Pittsburg dispatch. [volume] (Pittsburg [Pa.]) 1880-1923, 1892-08-27
IMPOSSIBLE SCHEMES
Of Endowment Associations De.
nounced by Frank 2. Bennett.
FIGURES THAT ARE MADE TO LIE.
Difficult to Understand How'So Many Dupes
Could Be Found.
ALL THE ORDERS IN THE SAME SHAPE

ALL THE ORDERS IN THE SAME SHAPE
CHAUTAUoUA, n. Y, Aug. 26-Repre-
sentative Frank P. Bennett, of the Massa-
chusetts Legislature, delivered an address
before the American Economic Association
here to-day upon ''The Endowment Craze. "
In introducing his remarks he said;
Any person who had occasion to pass
through fremont street, Boston, on the
evening of Friday, January. 80. 1884, would
have noticed that fremont Temple was sur
charged with demonstrative gathering OF
people, and that hundreds of curious or in
terested observers were being turned away
from the doors because of the inability of
the great audience room to accommodate
them. On the platform inside the Temple
was a box containing $4,000 in crisp new
500 treasury notes, and the principal
feature of the evenings programme con
sisted in giving one of these 500 bills to
each of 400 persons whose payments to the
organization giving this entertainment
aggregated S4l within the previous u
months Among other speakers, a lady from
Cleveland, who was announced as the estate
Deputy from Ohio and the flea ding lady of
the Order" said Cleveland people had to
have the order of the Royal Ark thorough hly
explained to them. A oneyear order was
something new. Now we have six mon this
and even four months orders, and whether
the time will come when we can put in our
money Monday morning and draw it out
Saturday night, can't say" To her hearers
this last sentence concealed behind its
doubtful form the pleasing hope that the
time was near at hand when S41 put into the
hopper of one of these orders on Monday
morning would grind out 500 on Saturday
night.
The order which this lady represented and
winch thus gave 500 for s4l, with the accom-
paniments OF music, oratory and the ac-
one o. 56assessment endowment associations
doing a similar business in Massachusetts at
that time, while 201 "bond investment COM
were then engaged in an even more brilliant
system OF getting rich quickly in that State.
The Height of the Craze
The endowment craze" reached its height
in Massachusetts during the six months
ending June 80, 1891, and on that date the 56
Massachusetts companies had 265, 4S5 men,
bers, to whom they had promised the enor.
NOUS aggregate OF ss4slO,27s. And as the
existing companies were given q monopoly
by the amendment of 1890 forbidding the
formation of any further similar corpora
tions in Massachusetts, great number Of
organizations were chartered in New Hamp-
shire and came into Massachusetts, with
promises OF the still reader method OF ac-
CURING riches to which 1 have already
alluded. Inquiry of the commissioner OF
corporations in the State House at Boston
shows that 20l foreign "pond Investment
companies and foreign endowment associa-
tlons were registered there in May, 1891
The New Hampshire "bond investment"
endowment society" in promising to pay
each certificate in numerical order, as soon
as the necessary funds were in the treasury.
or instance, if the face value of the certih-
cate was 500 the "bond investment COM
pany" agreed to pay that amount upon GER
tlncate No ], as soon as the amount was in
Rgement. The next sl60 was to be paid to
certificate No. with equal promptness and
with assessments of even 81 per month and
AOOO members, it was evident that the early
certificate holders would get their 500 each
at very small cost, while the loss would fall
more and more heavily upon the later men,
but himself to assess after having con-
t11buted heavy assessments to pay of earlier
and more fortunate certificate holders.
The Unfortunate Last Man.
While the assessment endowment societies
differed from the bond investment COM
panies by Withholding payments until a
definite period, as for example, until the
end of six months or one year or five years,
the Promoters of each system agreed in |
denying that there was any danger of . "last
man" to suffer loss because there was no
body left to assess in the society but him.
self In the fremont Temple meeting, to
which L have alluded, the lady from Cleve-
land, o., said: "As for the last man argu-
ment, which all deputies have to meet, just
assure the people that SO long as the cradle
IS rocked, therell be no last man" But one
OF the promoters of a bond investment COM
pany, appearing before a legislative COM |
mittee at the State House in Boston, was |
asked who had certificates No. and No. 2
in his company, and he replied: "Well, 'er |
had No. 2" Being further interro, ated he |
admitted that if he couldn't have No. !, he |
wanted No. 2. 1t was found that nearly all |
the earlier numbers of certificates in the |
bond investment companies were held by |
the promoters and their friends.
By a Law enacted June 4. 1891, the bond in |
vestment companies were unceremoniously |
swept out of Massachusetts and were sup
pressed with equal promptness by their pa
rent State of New Hampshire, though not |
before the "last man" had been reached |
among the victims of several of them. OF |
the Massa chusetts endowment societies, the |
"0rder of the Royal Ark, !" whose Ohio dep
uty had said, so long as the cradle is |
rocked, there'll be no last man" terminated |
its active existence September II, 1891, or |
about seven months after its leading lady" |
had made the remark which / have just |
gu oted.
Long and Short Term Orders
Mr.. Bennett thinks no more of long-term |
orders than of the mushroom production Of |
them he says:
Nearly all OF the societies still in existence |
call themselves 'long term ORDERS" and |
their officers unite in criticising the '.short- /
term orders" or those whose endowment |
Whatever their term OF payment may be, the /
proposed methods of these societies have /
been similar. The failures have included T.
year, 5-year and 3-year orders, but have been
more largely among the lyear orders, be-
cause the period of large payments in such /
orders has been generally reached Those g.
year orders, whose first certificates do not /
begin to mature until 1884 have naturally /
found continued existence much easier than
the l-year orders whose certificates matured |
in 1891.
But it is difficult to see whv it should nroye
much easier in the end to pay $500 in five
years for $500 than to return slOO in one year
for $40 The Insurance Commissioner Of
Massachusetts, Hon. George S. Merrill, who
sturdily refused from the beginning to yield
either to the enticements or the threats of /
these orders, readily disposed of this claim
OF superiority of the "long-term orders" be-
lore committee of the Legislature the
present year. In his report upon first TAX
Ing possession of his present Office in the
year 1855. he pronounced the promises of
even the "Order of the Iron Hall' as 'tab-
surd," "preposterous' and morally and
and from that time until the present he has
appealed TO the Legislature annually to
take from these speculative schemes the in
dorsment and approval Of the Common
wealth.
Tire principal feature of the Iron Hall has |
been the payment of endowments of s., 900 /
each to those of its subscribers who persist /
in paving the assessments as levied by the /
Supreme officers for period of seven /
years. The payment of disability and death /
benefits has been merely incidental, and is /
service which can be performed lar more 1
honestly and satisfactorily by the legitimate /
frat nal n1s lara ito.S