St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1888-04-30
THE OATS sWINDLE.
The Methods by Which This De-
vice Has Been Made SO Success
mi

The Methods by Which This De-
vice Has Been Made SO Success
full.
The Bohemian oats business is one OF
the old frauds, but the ingenuity with
which the operators have excited the
greed of avaricious persons has kept it
in existence and compelled the legisla-
lures of Ohio, Michigan, Iowa and per-
haps other states, to adopt stringent
prOhibtory legislation against. The
Iowa Homestead gives this detailed ac-
count of the mode of operation:
''The first step with these bogus in
cOrporated companies is to lithograph
some bonds file articles of incOrpOra-
ton with the secretary OF state in Iowa,
or wherever they wish to operate, and
get his permit to do business. AS the
articles of incorporation give no hint OF
and cereals there is nothing on the
face of them to suggest anything
crooked.
"This accomplished, the agent selects
some good township in good county
and begins his operations. His first
move is to make the acquaintance Of
five farmers who have influence and
who can make gilt-edge notes. He lays
open his plans. He will sell each of
them fifty bushels of Bohemian oats at
$40 per bushel, payable by notes run
ming year with from to 10 per cent
interest, and give the bond of the COM
pany to sell for the farmer to his neigh
bors 100 bushels of the product at SIC
per bushel, payable in cash or notes,
less $3.50 per bushel commission. He
will further agree verbally that in case
the farmer should sell the balance of
his crop to his neighbors at $40 per
bushel he will bond the oats thus sold
at $1.55 per bushel; that is, he will give
to the buyer the bond of the Ohio
company. If there are any doubts OF
the ability of the members of the COM
pany to take up this bond he will proba-
bly, ask them to select one of their num-
Der to go to Ohio and inquire into their
standing and he will pay his expenses.
The committee of one will find the in
dividual members of the company well
fixed and in
GOOD FINANCIAL STANDING,
but has no means OF finding out the
condition of the corporation. The oats
are sOWn and produce ordinarily from
fifteen to twenty-five bushels per acre.
The popularity about them is that the
hull comes off in threshing, and hence
they weigh heavier per bnShel than
ordinary oats.
The first year the company makes the
sales promised, redeemS its bonds and
sells the next year to ten farmers in a
township, and the next year to twenty,
and pockets the commission of $3.50 or
S1.25 per bushel, as the case may be.
The first men make money. of course,
and the gambling spirit becomes thor
oughly aroused. The notes are sold to
banks and note shaverS at from 10 to so
per cent discount, and the number of
men interested in a community rapidly
increases. After the first sales the COM
pany is simply the agent of the farmer
in getting his neighbors to purchase.
No one imagineS for moment that the
scheme can work forever, but each one
is persuaded that it will last one year,
and the final loss will come on the
neighborS to whom he sells. 1t is as
clear as daylight to any one that the
time must come when the buyers will be
so numerous that the bonds cannot be
redeemed, but each victim holds
TO THE DELUSION
that it will not be he that will suffer,
but his victims. The farmer who has
bought and sold of course tells all of his
neighbors how he has prOfited; the note
shaver is interested in fostering an in
dustry that produces notes that he can
shave heavily, and the country goes wild
over scheme that promises to make
everybody rich without expenditure of
any money. The deluded victims are
told that whenever the oats will not sell
in one county they will in another or in
another state. They do not stop to
think that if there was any legitimate
value to the oats the company could af-
ford to rent land and raise them them
selves, nor that at the bottom it is sim
ply scheme to induce the farmers of
a state or county to pay $3.50 bushel to
an utterly irresponsible company in
Ohio for the privilege of raising oats
that are of less value commercially than
the most common hats in the country.
In fact, on the face of every bond there
is distinct statement that the oats are
sold on fictitious or speculative basis,
and this for the purpose of avoiding the
charge of swindling by warning them
beforehand that it is gambling con
tract.