The Railroad Land Agent Who Embezzled for Ten Years and Chose Suicide
A Northern Pacific land agent's decade-long scheme to skim payments on timber and farm contracts unravels into a $350,000 shortage — and a bullet.
Tacoma, May 14.—Special. After a month's investigation into the affairs of the late Paul Schulze, it is now known positively that his shortage is between $250,000 and $350,000. Tonight General Land Agent Cooper, of the Northern Pacific, gave out a statement of the result of the investigation so far. In the land department the shortage amounts to over $100,000, and it is thought that $150,000 will cover it. This includes the recently discovered shortage in the Northern Land and Development Company, of South Bend, and the Olympic Land and Investment Company, of Ocosta. Both of these were Northern Pacific enterprises, and Schulze was president of each. The shortages in these two companies were small. Seventy distinct cases of embezzlement have been discovered. The facts in each case have been transmitted to St. Paul as fast as accumulated. The cases range from $50 to the largest, being the embezzlement of a timber land contract. The method of the embezzlement was simply to hold out payments made by purchasers on land contracts.
Schulze in all cases, so far as known, gave various kinds of receipts or certificates of payment, and made no entry in his books. He, however, kept all the letters transmitting money, indicating that he expected at some time to make good the embezzlement. Some of these letters were found filed at home and others at the office. Receipts and certificates of payment, all made out in his private office and mostly in Schulze's own handwriting, were found. By this it is known that no one else was implicated. His system of embezzlement had been carried on for ten years. It is now believed by those who knew Schulze best that he had long ago determined that two courses lay before him: to make good the embezzlement by a lucky stroke in investments, or to end all by suicide. For years he had studied suicide, evidently to that end. Mr. Cooper believes that Schulze's private fortune was a myth, and that the money he invested in different enterprises was all misappropriated funds of the land department. As stated some time ago, in a few cases of large embezzlements the parties from whom money was withheld, after they had paid their money, became uneasy and made complaint to the land commissioner at St. Paul. Commissioner Phipps was on his way here to secure an explanation when Schulze committed suicide.
Mr. Cooper's statement tonight covers only the above transaction. From another source is learned the details of the Spokane syndicate deal, about which considerable has been printed of late. In 1890 the railroad company authorized Schulze to sell a large amount of acreage in Spokane. Schulze fixed the price on good lands very low and on poor lands very high, and sold to dummy buyers. The contracts for poor lands were never paid, and reverted to the company. Some time ago the good lands sold to the Dillman syndicate were platted, sold and deeds given. Schulze cleaned up a large sum in this deal. This, with the shortage in the land department, brings the total up to about $350,000.
“For years he had studied suicide, evidently to that end... two courses lay before him, to make good the embezzlement by a lucky stroke in investments or to end all by suicide.”
A trusted land agent skimming payments for a decade inside a railroad's real-estate empire is a reminder that the Pacific Northwest was built on land deals whose books were seldom audited. Today's corporate fraud cases and embezzlement headlines echo Schulze's double life — public respectability on the surface, ledger of theft underneath. The man who kept every incriminating letter 'to make good' is a familiar profile of the white-collar offender who never quite does.
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