The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1884-01-29
GENERAL MAoAULEY,s ARREST.
The Mutual Union Improvement Company
and Its Method of Operation.

New York Herald
A certificate of the incorporation of an associa-
ton known as the Mutual Union Improvement
Company" was approved in December last by
Judge Donohue, and was filed in the Office of the
county clerk according to law. General Daniel
Macauley. the president and general manager of
this company, was arrested yesterday by Anthony
Comstock and held in the Tombs Police Court
for examination on a charge of maintaining a
lottery. The incorporators of the association
were Edwin G.. Bruen William Cooper. Arvn l..
Barry and George G. Ward. 1t was authorized
to continue business for twenty five years. The
object of the company, as set forth in the circu-
lar. was 1.-THE accumulation of fund for the
purchase of real estate, paying off the incum-
ORANGES thereon the improvement and subdi-
vision thereof into lots or parcels suitable for
hOmesteads and the distribution of said lots or
parcels among the shareholders" The capital
stock was announced as being 81 10000 1t was
proposed to issue bonds to run for twenty years,
and to bear per cent. interest. These were di-
vided into series consisting of 100, 600 bonds
each, and representing $500, 600 Whole bonds
were advertised by circular at So, l-5 bonds at
81. and q bonds at 800 (club rates).
1t on the scheme of funding or the calling
in of these bonds that Mr.. Comstock based his
complaint The circular announces that on the
10Th of every February there would be a redemp-
ton of a certain percentage of the issued bonds.
The numbers of such bonds were to be deter
mined by an ingenious but, as Mr.. Comstock
alleges, illegal method. For example, in the
first redemption, the 18th prox, 10 bonds, it is
a
$40, 900 each 10 to $4,000 each 10 to 81 900 each,
100 to $780, 100 to $780, 100 to $780, 200 to $40,
1000 to $15, and 900 to $40. Instead of calling
in these bonds by number, which the circular
says is not fair plan, it proposes an original
system, involving the payments of premiums.
To determine who is entitled to the said premi-
ums an approximation is made of the amounts
of revenue receipts of the principal districts of
the United States $50 .@ sr5i
The method is best explained by the follow
ing extract from the prospectus:
Suppose that upon any given date we were to take
the figures of the receipts in several cities or
districts of the United States. Let one of these
amounts be, say $43 675 In such the ten bonds
whose numbers end with the last four figures of such
amount g 675l would each be awarded premium of
$4,000 a fifth or coupon bond would receive
premium of $4,000 In this suggestions the
following would be the ten numbers: Oh, 675 1863,
% 675 80. 675 1873 So. 675 60, 675 rs, 675,
$685. 90 675 The last four figures of the revenue
receipts of two other cities districts would in
similar manner award both the $4,000 and 81 900
of receipts of either the same other cities or dis
tricts would award the remaining premiums of $3.50,
$3.50, 800, $50, $l5 and $40
In the ''first call, ;" which was to have taken
place next month, 8, 800 bonds were to have been
redeemed" They amounted to 900, and
were marked "Series A."
Mr. Comstock. in his affidavit, says that on
Thursday he called upon General Maeauley, at
tine Office of the Improvement Company, in TEN
pie court. He asked the manager to more fully
explain the workings of the scheme. General
Macauley went into the subject at length but
confessed in answer to questions, that the com
pany did not intend to distribute whatever was
made among the bondhoders. 1t only gave
them chance of drawing one of the big prizes
once year and of receiving per cent interest
for twenty years on their investment. Mr.. Com
stock also asserts that he was told that a bond
was only good for once chance i'll the next Feb
ruary 'call" after its issue but does not partici
pate in any other distribution.
Mr.. Comstock bought bond No. 06, 448 for S.,
and took it to Justice Duffy, in the Tombs Police
Court After expressing his belief that the inn
provement company was swindle he asked and
obtained warrant for General Macauleys ar
rest The prisoner was found in the companys
Office, in Temple court He was arraigned in
the afternoon and pleaded not guilty Through
his counsel, Mr. Hummel he demanded an
animation, which was set down for Feb. l. Bail
was fixed at 81 OOO but the prisoner paroled,
in the custody of his lawyer