Samuel Pandolfo
Encyclopedia
St. Cloud, Minnesota
St. Cloud is a city in the U.S. state of Minnesota and the largest population center in the state's central region. The population was 65,842 at the 2010 census. It is the county seat of Stearns County...
. During the next two years, the plant turned out 737 automobiles and fulfilled numerous U.S. government war contracts. Yet by 1919, Pandolfo was out of business. Found guilty of mail fraud, Pandolfo received a three-year prison sentence in Leavenworth Federal Penitentiary, and his company was ultimately closed.
The government claimed that Pandolfo defrauded the 70,000 stockholders in his company by sending them misleading information. Among the charges was one that a company flier included a “plane’s eye view’” of the Pan Motor Car Company that wasn’t actually drawn in an airplane.
Others have countered that Pandolfo was done in not because of his business practices, but because of his beliefs. Pandolfo had the vision to believe that the average person could own shares of stock, and he eagerly sold it to them.
Pandolfo’s career as would be auto-magnate/federal prisoner began in 1899 when he became the superintendent of schools in Las Cruces, New Mexico Territory
Las Cruces, New Mexico
Las Cruces, also known as "The City of the Crosses", is the county seat of Doña Ana County, New Mexico, United States. The population was 97,618 in 2010 according to the 2010 Census, making it the second largest city in the state....
. He began selling insurance on the side in 1901, and soon discovered that he "made more money in three months selling insurance than I had made in three years teaching school."
Pandolfo eventually quit his job as superintendent to form the Pandolfo Insurance Company which covered all of Texas
Texas
Texas is the second largest U.S. state by both area and population, and the largest state by area in the contiguous United States.The name, based on the Caddo word "Tejas" meaning "friends" or "allies", was applied by the Spanish to the Caddo themselves and to the region of their settlement in...
, Oklahoma
Oklahoma
Oklahoma is a state located in the South Central region of the United States of America. With an estimated 3,751,351 residents as of the 2010 census and a land area of 68,667 square miles , Oklahoma is the 28th most populous and 20th-largest state...
, Arizona
Arizona
Arizona ; is a state located in the southwestern region of the United States. It is also part of the western United States and the mountain west. The capital and largest city is Phoenix...
. and New Mexico
New Mexico
New Mexico is a state located in the southwest and western regions of the United States. New Mexico is also usually considered one of the Mountain States. With a population density of 16 per square mile, New Mexico is the sixth-most sparsely inhabited U.S...
. Pandolfo claimed that he placed nearly $100 million on the books of the companies he represented. He disbanded his company after a crop failure in 1916, and turned his sights to the motorcar business.
Pandolfo was no stranger to the newfangled contraption known as the automobile. Indeed, he had owned 37 of them in his 15 years in the insurance business, and he had very particular opinions of what constituted a good car. It needed high clearance for the back roads of the day, should have provisions for accommodating the driver overnight if that were required, and should have the ability to carry extra supplies that might be needed in sparsely populated areas.
Pandolfo incorporated his company in Delaware, and began selling shares of stock for $10. Half of this money went into what Pandolfo called a “surplus fund” and was used to pay stock sales commissions and company expenses. The other half went into the company’s capital fund. The stock’s par value of $5.00 was clearly printed on each of the stock certificates.
Pandolfo selected St Cloud, Minnesota, as the site for his plant because of its proximity to where most of the world’s iron-ore was then being mined, access to two major transcontinental railroads, access to a fine deep-water port in Duluth, Minnesota, a well-trained work force that was free of labor union issues, and a ready supply of electrical power generated by the Mississippi River.
St Cloud residents remember a Fourth of July picnic that Pandolfo threw in 1917 where 15,434 pounds of beef that required a whole railroad car to ship were bar-b-qued for the crowd. St. Cloud residents are also familiar with the part of their city dubbed “Pantown” were Pandolfo erected 58 first-class homes as housing for his growing labor force. He also began production of his Pan-Model 250, the first model produced by his new factory that covered 22 acres (89,030.9 m²) of land, and included a huge drop-forge plant, the biggest in the U.S. east of Chicago.
Pandolfo’s troubles began when the Associated Advertising Clubs of Minneapolis, a forerunner of the Better Business Bureau
Better Business Bureau
The Better Business Bureau , founded in 1912, is a corporation consisting of several private business franchises of local BBB organizations based in the United States and Canada, which work through their parent corporation, the Council of Better Business Bureaus .The Better Business Bureau, through...
, lodged a complaint with the State of Minnesota that Pandolfo was spending more on promotion than its Minnesota Charter permitted. The complaint was dismissed, but on November 16, 1918, a federal grand jury in Fergus Falls, Minnesota
Fergus Falls, Minnesota
Fergus Falls is a city in and the county seat of Otter Tail County, Minnesota, United States. The population was 13,138 at the 2010 census.-Today:...
, indicted Pandolfo on four counts of "using the mails in furtherance of a scheme to defraud.” Pandolfo demanded an immediate trial on the charges, and when the government asked for more time to prepare its case, U.S. Judge Page Morris dismissed the charges.
Despite the dismissal of the case, the matter had slowed the sale of stock, and the Pan Motor Car Company was in need funds to launch full-scale production of its premier Pan Model A. Pandolfo went on a whirlwind tour to promote this vehicle. It was Pandolfo's dream car. It had high clearance to negotiate just about any roadway, fold-down seats that transformed into a bed, and contained an ice chest to carry food and other refreshments. A flood of pamphlets and mailings were produced and sent out during this time period to promote the vehicle, and it was these promotional materials that ultimately did Pandolfo in.
On February 1, 1919, a federal grand jury in Chicago indicted Pandolfo, and all officers of the company, with seven counts of mail fraud for sending misleading materials through the federal mails. The case was heard by cantankerous Judge Kenesaw Mountain Landis who made several rulings hostile to Pandolfo. Ironically, the week the trial took place, the Pan Motor Car Company went into full production of the Pan Model A, and by the end of that month, 70 cars had been produced. Nevertheless. the jury was made to believe that the company was a sham, a shell company organized for no other purpose than to sell stock.
Pandolfo was convicted, and mounted an aggressive appeal of his case. The company continued to produce Pan Model A cars in his absence, but publicity of the trial affected public sentiment so greatly that it was impossible to sell additional stock needed to raise much-needed capital. The Pan Motor Company eventually closed for lack of funds. On April 5, 1923, Samuel Pandolfo surrendered to Chicago authorities, and was taken to Leavenworth Federal Penitentiary, where he served 2 years of a three-year term.
Upon his return to St Cloud, Minnesota, in October 1926, he was greeted by some 600 well-wishers and a brass band. He summed up the affair with his comment, "You don’t meet a crook with a brass band.”
Of the 737 Pan cars produced, only 5 are known to still exist; three by private owners (two in Minnesota, one of which can be seen in the Stearns County Museum, and one in New York), one by the Pantowners Car Club in St. Cloud, MN, and one in the AACA Museum in Hershey, PA.
As for Judge Landis, he was appointed the first commissioner of baseball
Commissioner of Baseball
The Commissioner of Baseball is the chief executive of Major League Baseball and its associated minor leagues. Under the direction of the Commissioner, the Office of the Commissioner of Baseball hires and maintains the sport's umpiring crews, and negotiates marketing, labor, and television contracts...
in November, 1920 following the "Black Sox Scandal
Black Sox Scandal
The Black Sox Scandal took place around and during the play of the American baseball 1919 World Series. Eight members of the Chicago White Sox were banned for life from baseball for intentionally losing games, which allowed the Cincinnati Reds to win the World Series...
". A commission of several members had originally been proposed, but Landis demanded that he be the sole representative, and that he be given lifetime tenure. He
refused to relinquish his federal judgeship even after being censured and threatened with impeachment by the House Judiciary Committee, where the lone dissenting vote against censure was cast by Minnesota Representative Andrew Volstead
Andrew Volstead
Andrew John Volstead was an American member of the United States House of Representatives from Minnesota,1903–1923, and a member of the Republican Party. His name is closely associated with the National Prohibition Act of 1919, usually called the Volstead Act...
known for authoring the Volstead Act
Volstead Act
The National Prohibition Act, known informally as the Volstead Act, was the enabling legislation for the Eighteenth Amendment which established prohibition in the United States...
, or the law enforcing Prohibition
Prohibition
Prohibition of alcohol, often referred to simply as prohibition, is the practice of prohibiting the manufacture, transportation, import, export, sale, and consumption of alcohol and alcoholic beverages. The term can also apply to the periods in the histories of the countries during which the...
. Landis finally resigned from the federal bench in 1922.
Pandolfo suffered a stroke in December, 1959, and died January 27, 1960, in Fairbanks, Alaska
Fairbanks, Alaska
Fairbanks is a home rule city in and the borough seat of the Fairbanks North Star Borough in the U.S. state of Alaska.Fairbanks is the largest city in the Interior region of Alaska, and second largest in the state behind Anchorage...
.
The Pan Motor Company Office and Sheet Metal Works building on 33rd Avenue North, St Cloud, Minnesota, still stands, and is listed on the National Register of Historic Places
National Register of Historic Places
The National Register of Historic Places is the United States government's official list of districts, sites, buildings, structures, and objects deemed worthy of preservation...
.