Evening star. [volume] (Washington, D.C.) 1854-1972, 1883-02-03

HOW Chicago Shnrpers Impose On
Green Specuias0rs-rh0s.sa Of Dol.
lars Sent Through the MailS-Co.
operative Speculation.

The account OF the operations OF bogus broker
firms in Chicago, and their being placed on the
fraud list" by the Postmaster General, was pub
lshed in The STAR early in the week. There
was however, but brief mention made of the
extent and character of their operations, and as
these were Of a magnitude rarely reached by
such concerns further details will be of interest
Such details are given in the report Of the
special agent Of the Post Office depart
ment. D. A. Raw He says that the
receipts Of Fleming. Merriam & Co.,
one OF these firms, were simply enormous.
and the receipts of the four concerns ad an
of not less than $4,000. .'The firm of Fleming,
Merriam CO.have in the 20 days from January
1st, 1888, to January 90 1885, received through
the Chicago post Office IT'S registered letters
None of these letters contained less than So
and very many OF them contained amounts rang
Ing from 500 to $500. They have at the same
time received about $40 money orders, aggre-
eating $50, 416 They received last week over
$1,000 by express, and it is represented that
their receipts by express for the 20 days were
not less than $4,000. They have received
nearly $4,000 from all sources since January
LIST. In the same period of 20 days the firm of
Z. Z. Kendall i Co. have had cashed about 6S5
money orders for the sum of $15. 1867. and 53l
registered letters, none containing less than SO
and many from 500 to $500 Their business on a
fair estimate would aggregate $53 600 in 20
days. The other two firms Henri & Co. and
Cudworth & Co., probably aggregated $50, 600
during the same time"
THE MODE OF DOING BUSINESS.
As to the character Of the business the special
agent says that none Of the firms are known at
the state inspection department as In any way
connected with the actual grain trade sThe
pretense in their circular that they are commits
sion merchants is fictitious The principal fea-
ture of this fraud is this-they pretend to con-
duct what is termed by them mutual invest
ment club' or a mutual cooperative fund.-
composed of the money of suckers and green
horns who buy shares at SO each and take
the chances that the managers use the aggre-
gate funds subscribed by shareholders
In specializing in grain stocks. dc. The man.
ayers, every few days or weeks, make reports
showing that they have made or lost SO much
money: and If the latter, they return to share
holders pretended profit Of so much per cent.
They cannot show that they have ever made the
profits or losses they report by any reputable
proof What money they return as profits is
return Just what they think viii induce the
In some cases they have to small
investors returned as profits fictitious showing
OF large percentage of the Investment. The
result has been that such investors, mostly from
remote place and in distant states have been
induced to invest large amounts anew. Men
starting in with $40 or go have been induced.
By receiving flattering return miscalled profits.
to invest 800 or $500, and in many cases within
my knowledge as high as 81 600 or d 500. The
sole return they can ever get Is just what the
sweet will Of the fellows who run the concern is
disposed to send them"
THEIR LIBERAL OFFERS.
The circular issued by one of the firms Is
headed with the motto, Confidence and hon
esty between men are necessary sdjuncts to
success" They invite persons to buy 90 shares
in the fund, which is managed by the firm for
the benefit of every member. "The capital of
the fund Is suf1cient to operate In from $1,000
to 1O0, 600 bushels Of wheat or corn on margin
of from 10 to IS per cent. or 5000 barrels of
pork on q margin OF 81 to Is per barrel, and vet
leave reserve working fund for the better pro-
lection Of the business for additional trades, &C.
A notice win be sent to each shareholder
Of every transaction made in buying and selling
grain, DC. for the account of the fund; also
amount Of profits made during the week in
every trade, 80 that every shareholder win
know at all times exactly how the account of
the fund stands and will always know what
amount Of profit he has or loss II any. Our
plan OF operating in grain, pork, lard and
stocks Is the placing Of heavy margins and tax
Ing moderate profits for the daily variations q
they occur without waiting the sweeping risks
Of sudden and extreme nuctuati0ns The
profits made on each and every deal to be A.
posted In tho bank and not used"