Business: Rice Resumes

Like many another man whose success has been extraordinary, George Graham Rice gave no hint of genius until he was past 30. Just when he abandoned his real name of Jacob Simon Herzig no one knows. His youth was punctured with one jail term for grand larceny and another for forging his father’s name to a check. Shortly after the turn of the century he founded Maxim & Gay, “Turf Information Bureau,” in Manhattan. His “information” was good and he often sold 5,000 tips a day at $5 each. Having a great love for the horses and no faith in his own tips, he soon dropped the $3,000,000 he had so quickly acquired. But he learned enough about sucker psychology to follow his true calling. And it was not long before he was rated the most successful and the most tireless stock swindler in the U. S.

His early promotions sent him to jail in 1910 in connection with the failure of a brokerage house and he swore he was through forever. He even wrote a big-seller, My Adventures with Your Money, exposing all the tricks of his trade. But back he came and this time for big money. To inspire faith among ignorant investors, his “financial” sheet, The Wall Street Iconoclast, attacked margin trading on the New York Stock Exchange, advised widows & orphans to keep their money in savings banks, recommended the purchase of sound listed securities. But the Iconoclast also managed to keep such Rice stocks as Idaho Copper, General Mining and Colombia Emerald constantly in his readers’ minds. He even had his own stock exchange, the Boston “Curb.” When Rice stocks soared, shareholders would receive telegrams from Promoter Rice exhorting them not to sell. Presumably that was just the time that Promoter Rice did his best selling, for he is estimated to have bilked the public of nearly $25,000,000.

On his own admission Promoter Rice has spent a total of $4,000,000 on lawyers’ fees in various attempts to keep out of jail, and his attorneys have included Max D. Steuer and onetime U. S. Senator James Reed.† But in 1928 George Graham Rice was convicted of using the mails to defraud in the sale of Idaho Copper shares and sentenced to Atlanta Penitentiary for four years. An additional five-year sentence was suspended on condition that he report regularly to a probation officer after release.

Last spring George Graham Rice arrived in Manhattan, suave, paunchy and in his usual high spirits. On leaving jail he had taken a pauper’s oath but reporters found him in a swank 16-room apartment. To a list of 200 names picked at random from among his Idaho Copper stockholders, he sent greetings and asked them if they were “meeting the challenge” of the New Deal. The response to this “feeler” was good.

This week George Graham Rice will have on the newsstands a successor to his defunct Iconoclast—a weekly called Rice’s Financial Watchtower, 25¢ the copy. Just what George Graham Rice will watch from his tower was not clear, but his sheet is “millitant and pro-Roosevelt.” Leading editorial in the first issue: “POWER & RESPONSIBILITY.” Excerpt: “Any man who wields power without recognizing his responsibility is a menace. Big Finance has been that. . . . [The Big Financiers] have cut away the sand from under their own feet and have dug their graves. In another year or so new laws and rapidly moulding public opinion will have pushed them into their graves and covered them up.”

Another typical Rice thunder was a $5,000 standing reward for proof that any one connected with the Watchtower had any interest in the stocks that the Watchtower recommends—at the time that they are recommended.

To subscribers Promoter Rice wrote that if the Watchtower “does not prove to be worth $500 a year … I will be inclined to grant . . . another year’s subscription gratis.” As a postscript he added: “I shall take occasion very frequently in the columns of the Watchtower to state my views as to the status of the Idaho Copper and Colombia Emerald Companies. I think what I shall have to say will prove of great interest to you.”

Idaho Copper went into receivership in 1929, was pulled out, then slipped in again in 1932. Its stock last sold in 1931 at 2/5 of 1¢ a share. Its production is nil. Colombia Emerald has some emeralds but its mine in the Department of Boyaca, Colombia is closed and its shares were lately quoted at 10¢ bid.

†In 1931 Promoter Rice was brought under guard from Atlanta to Manhattan to stand trial for evading Federal taxes on an alleged income of $1,800,000 in 1925. As his own attorney he won an acquittal.