HIGH FINANCE: A Selling Fool

Nobody in Denver ever saw a salesman who could match bluff Fred Ward, 43, a 200-lb. slicker who “could talk a mole out of his hole.” He blew into town in 1939, soon landed a job selling Dodges. In two years, he was selling more Dodges than anybody else in the region, set up his own business, Fred Ward Inc., and started selling Hudsons. Soon he was distributor for Colorado, Wyoming, New Mexico and Nebraska.

Hudson, which gets about 2% of all U.S. auto sales, found itself getting 14% of all sales in Ward’s territory. In 1949, Ward sold 1,359 cars in Denver County alone; only Ford and Chevrolet sold more. He chartered planes to carry customers free to Detroit, where they could save the freight on their cars by driving them back. Hudson hailed this as one of the most successful promotion stunts in its history.

Ward lived in a manner befitting his success. At Hilltop Acres, his $200,000 estate commanding a spectacular view of the Rockies, he gave nightlong parties. Once, at 4 a.m., when a guest remarked that La Fonda Hotel in Santa Fe, N. Mex. served wonderful pancakes, Ward chartered a DC-3 and flew all his guests there for a pancake breakfast.

Ward knew everybody, including Colorado’s Governor Dan Thornton. When

Rancher Thornton sold a prize steer for a charity benefit (see cut), Ward cheerfully made the high bid of $6,000. Just as cheerfully, Thornton later lent Ward $10,000 for a quick deal in return for a postdated $12,500 check (the extra $2,500 was to be Thornton’s profit). The governor was puzzled when the check bounced.

Then other puzzling things began to happen.

Borrowed Horses. Denver’s U.S. National Bank, which had lent Ward a total of $476,000, made an inventory last summer of Ward’s stock of cars to see if it jibed with his statement to the bank. It didn’t. U.S. National threw Ward into receivership, discovered that his $539,000 of “accounts receivable” consisted of money that Ward owed to his own company. J. K. Mullen Investment Co., which had gladly lent Ward another $200,000, also tumbled into receivership.

Then Reporter Wayne Phillips of the Denver Post began checking the facts of Ward’s phenomenal “success story.” Phillips discovered that Ward had served nine months in the state penitentiary in 1939 for forgery. And Ward’s racing stable, with which he had made a great hit with the local horsy set, was actually owned by Colorado’s big-time gambler O. E. (“Smiling Charlie”) Stephens, whom Ward had met in the pen. Reporter Phillips turned up another interesting fact: Ward was paying a $500 a month “consultant” fee to Lester Hall, executive vice president of U.S. National Bank, which had made him his biggest loans.

Locking the Door. Last week a special grand jury indicted Ward on charges of defrauding Denver banks and individuals of $1,353,320. Hall was fired from the bank and also indicted. At the news,

Thomas Dines, who had retired as president of the U.S. National Bank four years ago and let his son take over the job, took a strong hand in bank affairs. His son stepped down to the vice presidency. In as president, to salvage the bank’s reputation, came one of Denver’s first citizens, Albert N. Williams, 63, ex-president of Western Union and Westinghouse Air Brake.

At week’s end, Ward was still living on his estate, and still selling. He was marketing a Dry-Gas fire extinguisher. “It’s just fine,” said Fred Ward, “a wonderful product, greatest thing for gasoline, grease and electrical fires I’ve ever seen.”