Wall Street History

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Wall Street History

01/31/2003

Oscar Hartzell, Part I

This is the story of Oscar Hartzell, one of the world’s greatest
con men, as well as one of the least discussed. Hartzell plied
his trade primarily in the 1920s and 30s and it’s estimated he
swindled between 70,000-100,000 Midwesterners.

Hartzell’s game revolved around the “disputed” estate of the
great explorer / pirate, Francis Drake. As I am currently sailing
the oceans blue myself these days, it only seems appropriate that
I write about Drake, too.

It was back in 1572 that the unsung English seaman of common
background made his mark when he led a small expedition to
Panama, attacking shipping and coastal settlements along the
way. The Spaniards had moved into these parts and Drake ended
up hauling off a great deal of treasure, particularly gold.

Well, wouldn’t you know that King Philip II of Spain was rather
ticked off. He was the world’s leading monarch and this was his
treasure. On the other hand, England’s Queen Elizabeth was
ecstatic upon Drake’s return so it was decided that Drake would
launch a 2nd expedition, which was to be far better financed.

Francis had 4 well-armed ships under his command and it would
become one of sailing’s epic feats as he was the first Englishman
to circumnavigate the globe, passing around Cape Horn, up to
what is today northern California, then across the Pacific, the
Indian Ocean, the Cape of Good Hope and back up to Europe a
journey of two years.

Of course this wasn’t merely a pleasure cruise. I did note they
were well-armed, after all, and wouldn’t you know that along the
way Francis attacked and plundered all manner of settlements
and ships, including the coast of Peru, where the Spaniards had
no defenses because they didn’t think anyone would approach
from that side.

So imagine how thrilled Queen Elizabeth was when Drake
returned in 1579. It was said that investors made 4,700 percent
on this voyage. As for the Queen, while publicly she didn’t want
to gloat, England not being at war with Spain at the time, nor did
she want one, Elizabeth took about 100,000 pounds as her share
of Drake’s loot; close to $1 billion in today’s money. The good
captain was knighted and the Queen used the 100,000 to lay the
groundwork for a foreign investment fortune, as England began
to grow into a colonial power. Needless to say, however, King
Philip of Spain was calling Drake a mere pirate and a price was
placed on his head.

Drake, of course, made a ton of money himself and led a good
life, buying up vast chunks of land. But he would die at sea on
January 28, 1596. Despite being married twice, though, he had
no children, so most of his property and money passed on to his
brother and nephews.

Well, it only seemed natural that over time many questioned the
validity of the will. Some wanted a big chunk for themselves,
others simply wanted to scam the dimwitted. By the 1880s, there
had been quite a few schemes, actually, so many that American
officials were moved to warn the public.

The invention of the telephone and the telephone directory also
contributed in a major way to the swindlers efforts, who sent
wires to all the Drakes they could find, informing them that they
were legitimate heirs. Then a few days later a second letter
would arrive from a firm of London solicitors, confirming their
claim but asking for funds to settle the final stages of the
litigation.

The media played its part, too. In 1906, for example, the Ohio
State Journal was proclaiming that a Columbus man, a
descendant of Sir Francis Drake, had received word that a
division of the estate was soon to take place. The Bank of
England itself was going to be releasing all the jewels and
money.

Meanwhile, Oscar Hartzell had been born in the 1880s, an Iowa
farm boy. By 1915 he was part of a group that was asking
donors to trust him that he could deliver the Drake goods. As
time went on, Hartzell became the mastermind of the scam,
operating out of London, while employing his agents in
America’s heartland. By now the estimates for the Drake
fortune, Hartzell’s, that is, were $100 billion.

We’ll continue our story next week.

[Source: "Drake''s Fortune" Richard Rayner]

Brian Trumbore

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