The morning call., 1891-03-11
SCHEMES OF CHANCE.
German.Austrian Premium Bonds
Under a Ban.
The Federal Government Preparing to Prose-
cute Their Promcters-Moses saloman
Out on Bail.

40 tilC lUltCllCS anu slib
enterprises offering prizes upon lot and
chance is shown by dispatch received in
this city yesterday from Washington, which
reads as follows:
The Postofice Department has advised the ar.
rest Oh NJ Saioman at San Francisco for using
tne mails In sending circulars advertising the
Germsn-Austrlan Premium Bonds Saloman is
York.
Two men have been arrested in St. Louis
charged with being cOnfederates Of H0rner.
Cihef arrests and prosecution are expected 10
ioiiow III different parts of the country.
ALREADY ARRESTED.
Inc dispatch is in manner an anachrom-
Ism, as the arrest of Moses Saloman took
place on the 9th inst, but it shows tie ln-
tense feeling on the subject of gift enter
prises, lotteries and games of chance among
the Fasteners, and 1t also shows that
the cases against Horner of New Y ork, Salo-
man OF this city and the other two confeder-
ates of the boss" promoter of premium
bonds in the United States will be pushed
with yigor that will surprise them.
THE COMPLAINT.
The arrest of Saloman was made on the
9th inst by Deputy United States Marshal
MalGney at the instance and complaint of
tile Postoffice Department through its local
representative. Inspector Seybodt. Salo-
man was indicted by the United States
Grand Jury of the February term on four
counts, each of which accuses him of having
on December 10. 1890, and OH other dates.
wlllfully and wrongfully and knowingly de-
posted and caused TO be deposited in the
mails of the United States, to be conveyed
aud delivered by said United States mails,
certain letter and circular. which said cir
cular ana letter then and there contained in
an envelope, upon which said envelope there
was then and there a postage stamp of the
denomination Of cents, and addressed in
writing to which said letter
was in language and figures as follows, to
wit:
THE OBJECTIONABLE LETTER.
Dear Sir: Having received your letter OF De-
cemDer Stb. we beg leave 10 hand you tile IN
closed circular, giving explanation about Euro.
pean government iTemum bonds, with view OF
Offering them 10 you as safe investment, which,
al The same Time. hold out very valuable chances
OF large gains, such as are usually only offered
by "a lottery. SIN, these bonds must by no
means be cOnfounded with lottery tlea cts, as
they differ from them In the vital points. as our
circular VIII convince you. We also send you
herewith copy of the decision of the Supreme
Court, by Which You will see that the sale OF
these securities Is declared perfectly legal and
no lottery. Tie value of these bouds is guaran-
teed by the respective governments, and so, be-
ing security, loans OF from 80 TO 80 per cent
can always be made upon them. While they
only pay a part of the interest accruing on them,
in coupons, Ike the United States Government
bonds, the other part Is not actually paid out to
each holder but is distributed IN tile shape of
premiums or prizes awarded TO the bonds (Which
are nuinbered) by means OF regular drawings
conducted like lottery which offer to the In
weston a line opportunity To make a large prize.
Our lneloSed circular VIII give you further rea-
sons why these government bonds are highly
recommended as Il safe investment as well as a
trial Of fortune. II you feel inclined To avail
yourself in thls suspicious and hope, for
tunate OppOriuDly, please Inform by mall,
and remit tie lrst payment OF S5,iaiter receipt
of which We Will send you certificate OF bonds,
as mentioned in our circular, which Will entitle
you TO the next drawing. Very respectfully
yours, nj. SALoMAN Co..
727 Market street, San Francisco Cal
The indictment contains four complaints,
each giving almost word for word the sub
stance OF the above epistle to four CORE
spOndents.
SUPREME COURT DECISION.
The decision of the Supreme Court of
California referred to was rendered by Com
missioner Belcher in the ex-parte case,
Shubart (No. &c. 219) ''for selling bonds, pay
ment of which depends on a drawing" in
which FoOte and SearIes concurred and
Myrick dissented.
Since the decision of the Supreme Court
of the State does not affect in any way the
proceedings brought In the Federal court 1t
is not necessary to quote the language of
the opinion nor TO give it any weight, as
it determines nothing in the procedure of
the higher tribunal. Still it has an effect
on the general public.
sALoMAN's VERSION.
When arrested Saloman declared the
premium bond scheme to be not even of the
nature OF lottery, and that no one can
lose their money, though person, IL he is
lucky enough, may win moro than Others
who are less lucky. The bonds we sell are
the same as the United States Government
bonds, except in the method of paying
thaOn which iS dana NV hrav WINGS far "a
manner of lottery" He was released on
$500 cash bail to await the proceedings in
the United States District Court in answer
to the counts in the Indictment, to none of
which he hasyet pleaded.
PROFITS AS PREMIUMS.
The E. II. Horner to whom Saloman and
the two ST. Louisians are supposed to bear
the relationship of acc0mpliceS IN the mean
ing of the law, Is the head of the Premium
Bond Exchange in New York City, where
he had an Office at the corner of Federal and
Franklin streets.
He offers two series of Austrian bonds
one for 100 gulden and one for 800 gulden,
which are the equivalents of $50 and $3.50,
respectively. These are coupon bonds
bearing per cent interest and payable in
1917, and are issued to provide moneys for
certain Improvements undertaken by that
Government.
As these enterprises are ali projected and
maintained by the Government, there are no
stockholders to share the profits, which are,
consequently, offered to the investors in the
bonds In the shape of premiums.
GUARANTEED DIVIDENDS.
The Government guarantees quarterly
dividend of at least 100000 gulden, which is
divided into fifty parts and paid TO the hold
ers of bonds drawn by lot as follows: One
share of 300,000gulden one share Of $1,000
shares of 10000 gulden each, fifteen shares
of 5000 gulden each, thirty shares of 1000
gulden each.
Besides these there is a quarterly gain of
from $4,000 to 10000 guldrn, " hich is d.
vided among the 1000 to 5000 holders of
bonds whose numbers are also drawn by
lot
GATHERING INDUCEMENTS.
Mr.. HOrner of New York and Mr.. Salo-
man of San Francisco do not. however, ap-
peal to the good sense of their prospective
customers, but try to allure them by the
argument that not only does the investor in
Austrian bonds get the principal and inter-
est, but stands reasonable chance of Sc
curing very large bonus IL his long-term
bond is paid off before maturity, by the
happy chance of a lucky number.
They have united five different Govern
ment bonds into one group RS the most adj
vantgeous chance for purchasers. These
bonds are: One per cent 100 forms Aus
trian grand credit bond of 1889; one 3 per
cent 100 francs Servians Government bond
of 1881; one Royal Italian Red-cross bond of
1885; one Royal Hungarian Red-cross bond
of 1882, and one Royal Servian Government
bond of 1888.
These they sell on the SIS month INSTALL
ment plan. They draw interest at the rate
OF per cent year Is per cent is rather
low for this country and have twenty pre-
MUM redemptions every year.
DIFFERENCE OF OPINION.
Solomon does not see how he can be con-
yicted of misusing the mails. Seyboldt on
loop-hole through which that financier can
escape under the wording of the law that
calls for conviction of anv one caught ad-
vertising through the mails '.any game of
chance or lot" and he is supported by the
Government in his crusade upon the Pre-
MUM Bond system.
The case, when it comes to trial, will be
watched with interest in the West, on ac-