Omaha daily bee., 1893-09-17
Fine boating, CORTLAND beach.
FRAUDS.

Opinion OF I'm Eastern Authority on Bond
Investment Schemes.
The attention of the readers of this paper,
says the United States Investor, was called
last week 20 the fact that tho Nebraska
State Board of Banking had decided that
the so-called investment bond companies
were illegal and had requested the county
attorneys throughout the state to take
action against them. These companies are
treated of at length In the present issue of
the Investor by one OF our western CORE
~spondents. In this issue is also presented
the report of the special master, appointed
by the Massachusetts, supreme, court to ex-
amino the situation of the various endovy-
ment orders In that state. A more bare
faced attempt at swindling was never wit
messed than that now being made by the
"bond investment companies" inc east
has had its experience with concerns Of
this sort. In that section they bore the
title of ''endowment orders" If they ac-
complished no other end, they demonstrated
beyond n shadow of doubt that gullibility is
a marked trait of the human race. The
average of intelligence is supposed to be rs
high in massachusetts as in any community
on the face of the earth, but for all that, the
craze took complete possession
of that commonwealth So widespread was
the desire on the part of the people of tina
state to make something out of nothing that
the effect upon the savings banks
through the falling off in deposits
was a matter that excited
not n little concern. The bond
dealers, in particular, could tell an interest
ing tale regarding the influence of the en-
dowment companies. The savings banks are
the largest buyers of high grade bonds, and
the curtallment of their purchases during
the endowment order period reduced the
bond market to Il condition of stagnation.
If such a state of affairs was possible in
Massachusetts there is no reason to suppose
that the swindle viii not be as operative in
other sections. other things being equal.
One fact that may make it difficult to .du-
plicate the experience of Massachusetts in
the west is that the west is feeling poor
now. Still. 1t is probably not so poor as to
be ina bic to lind a good deal of money in
small amounts for schemes that promise
handsome returns, and that is just what the
bond investment companies do. The bare
facedness of the movement ought to be ap-
| parent to the feeDlest intellect, but the ex-
D%erience of the east is an indication that, so
far as enterprises of this sort are concerned,
the average person is troubled with blind
ness. Our correspondent points out that
insurance companies agree TO pay benefits
only i'll case of injury or death; that the
louisiana lottery undertakes to pay only the
drawer OF the lucky number. But the in
vestment bond campapies guarantee" to
pay the full face of eyery.bond if payments
are kept up. AS the Companies derive rev.
enue from no other source than their men,
bers it is, of course, absurd to discuss them
seriously. .rarrsa M h..
The character of these companies is suf-
ficiently indicated when it is stated that tho
various names which .tA eyo have taken for
themselves belong, in many cases. to
legitimate enterprises, "A lameutable feat
ure of the laws of many Of the western
states is that they provide no safeguards
against such schemes as these. Iowa. for
instance, IS a happy hunting ground for adj
venturers of this sort. A great lumber of
swindling concerns are Incorporated under
the laws of this state, the object of the in
perpetrators being to create the impression
that they have the Endorsement of the state
of Iowa, whereas the state authorities would
gladly exclude them, neck md heels, from
their borders If they had the power Such
defects in the laws of the various states
will. undoubtedly, be remedied in time, but
it is safe to predict that the companies, fore
seeing their fate, will make hay while the
sun shines to the best of their ability.