The Portland daily press., 1891-01-08

Some weeks ago the PRESS republished
from the Boston journal an article severely
criticisiDg certain bond investment compa-
MES that were operating in that State.
day or two ago we published card from
the Commonwealth Investment Association
In reply to that criticism. The purport Of
this reply was that the Journals criticism
was unfair and unjust The only interest
the PRESS has in this matter is to present
the truth about these companies which are
now preparing to operate in this State. If
their methods are sound and their scheme
promises, as they say, a safe and profitable
investment Tor savings, they shonld be en-
c0uraged. or at least they should not be dis
cOurag-d. But if, on the other hand their
scheme is unsound it is certainly the duty of a
public journal to guard the public, as far as
may be, against it. None of these compa-
MES have yet existed long enough to demon
strate beyond all doubt either their sound
ness or unsoupdness, so that it is necessary
to have recourse to the opinion of people IA
miliar with investment schemes and capable
of judging of their merits. With this end in
view we handed to a gentleman who has had
long experience in these matters and whose
position has been such that he has had to
give them much study, the circular of one of
these companies. setting forth in detail its
method, and asked his opinion of its sound
ness. He replied in writing In these words:
The circular contains no specific method by
which a calculation can be made on the results of
payments by parties who join these associations
1t Is very vague and yet rather taking. II seems
that the first payment Is So, O. After that $I.25
taking up matured bonds and twenty-five cents to
pay the expenses of the business. The bonds
tation.
Now suppose they mature in two years there
would be twenty-four payments made, the first
one OF 5000 and twenty three of $1.25 so that
under the repre- sentation a man who pays In
S33 rs is liable TO draw out 500 within two
years Years uno,t Of course .o the money must be
they send no notice of an assessment but
each man who pays 10 his $500 ana joins the as
ISOLATION is supposed to remember himself with
out any hint from the ASSOCIATION and send his
Sl.2 month regularly to the home office. III he
does not send it during the month, al he has sent
in before accIues to the benefit OF the few who do
remember and continue to send regularly their
From the representation that the ponds will
mature and be paid within two years, it is obvi-
Gus that three-fourths OF all who pay their first
5000 sometime before they get any return from
that and subsequent payments drop out and the
scheme poks 10 me TO be simply gambl e bet
that enough Will DROP, out during the period so
tnat II stay In shall get very handsome re.
turn from my investment.
IL would hardly seem to be a legitimate bust
ness, and If conducted economically and honestly
by HE management it still seems to be species
OF lottery ana would not commend itself to men
who believe in legitimate methods of making
money.
This view accords substantially, though it
is more conservative, with the opinion ex-
pressed by Major Merrill, the insurance COM
missioner Of Massachusetts, as published in
recent issue of the Boston Herald.
OF course 1t does not absolutely follow that
the methods Of these companies are un-
sound. They themselves claim that the con-
trary Is the case and invite investigation.
They claim that lapses are not their only
source of revenue, that investments in real
estate furnish large part of it. Between
the claims of the companies and the crti
cisms that we have printed it is not our
province to decide We simply want to put
the public in an inquiring mood, so that they
will not rush into these companies without
careful investigation and inquiry.