"Bringing Up Father" Stock Manipulation Plot

[esquirecomics]

I am currently reading Hubert H. Crawford's "Crawford's Encyclopedia of Comic Books: A Review of the Good Old Days of Fun and Adventure for a Dime" (1978).

 

An interesting side note is that this book was published by Jonathan David Publishers, Inc., which was my grandfather Rabbi David Max Eichhorn's publisher for years. They primarily published Jewish related books. Interesting that they ended up publishing a book on comics!

 

In any event, the book is quite interesting. Some great facts and excellent cover and art reproductions. I have noticed quite a few errors that were surprising (years, issue #s), but minor I suppose.

 

While reading the chapter King Features Syndicate I came across information I had never heard before. Apparently the extremely popular comic strip "Bringing Up Father" was used to manipulate the stock market through the use of secret code wordst!!!

 

Here is one paragraph from the book:

 

The truth came out September 15, 1948 when the legal staff of the New York State Attorney General's office, then headed by L. Goldstein, finally broke the code after a ten-year investigation of a suspected link between "Bringing Up Father," often referred to as "the Wall Street comic strip," and the stock market. Action was taken against F.N. Goldsmith Financial Service, then the nation's largest stock broker, who had used the strip to manipulate various securities transactions in favor of its investment clients. It was found that the code within the comic strip was based on 800 key words, phrases and pictographs which, according to their arrangement in the comic strip panels, dictated price fluctuations of various stocks."

 

It was noted that no charges were brought against the strip's creator George McManus after he claimed he had no connection with the investment firm.

 

Unfortunately I could not find any court cases in Lexis/Nexis as I probably don't have the right database. I did find some old Time Magazine articles online that discussed the trial. These are published in the next posts so as not to overwhelm everyone in this one post.

 

Anyone know anything further about this matter?

[esquirecomics]

Time Magazine

 

The Forecaster

 

Monday, Sep. 27, 1948

 

The short, wiry figure of Frederick N. Goldsmith, 83, was as much a part of Wall Street as the pigeons on the Stock Exchange façade. For 50 years it had known his rumpled Panama hats, battered briefcase and friendly "Hi!" A successful man, he had made as much as $39,000 a year writing his market forecasts. Some 200 steady subscribers paid him up to $25 a month for his predictions.

 

Then Goldsmith came under the critical eye of New York State Attorney General Nathaniel Goldstein. In advertisements of his service, he had claimed to have "inside" information. The investigators, suspecting fraud, called in Goldsmith. Where did he get his "inside" information? What Goldsmith told them, reluctantly, made their eyes pop.

 

Good Medium. Back in 1916, he said, a spiritualist had put him in touch with the ghost of James R. Keene, the famed Wall Street plunger. Keene had tipped him off that the "insiders" rigged the market every day, using a code that in recent years had appeared in the Bringing Up Father comic strip. Said Goldsmith: "It took me an awfully long time to break the code, but once I did, it was simple to predict the market with 90 to 95% accuracy."

 

To illustrate, Goldsmith took a Maggie & Jiggs strip of last May. The first frame showed Jiggs with his right hand in his pocket. Explained Analyst Goldsmith: "A signal to buy."* Two rings of smoke were coming from Jiggs's cigar ("The market will go up in the second hour of trading"). In the second frame, Maggie is saying: "I don't see why you can't get your name in the paper, too" ("Buy International Paper"). In the last frame, Jiggs's cigar smoke is still rising, indicating a steady market at the close.

 

Maggie & Jiggs, said Goldsmith, had called the turn on a stock last June 15 when Jiggs said: "The intermissions are the only good things about this show." "Obviously," said Goldsmith, "that meant that Mission Oil was the only good buy." He so advised his customers, and two days later Mission Oil hit a new high. (Goldsmith also discovered tips in the Wall Street Journal's "Pepper and Salt" joke column.)

 

Medium Good. Was this system reliable? Goldsmith retorted: "I have seen it work time after time." Besides, he added with solemnity, only recently the late J. P. Morgan had passed on word, through a medium, that Goldsmith was doing fine. Goldsmith's customers thought so, too. When the investigators wrote to some of his clients, they had nothing but praise. "Uncanny predictions," wrote a New York Stock Exchange member. "Sound understanding," echoed a Boston broker. "There is nothing that touches it," said a Wall Street securities dealer.

 

What amazed investigators—and might well appall Wall Street—was that Goldsmith's comic-strip forecasts had been right as often as many solemn market guides that rely on the "science" of charts, trend lines, explosion points, recoils, double tops and double bottoms. Nevertheless, the Attorney General last week got an injunction stopping Goldsmith's forecasts—not because they came from comic strips but because he had not said so.

 

*Said amazed George McManus, aging (64) cartoonist father of Maggie & Jiggs: "What would I be doing with cartoons if I were so hot on the stock market?"

[esquirecomics]

Time Magazine

 

Tell Me, Ouija ...

 

Monday, Nov. 29, 1948

 

Market Tipster Frederick N. Goldsmith shook Wall Streeters two months ago by saying that his generally accurate tips came from a code in Bringing Up Father revealed by a spirit. In a Manhattan court hearing last week he took most of it back. The New York attorney general was trying to put Goldsmith out of business as a tipster. However, Goldsmith, veteran of 48 years of financial soothsaying, did admit that he had tried to get some spirit help, but had had no luck.

 

"My sister is a medium," he said. "I positively know we are able to communicate with our friends on the other side through what we call her telephone ear." But when the sister asked the friends to help Fred "make some money," the spirits replied: "We think Fred knows more about the stock market than we do."

 

Actually, Goldsmith testified, the market tip letter that earned him as much as $39,000 a year was based on stock market charts. He had said that the tips were based on Maggie & Jiggs only because "I was worried and confused and in a hurry to get out." And even if Maggie & Jiggs did suggest a tip, he insisted that he always checked it against his charts. That was why he had always been right on long-range predictions, though sometimes wrong on short-range ones. Said he: "Stocks always do what they ought to do, but they never do it when they ought to."

 

Goldsmith's customers eagerly defended him in court; one testified that he had made $150,000 on Goldsmith tips. A customers' man from E. W. Clucas & Co., a brokerage house, said that Goldsmith's market letter was the "best of them all." Would he have thought so if he had known the tips came from the comics, he was asked? The customers' man brushed that off as other witnesses had. It was not important. Said he: "I'm only interested in making a profit."

 

The only one, apparently, who had not made a profit was Goldsmith. He ruefully admitted that he had not followed his own advice—and had lost on the market.

[BLBcomics-migration]

Hi Mark

 

If it helps in tracking this scenario, i have photos of George McManus as an honored guest of the Bohemian Club in Northern California dating to the mid 1920s. McManus hob-nobbed with the rich and powerful for decades. He was an international super star.

 

I will try to find my GM pics and post them here - had an article with the pics too

 

I have to go dig out my Crawford's comics history book, which many had dismissed years ago cuz it contained too many errors of fact - it is long on enthusiasm though.

 

bob beerbohm

[Scrooge]

Apparently the extremely popular comic strip "Bringing Up Father" was used to manipulate the stock marke through the use of secret code wordst!!!

 

Mark, reading the articles you posted, I don't think the quote above is quite reflective of the matter.

 

I read it as: The tipster used comic strips to come up with Buy and Sell recommendations for his subscribers, instead of more "scientific" forecasting methods.

 

In the Temple of Efficient Market Theory, the results of either charting or comic strip divining should be the same in the long-run. Note that the subscribers didn't, after the fact, complain about the source of the recommendations as long as they made money. Not a surprise since, typically, anyone still subscribing must have been a winner. Now, if only the journalist had gone and interviewed people who let their subcription lapse ... I'm sure we'd heard far more outcry about the techniques used for the recommendations!

[esquirecomics]

Apparently the extremely popular comic strip "Bringing Up Father" was used to manipulate the stock marke through the use of secret code wordst!!!

 

Mark, reading the articles you posted, I don't think the quote above is quite reflective of the matter.

 

I read it as: The tipster used comic strips to come up with Buy and Sell recommendations for his subscribers, instead of more "scientific" forecasting methods.

 

In the Temple of Efficient Market Theory, the results of either charting or comic strip divining should be the same in the long-run. Note that the subscribers didn't, after the fact, complain about the source of the recommendations as long as they made money. Not a surprise since, typically, anyone still subscribing must have been a winner. Now, if only the journalist had gone and interviewed people who let their subcription lapse ... I'm sure we'd heard far more outcry about the techniques used for the recommendations!

 

Scrooge, the quote you referred to with respect to my description of the event was culled from Crawford's book. The two Time articles were the only items I could find (within five minutes of effort) that referred to the matter.

 

I don't know if Crawford's comments were accurate or not. On the other hand, I don't know if the Time magazine articles' contents are complete or not.

 

I am going to see if I can find more information about this very interesting scandal and will post it here.

[Scrooge]

Scrooge, the quote you referred to with respect to my description of the event was culled from Crawford's book. The two Time articles were the only items I could find (within five minutes of effort) that referred to the matter.

 

Sorry, I thought I was quoting you!

 

I am going to see if I can find more information about this very interesting scandal and will post it here.

 

Please share those with us if you come up with anything.

[esquirecomics]

Chillicothe Gazette (Chillicothe, OH)

 

March 17, 2004 Wednesday

 

SECTION: Pg. 4A

 

LENGTH: 614 words

 

HEADLINE: Good stock advice can come from anywhere

 

BODY:

John Fraim

 

Just remember. "Ghosts do fear no laws"

 

Tho. Nash

 

I have always been mystified when the government gets all upset by insider trading in the stock market. Sure it goes on and anybody with a lick of sense knows it. When a stock suddenly starts moving up, it won't be long before something is announced favorable to the fortunes of that stock -- a split, a takeover, something. Same when it goes down, only in reverse.

 

Now somebody was buying or selling that stock before the news about it was made public because they had been tipped off. You can bet on it. Somebody had some inside information. In fact, there are any number of "experts" on Wall Street who offer their services, or a newsletter, supposed to give tips on whether to buy or sell certain stocks. Their advice is supposed to flow from the "experts" ability to analyze the stock market and perhaps, just a little bit, on the "experts" ability to schmoose with the market insiders during a three martini lunch. In that respect, let me tell you the story of Frederick Goldsmith.

 

Back in 1948, Mr. Goldsmith was an investment counselor on Wall Street.

 

For 32 years, he advised his clients about what to buy and/or sell. His newsletter was expensive, but the advice it contained was right on, most of the time. He even had several stock exchange members among his subscribers. He made a bucket of money from his newsletter.

 

If he said buy, the stock was almost certain to rise. If his advice was sell, down went the stock. He made no secret of the fact he was well-connected, and in his advertisements offering his services, he actually mentioned he had "high sources." His advice was so good, too good perhaps, it attracted the interest of the New York state attorney general, who suspected there was something fishy going on with Goldsmith.

 

So Goldsmith was hauled in for questioning. When asked if he had inside sources advising him, Goldsmith replied yes, he certainly did. The attorney general began salivating. Here was his chance to make a name for himself, and -- who knows -- another crime-busting district attorney named Thomas Dewey wound up running for president!

 

The AG demanded to know the name of the insider who was leaking information. Goldsmith calmly replied his informer was a ghost! The shade of a man who had been well-known and very successful when he was alive. For some unexplained reason, he had come back to help Goldsmith with his stock advice business.

 

According to Goldsmith, the ghost told him insiders rigged the market every day using a code that appeared in a comic strip, the one called "Bringing Up Father."

 

The characters in the comic strip all contributed to the stock tips which allowed the insiders to make a killing every day. The tips could be in the angle Jiggs held his cigar or the number of puffs of smoke he emitted or other oddities which held the code about which stocks to buy or sell.

 

The attorney general, being a selfless public servant, had made certain the press was informed the district attorney's office was about to bust a big-time stock market insider when the investigation started, and Goldsmith's revelations put the AG between the legendary rock and a hard place.

 

Which was worse? That Goldsmith had been running a market service for 32 years based on information provided by a ghost and a comic strip, or that the service was more successful than most others. In either case, where was the law being violated?

 

The tempest soon died down and the teapot was returned to the shelf.

 

Best keep the story in mind, should you be tempted to make a killing in the stock market. Without good advice, you don't stand a ghost of a chance.

[Zonker]

Crawford must have been quite naive to pass along that anecdote as a factual attempt to manipulate the stock market by trafficking insider information. Then again, some so-called "technical analysis" predicting where individual stocks are going is almost as