Napoleon Hill Pimping Fraud In 1919

FinancialWorld1919700

From the November 10, 1919 issue of Financial World comes this dirty tidbit

Finally Rounding Up Cox

Our readers are familiar with our constant efforts to expose the fraudulent financial operations of S. E. Cox, of the Prudential Securities Co., of Houston, Tex.

It will be pleasant news to them to learn that the Government has finally taken steps to stop Cox’s nefarious traffic. How the Government is going about it is more fully told in the following dispatch from Washington which we give herewith and which needs no elaboration on our part. It is more or less a replica of facts appearing in our columns on numerous occasions:

Washington, Oct. 14.—Charging fraud in numerous forms in the sale of Texas oil stocks and the promotion of oil companies, the Federal Trade Commission has issued a formal complaint of unfair competition against S. E. J. Cox and his wife, Mrs. N. E. Cox, of Houston, Tex.; Napoleon Hill, of Chicago, employed by Cox at $5,000 a year as advertising agent, and the Prudential Trust and Securities Company, the Prudential Oil and Refilling Co. and the General Oil Co.—now being promoted—all of Houston. Cox is president of the two organized companies and is to be president of the General Oil Company. The parties were directed to file answer with the commission by November 25.

Among the practices alleged to have been employed by the parties, as outlined by the commission in a statement today, were:

“Circulation of false, misleading and unfair statements concerning the assets, resources, financial standing and responsibility, business, progress and good will of the oil companies named in the complaint, and suppression of other facts relating to the companies.

“Publication in ‘Hill’s Golden Rule,’ a magazine published in Chicago by Napoleon Hill, in the April, 1910, issue, of an editorial entitled ‘An Interesting Man and His Wife Who Have Made $1,000,000 for Other People,’ which contained ‘numerous false and misleading statements, known by the respondents to be false and misleading, and published by them for the purpose of furthering their plans and purposes.

“S. E. J. Cox informed parties inquiring as to stock of the Prudential Oil and Refining Company that that stock had been withdrawn from the market, using language to mislead his inquirers to believe the stock had been withdrawn because of its value, ‘when he knew at the time that the stock was withdrawn because of the warning of the Capital Issues Committee against further exploitation; that along with the information so given he recommended and urged such inquirers that they invest in the stock of the General Oil Company.’

“Publications in Houston by Cox, his wife and Napoleon Hill of a magazine called ‘Truth,’ in which they ‘greatly exaggerated fortunes to be made out of oil stocks.’

“Circulation of advertising fraudulently guaranteeing that the General Company would pay purchasers of its stock subscriptions 2 per cent dividends monthly on earnings on its oil production.

“False representation to the public by S. E. J. Cox that he was holding in trust checks amounting to more than $1,025,000 to be used for the payment of scholarships for worthy and needy boys and returned soldiers, and that the said checks represented dividends received by himself from the earnings of the General Oil Company

“Fraudulent representation that the Prudential Trust and Securities Company had, in the year 1918, paid a stock dividend of 200 per cent, and that from then on the company would pay out of its earnings a dividend of 5 per cent per month, with the prospect that these dividends would increase shortly to 10 or 20 per cent per month.”

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FinancialWorld1919759

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4 Comments

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4 responses to “Napoleon Hill Pimping Fraud In 1919

  1. JB Hill

    Per the Cox story: Napoleon Hill was contracted to advertise the Cox business offerings. Cox provided Hill with the information but Napoleon had no idea that the information he used t5o advertise was fradulent. Hill was called to testify against Cox but he himself was never even charged. JB Hill

    • mikecane

      Thanks for clarifying that. I didn’t expect him to know the exact details of what was going on that led to the indictments.

  2. Your blog posts on Napoleon Hill are the closest I’ve seen to an expose of that huckster, that promoter of predatory capitalism, that apologist for the robber barons. The damage that he has done in shaping popular American consciousness, American values, is huge and enduring. Keep up the fight.

    • mikecane

      Well, it might seem like that, but I have a different view of him.

      Yes, he admired wealth, but his advice was really to help people discover some of the common factors that could — ideally — lead to wealth.

      I think he should be looked at with a skeptical eye, however, because I’m not sure the Carnegie meeting ever happened (a Carnegie biographer said it was “bullshit”). Plus, Carnegie’s initial fortune came via insider trading — something Hill likely didn’t know.

      I don’t think Hill was ever evil or a con man. I think he tended not to know the entire story behind how wealth was built by the titans. I also think he loved the idea of getting paid to give advice — and so mimicked Charles Haanel as much as he could.

      Hill’s own continuing record of failure should make people question his advice and look deeper into what he was advocating — especially when it turns out not to work for them, personally.

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