After breakfast Ashbury went to his office as though nothing had happened. Tindle rode up with him in his car. I waited until they’d cleared out. Then I called a taxi and said I wanted to go to the Fidelity Building.
C. Layton Crumweather had a law office on the twenty-ninth floor. A secretary tried to find out something about me and about my business. I told her I had some money I wanted to pay Mr. Crumweather. That got me in.
Crumweather was a gaunt, bony-faced individual with a narrow, sloping nose down which his spectacles kept sliding. He was big-boned and under-fleshed. His cheeks looked as though they’d sunken in, and that emphasized the big gash that was his mouth.
“What’s your name?”
“Lam.”
“You said you had some money to pay me?”
“Yes.”
“Where is it?”
“I haven’t got it yet.”
Two deep furrows creased the centre of his forehead, and emphasized the length of his nose. “Who’s paying it?” he asked.
“Suckers,” I said.
The secretary had left the door open a crack. Crumweather looked me over with little black eyes which seemed unusually small for the size of his face. Then he got up, walked across the office, carefully closed the door, came back, and sat down.
“Tell me about it.”
I said, “I am a promoter.”
“You don’t look like one.”
“That’s what makes me a good one.”
He chuckled, and I saw his teeth were long and yellow. He seemed to like that crack. “Go on,” he said.
“An oil proposition,” I told him.
“What’s the nature of it?”
“There’s a lot of nice oil land.”
He nodded.
“I haven’t got title to it — yet.”
“How do you intend to get title?”
“With the money that’s paid in for stock.”
He looked me over, and said, “Don’t you know you can’t sell stock in this state unless you get permission from the Commissioner of Corporations?”
I said, “Why did you think I took the trouble to come here?”
He chuckled again, and teetered back and forth in the squeaky swivel chair back of his desk. “You’re a card, Lam,” he said. “You really are.”
“Let’s call me the joker,” I suggested.
“Are you fond of jokes?”
“No. I’m usually wild.”
He leaned forward and put his elbows on the desk. He interlaced his long, bony fingers, and cracked his knuckles. He did it mechanically as though it was a gesture he used a lot. “Exactly what do you want?”
I said, “I want to beat the Blue Sky Act and sell securities without getting an okay from the Commissioner of Corporations.”
“It’s impossible. There are no legal loopholes.”
I said, “You’re attorney for the Foreclosed Farms Underwriters Company.”
He looked at me then as though he was studying something under a microscope. “Go ahead.”
“That’s all.”
He unlaced his fingers and drummed with them on the edge of the desk. “What’s your plan of operation?”
“I’m going to put some good salesmen in the field. I’m going to arouse interest in the oil possibilities of this land.”
“You don’t own it?”
“No.”
“Even if I could beat the Blue Sky Act and get you the chance to sell the securities, I couldn’t keep you out of jail on a charge of getting money under false representations.”
“I’ll take care of that end.”
“How?”
“That’s my secret. I want you to beat the Blue Sky Law so I can have something to deliver when I call for the dough. That’s all you need to do.”
“You’d have to own the land.”
“I’ll have an oil lease on it.”
He chuckled again. “Well,” he said, “I don’t make a practice of handling such things.”
“I know.”
“When would you want to start operations?”
“Within thirty days.”
He dropped the mask. His eyes were hard and avaricious. He said, “My fee is ten per cent of the take.”
I thought that over a while. “Seven and a half,” I suggested.
“Don’t make me laugh. It’s ten.”
“All right.”
“What’s your first name?”
“Donald.”
He pressed a buzzer on the side of his desk. After a moment the secretary came in. She had a notebook with her. He said, “Take a letter, Miss Sykes, to Mr. Donald Lam. ‘Dear Sir: With reference to your suggestion that you wish to reorganize a corporation which has forfeited its charter to the State of California, it will be necessary for you to give me more specific data as to the name of the corporation, and the purpose for which you wish it revived. My fee in such a matter will be fifty dollars in addition to whatever expenses are necessary.’— That’s all, Miss Sykes.”
She got up without a word and left the office.
When the door had closed, Crumweather said, “I suppose you know how it’s done.”
“The same way you did it for the Foreclosed Farms Underwriters Company?”
He said, “Let’s not talk about my other clients.”
“All right. What do you want to talk about?”
Crumweather said, “You have to take all the risks. I’ll write letters confirming every conversation I have with you. I’ll give you letters which you are to sign. I have a list of certain old corporations which forfeited their charters to the State of California for failure to pay franchise taxes. I’ve carefully checked those old corporations. Naturally, you want one which didn’t do any business, against which there aren’t any outstanding legal obligations, and where the entire treasury stock — or a large part of the treasury stock — was issued.”
“What’s that got to do with it?” I asked.
“Don’t you see?” he said. “The Blue Sky Act prevents a corporation from issuing its capital stock until it has permission from the Commissioner of Corporations. After stock has once been issued, it becomes private property the same as anything else a man owns.”
“Well?” I asked.
He said, “And the state taxes corporations. Whenever they don’t pay their taxes, their franchise is forfeited to the state, and they can’t do business any more, but those corporations can be revived if they pay their back taxes and penalties.”
“Pretty slick,” I said.
He grinned — an oily, foxy grin. “You see,” he said, “those corporations are just the dead shells of former businesses. We pay the licence, taxes, and revive the corporation. We buy up the outstanding stock which has been issued... Never have to pay more than half a cent or a cent a share... Of course, there are only a few corporations which answer our purpose. I’ve made all the preliminary investigation. I know the corporations. No one else does.”
“Then why do you say in your letter that I’ll have to give you the name of the corporation?”
“To keep my hands clean,” he said. “You’ll write me a letter giving me the name of the corporation. I’ll simply act as your attorney, following your instructions... Understand, Mr. Lam, I’m going to keep in the clear — at all times.”
“When do you give me the name of the corporation?”
“When you have paid me one thousand dollars.”
“Your letter says fifty.”
He beamed at me through his glasses. “It does, doesn’t it? Makes it sound so much better, too. Your receipt will be for fifty, young man. Your payment will be one thousand bucks.”
“And after that?”