The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1892-08-27
THE GET.RICH-QUICK CRAZE
Interesting Address by Hon. Frank P.
Bennett on Topic of Local Concern.
Methods Of the Iron Hall and Other ASSESS
msnt Orders That Enrich Few Persons and
Swindle Many-A Grocery Clerk in Clover.
e,..,., 60 n. r.a,.nano,,. Journ.,


CHAUTAUQUA, N. Y. Aug. 26.-Hon. Frank
P. Bennett . member of the Massachusetts,
House of Representatives. who has made
tho question q study, to-day delivered an
interesting address on the Endowment
Craze In Massachusetts" Mr.. Bennett
spoke before the American Economic
Association, and his words wero
listened to with marked attention, in
view of tho recent disclosures at In
dlanapoIis. His address was severe ar
raignment of the "get-rich-quick" orders,
with special referenceto the bond invest
ment" and other schemes whioh have food
ed New England. In regard to the Iron
Hall he said:
parent of the assessment endowment associa-
tions," was organized In Indiana In 1881, ana
the Officers and paid attorneys Of this corpora
noting legislation III favor OF the Massachusetts
companies, whose political support is very i'm
1887 that Hon. John K Tarbox. then Insurance
Commissioner of Massachusetts, called the at
teniiOn of the Attorney general to- the
engaged and the law officer of the COM
monwealth affirmed the illegality or the
transactions of the Iron Hall. and was about to
tanned Ex-Governor Robinson and other leading
politicians counsel before the Legislature,
and with their assistance obtained such legisa-
or infamous Section 8, of Chapter 429 OF the acts
OF 1888, under which the tifty-six Massachu-
subsequently organized. since that time ex-
G0vern0a Robinson and other men prominent In
public life have appeared before committees at
each session OF the Legislature in defense OF the
endowment orders, and this year the c0unsels or
these organizations were apply described by In
surance Commissioner Merrill, az follows:
the officers OF these corporations were willing To
commit their case 70 the brilliant Ex-Governor
and the able ex-councilor but this year, after
the little episode in last fall political campaign,
that was u combination altogether too one sided.
and they therefore brought In from the other
great political party the brilliant ex-Congress-
man and the other equally brilliant expectant
Lieutenant governor"
In the years previous to 1892 the counsel OF
theendowment orders were two KS, but this year
four KS were not found sufficient to render their
business entirely reputable in the eyes OF the
community.
FEATURES OF THE IRON HALL
The principal feature of the Iron Hall has been
the payment Of endowments of $1,000 each to
those Of its subscribers who persist in paying
the assessments as levied by the supreme OFF,
GERS for period OF seven years. The payment
of disability and death benefits has been merely
incidental, and is q service which can be per-
formed far more honestly and satisfactorily by
the legitimate fra:ernal mutual benefit
Citations than by the endowment societies. The
obligations of the Iron Hall began to mature In
1858, and in the four years from that time To the
date OF its last publ ic statement. Jan. 1. 1892 IL
had paid in final benefits TO its sick and persist
ent contributors the large sum OF 1921 ,245;
and the cost TO each beneficiary was in the
neighborhood of $500 for s 600. The amount
Of each assessment is $3.50 for q 81 900 certih-
cate, and the number Of assessments have thus
far averaged seventeen or eighteen per annum.
The Iron Hall also issues certificates Tor less
amounts than $1,000 at assessments ranging
The success of the Iron Hall in maeting its ma
turing Ger ifcates without any apparent disaster
until the recent application for receivership
was powerful argument in defense OF the
Massachusetts endowment societies. trust the
audience will pardon me for appearing to assume
at this point that any analysis or the achieve
ments and possibilities OF the "Order OF the Iron
Hail. is necessary TO convince you that no
known system OF honest finance Is able to con-
Time payments of $1,000 for assessments ag-
gregating 5000 In seven years. During the first
years of rs organization, the membership of the
iron Hall small. aud. at 81 900 each. So
73l,245 would pay but 5,79l certificates. Ac-
corning to the company's own statement. il paid
Only 900 final claims i'll 1891, and had at the be-
ginning OF that year 53.9O6 members, and at
the end of that year 65.2O4 members. The
seventeen or eighteen assessments of the COM
pany for single year, upon the last named
number OF members, would yield more than SUI
tieicnt funds to have paid the 900 maturing cers
tihcates.
In the year 1891. to which have just alluded,
the Iron Hall raised seventeen assessments,
yielding 81, 9O7 2Ss %. and it paid benefits ag-
gregating 81, Jos, 4Ss, including not only the
81 900 each to the 900 matured certificates. but
also some sick and disability benefits. But.
while membership OF Co., 04 would thus read
lily pay 900 maturing certificates and leave
something for the reserve fund. membership
OF at least 2, COS, 100 would be required to pay
65.204 maturing certificates at seven
teen or eighteen assessments per year,
and membership of lOA .326.400 TO
pay 2.60S,l60 maturing certificates, and
a membership of 4.173,O56,OO0 10 pay 1O4,-
326, 400 maturing certificates; and AS the popu-
latioE OF the entire globe Is estimated TO be but
1900, OOO. OOOs it follows that. upon the basis of
these calculations, nearly three times the popu-
lation OF the whole world. including octogepa-
rians and infants in arms, Hottentots, Pata-
gonian giants and wandering Arabs. would
shortly he necessary to insure reasonable de-
gree OF perlnanence for the Iron Hail alone.
without making any provision for the endow-
ment companies having their home offices in
Massachusetts,
A STUDY IN GEOMETRICAL PR 'GREsSION.
1t would not seem to require very profound
student of mathematics to understand that II
1000 men pay $500 apiece into a common treas
ury, and 800 of them draw out 81 900 apiece,
there exists a deficiency Immediately of $780,
600 il the remaining 700 have each beer. prom
ised like sum; and that. without making any
allowance for the running expenses of the assO-
citation. it requires three and One-third new menu
bers to pay off one old member at the rate OF
$1,000 for $500 Nearly every school-boy is
familiar with the old story OF the blacksmith
who agreed to pay helper cent the first day,
2 cents the second, cents the third day and SO
on, doubling the mans wages each succeeding
day for twenty days. The astonished blacksmith
found that by this process the helpers earnings
amounted to $5,242ss for the twentieth day,
and to $lO,4 S5.75 for the entire twenty days. In
this generation of an advanced public school
system in the United States one would suppose
there were enough who have been initiated into
the mysteries OF geometrical progression to sug-
gest the impracticability OF the Iron Hall system
OF speculation at glance
But while all men have the gift of reason. il il
unfortunately true that some men reason very
badly. Some of the victims of the endowment or
ders were very practical persons. who scorned
theories and doctrines, and were quite certain
the endowment orders would succeed because
they had seen with their own eyes full payments
made by some OF the orders TO their certificate
holders. Others of the victims admitted from
the outset that somebody was going to be finan-
cialy hurt in these orders. but that they them
selves hoped to get their money out before the
crash came
To those of their critics who are so theoretical
as to appeal to the rules or simple arithmetic
the managers of the endowment societies an
swer that sufficient "lapses'' may be depended
upon to insure the success OF their enterprises,
and, moreover. that they do not promise ts limit
their assessments to any definite ratio OF the
promised benefits. furthermore the Iron Hail.
replies that IL does not even promise 10 pay a
definite amount, that 1t only contracts TO pay a
sum mot exceeding $1,000" All OF their lit
erature however, suggests a definite promise of
81 900, and the persons who join do not see the
certificates until after they have become men,
beers. and are usually then influenced rather by
the promises of the company's agent than by
the precise language Of its written or printed
contracts.
OF the present liabilities of the Order of the
Iron Hall, only 81, 849.725 natures in 1892,
but the amount increases rapidly until it reaches