The Providence news. (Providence [R.I.]) 1891-1906, 1892-03-19
A GLITTERINC BAIT.
The Rash Promises Held Out by a
New York Building Association.
21 PER CENT ANNUALLY.
The Legislature Requested to Protect
Rhode Isianders-Foreign Corporations
Doing business Without Securing Lo-
cal Investors-ToI Increase Bank Taxes.

The time has come when IL Is necessary
that some law should be enacted that will
protect the wage-workers and the holders
of small sums of money from being led
into investments that are liable to result
in the loss of whatever money they may
have.
A bill has been introduced in the Senate,
and referred 20 the judiciary committee,
for an act which will require all foreign
savings and building loan associations to
deposit with the State auditor sum of
money sufficient to make good any losses
that may possibly accrue to them.
The reasons for presenting this bill are
many, and the Justice of the request for
the passage of the law will be readily rec
ognized when il is seen that TO day there
are seven companies doing business in
this State, none of whom have given any
bonds or made any deposits 20 protect the
investors in their stock or shares. One of
these halls from New York city, one from
Chicago, one from Syracuse, one from
Maine, one from North Carolina, one
from Virginia and one from Minnesota.
There is scarcely day but the Assist
ant Secretary of State does not receive
from some person, or from the officers of
a corporation doing business in another
State, asking what license is required by
foreign building and loan associations,
and what taxes are imposed upon them
here.
The truth of the matter is that they pay
no tax whatever, are not required to file
any bonds and that not particle of pro-
lection is assured to the local investors.
Among the companies doing business in
this city is the EaNern of Syracuse. The
oAu haf Off
bonded for $40, 900, and that there can be
no forfeitures, no lapses and no losses.
All stocks and bonds mature in six and a
half years. The admission fee is 81 on a
500 instalment share, with a payment on
15 cents a month. The total cost per share
is $50 80, and at the expiration of the six
years and half 500, or profit Of $40. so,
Is delivered to each shareholder per share.
These investment companies have been
driven out of Massachusetts, by the enact
ment of law similar to the one proposed
here, and now they are swooping down on
Rhode Island and there will be no limit
to them unless our legislature steps in and
requests safety deposit.
The United States InUCStOr of the 18th
instant, in referring TO these corporations
says: "The National Mutual of New
York gave 81 for every share sold and l
per cent. for collections. This is one of
the largest societies, but their loans are
has too look long time before finding
one. They instructed one of their repre-
sentatives to sell stock and evade the
loans, but If they made too much trouble
they would step over their rules and grant
small loan for working purposes. They
also stated that il was good plan to give
shares to the most influential men in
place TO interest them and use their
names"
THE Granite State Of New Hampshire
has done similar business, gave similar
commissions and worked in the same gen
eral way. They gave their stock to one of
the best-known Providence, Or. I,) clergy
men for advertising in his paper. He was
appointed director to further their
scheme, and remained long enough TO
mslead many Rhode Island people who
are anXiously waiting for their money"
THE American Of Chicago gave as the
others did on share and per cent. for col
lections, and after much trouble with
their manager in their Providence Office
and other offices in New England, left
their members to gain further informa-
tion and let them look for loans elsewhere.
The people of the East are not friendly
toward the American.
"The National Capital of Philadelphia
and Chicago did a fiourishing business
and had offices all over the United States
and made much money for officers and
agents. Hon. William Mortimer, of
Chicago, was president, and his name
drew many into the society. They (the
company collapsed, and a receiver mas
been appointed. bnt nothing can be learned
of the peoples money invested with the
associations.
Some of these foreign loan and building
associations, all of whom offer very large
returns far in excess of the interest that
legitimately conducted banks and invest
ment companies can pay and do business.
have local boards of directors in this city.
Their names are used. and that is all
they have no voice whatever in the conduct
of the affairs of the companies they are
connected with.
While these non-taXpaying concerns
are freely doing business here, some one
has seen fit to offer "a bill for an act to in
crease the tax on deposits in the savings
banks in this State. The bill was pre-
sented In the Senate this week, and il
calls for an increase in such taxation of
fully 100 per cent. This burden will fall
upon the workingmen and women of the
State, for il must necessarily decrease the
interest allowed on their deposits.
Special hearings are to be held on both
bills next week.
short Paragraphs.