of dehydrated vegetables to the army.
To accomplish this latter work I built the largest dehydrating plant in the world in Atascadero. With the ending of the war, the government cancelled its contracts for dehydrated products by wire, causing me immense additional loss as I had contracted ahead for the growing of enormous amounts of onions and other vegetables on the good faith of the government contracts. The great plant became a total loss.
Heavy losses were also incurred in the mining and oil ventures. The bottom dropped out of the market price of copper, manganese and other war metals when the war ended and the government repudiated its contracts.
During the war I had been appointed and had served as Director of Organization for California for the Federal Food Commission, serving at my own expense. I had raised approximately $500,000 for Liberty Bonds. Atascadero sent 80 young men to the war.
Early in the war I had established the Illustrated Review, printed by the new rotogravure process, building and equipping one of the only two plants in America. The Illustrated Review was devoted to picturing (among other things) the World War on all fronts and its circulation quickly reached 600,000 copies. The San Francisco Sunday Chronicle rotogravure supplement was also printed by me in this plant at Atascadero. Almost all rotogravure supplements on the Pacific Coast are now printed on remains of my former Atascadero plant and equipment.
In 1921 a representative of Mr. Frank Vanderlip of New York, former Assistant Secretary of the Treasury and President of the National City Bank of New York, was sent to me at Atascadero to ask me to consider undertaking the purchase and development of the Palos Verdes Estates of 16,000 acres, extending from Redondo to San Pedro in Los Angeles County, owned by Vanderlip and his associates.
After inspecting the property I contracted its purchase at a price of $5,000,000 ($318 an acre), appointing the Title Insurance and Trust Company of Los Angeles, by approval of its president Mr. Brant, trustee. With the assistance of its officers and other experts I drew a trust indenture for its development as the most beautiful residential and educational city in the world, complete in all details, planned in advance, for an ultimate population of 150,000 people.
I employed eminent architects and engineers and organized them into a planning and construction staff. I succeeded in securing an underwriting subscription to the trust indenture notes of $35,000,000 for the undertaking. At that time some six million men were walking the streets of American cities seeking work. I reserved for myself from the project only certain stipulated fees based upon its success and I established a trust of these fees assigning them for the benefit of my creditors and former investors. If successful, those fees would ultimately twice over pay my entire indebtedness.
With success seemingly assured, I publicly offered to give to the University of California 1,000 acres of the estate and $1,000,000 cash to locate its southern branch at Palos Verdes. This immediately aroused bitterly hostile forces who planned its location elsewhere and heavy pressure was put on the title company to dissolve my trust.
Mr. Brant, the President of the Title Insurance and Trust Company, had recently died. After a thirty day bitter controversy the title company suddenly dissolved the trust, which it had a technical right to do under certain conditions. It returned the underwriting funds to the subscribers, wrecking the undertaking and causing me the loss of more than $1,000,000 expended in the preliminary surveys, planning and underwriting costs and commissions.
A mass meeting was immediately held by some 3,000 local underwriting subscribers who unanimously repudiated the act of the title company and made new underwriting subscriptions to a new trust. Approximately $6,000,000 of the underwriting was thus saved and 3,000 of the 16,000 acres of the Palos Verdes estates were purchased and developed. The Commonwealth Trust Company was at once chartered by Mr. Vanderlip and his associates to become trustee.
(and also changed from a magazine to a newspaper. Ed note) to one million subscribers of people in the East and the Middle West interested in coming to California to live.
The first Review Well came in a great gusher, but in a few days went to water from a nearby uncemented well. I then voluntarily drilled another well, and another, and finally drilled a total of fourteen wells on Signal Hill, Huntington Beach and in the Midway Oil Field in the effort to make good the original plan and offer. This effort cost $1,500,000 which I borrowed on personal notes.
Two of these wells were successful, but most of the others were still in the process of drilling, when without notice or any hearing of any sort I was forced into involuntary bankruptcy by a petition filed by an attorney representing approximately $12,000 of my indebtedness.
At that time I was effecting a merger of all my combined properties and interest of every sort to be equally divided between my creditors by means of a distribution prorata of the merger corporation capital stock. The bankruptcy proceedings, which I did not know of until three days after the granting of the petition, instantly stripped me of everything I owned in the world.
97% for my discharge in bankruptcy. At the hearing before the federal court, there not being a single protest, I was discharged.
The Vanderlip syndicate had meantime increased the price of the remaining acreage of Palos Verdes, which I had not been able to take over, to $25,000,000, although my original purchase agreement had been at $5,000,000 for the entire estate.
Nearly three years after the bankruptcy, I suddenly learned that an attack was organizing and that I would be first fraud ordered and then indicted. The attorney who had brought the bankruptcy proceedings had in open Federal Court informed the court which granted the petition, that the charges he had made to obtain the petition were based on information he had later found to have been absolutely false, and that although he had employed bank examiners and expert accountants at a great cost to investigate every dollar of my receipts and disbursements for the preceding fifteen years, he had found nothing whatever on which a charge of fraud could be based.
Postal inspectors removed from my former offices in Atascadero, to Los Angeles, hundreds of thousands of letters covering correspondence of the past fifteen years and in the summer of 1927 brought two indictments against me, based on largely technical charges of misstatements in the vast volume of printed matter issued in former years, charging conspiracy to use the mails to defraud.
I was represented by attorney.
to McNeil Island on my own account. I arrived here (McNeil Island Federal Prison) on May 1st (1928) but finding no commitment papers had arrived I was, however, permitted to remain.