Omaha daily bee., 1893-12-14
NEWS FROM COUNCIL BLUFFS
Perpetual Maturity Bond Promoters Arrested
by the postofice Authorities.
CHARGED WITH USING MAILS TO DEFaAUD
George n. Gable aud John Freesc Taken
Into Custody ut tho Insurance OF In
spector Mercer and Released
on Heavy Bail.

The blow has fallen and two proprictors of
n s~o-called "iuvestmcnt company arc in the
clutches Of the United States officials. with
the prospect of n couple more being caught
today at Council Bluffs.
The agitation Of this bond" business has
been widespread, and the announcement
that the agent Of the Chicago Guarantee
company had been fined $1,000 aud given q
Jail sentence OF one year caused a shiver
along the ranks Of the companies. 1t was
announced in THE BEE several days ago that
q postofice INSPECTOR would arrive in the
city shortly to make an Investigation OF the
two companies doing business in this city.
W. G.. d. Mercer Of Des Moines was the in
spector referred to. He arrived and with
Deputy United States Marshal Richards has
been looking into the affairs of these two
companies.
Yesterday afternoon George II. Gable
and John treese Of the Perpetual Maturity
Bonding association were placed under ar
rest on the charge of using the United
States mails for fraudulent purposes, vio-
lating the statutes prohibiting lotteries.
They gave bonds in the sum of 81 900 each
and were released.
Had secured Several Thousands.
The officers found that this company had
issued $40 bonds in two series, tho first con-
tanning 500 bonds and the second 800. A pay
mcnt of $40 had been made on each Of the
first 800 bonds, and one of $40 on each of the
series containing 300, to say nothing of the
monthly payments of Sl.5O exacted from
each bondholdcr. The amount realized
from these first payments, therefore, was
Sll 900 at least, and according to the pros
pcctus, ali OF these first payments were to
be used in forming II fund for the purpose of
paying Off the bonds as fast as the treasury
of the company accumulated 81 600. Only
-four bonds had been paid, however, SO that
there is 81 900 which could not be accounted
for very satisfactorily. .
Gable and Freose claimed that the opera
ton OF the business had been very expen-
sive and that they had paid out large sums
OF money in hiring agents, paying adver-
tislng bills and pushing the business gen.
orally, thus accounting for their fail
ure to pay off any more bonds. They
claimed that they had actually lost money
in the venture, and were 800 in the hole.
When the possibility of refunding the money
received from patrons of the company was
suggested they said they thought the
patrons, having paid in smal amounts,
were better able to stand the loss in driblets
than they themselves were to stand 1t in u
lump.
will Make "a Fight.
Messrs. Frecse and Gable claim that
their violation of the law, if such it can be
called, is purely u technical one, aud they
propose to fight the case to the end. The
Chicago man who was found guilty of fraud
and sentenced the other day has taken an
appeal to the supreme court. Until the
court of slast resort has decided the case
they propose to stand up for their rights
ana the case promises TO be as hardly
fought as in Chicago.
After the Third Man.
A warrant is out for the arrest OF j. B
Allen. the third member of the partnership
but he is at present out of the city. The
Equitable Investment company is the mex
on the list, and 1t is promised that j. B
Sweet and S. =. Vannatta, the proprietor.
OF this-eompany, will be placed under arres
today.
Mr.. Mercer, who was connected with thu
prosecution Of the Guarantee company II
Chicago, states that the method of operat
ing is the same in all three cases, with ont
or two minor particulars excepted. He lief
for Salt Lake City last evening, and it /
understood that a nest of hornets is to b.
set buzzing Immediately about the ears o
some companies in the far west.