Omaha daily bee., 1893-10-08
THE THREE FIGURE TRICK
A Few Facts for the Benefit of Bond Pro-
moters and Their Dupes,
THE GAME DIsstCTtD BY AN EXPERT
The Magnificent Profits OF Up-to-Date phil
an%thropists Conirasted1 w'th the SUR
plus Reserved Tor the Tsil-Enders
The Lesson of Experience.

spirit worthy of a better cause-in the vain
attempt to check the tide of public condemn
alton. They assume the air of martyrs.
They imagine the expose of their schemes
emauates from alleged rivals, AMI hat they
are victims of vile persecution engineered
mainly by jealous life insurance companies.
They even 60 so far as to insinuatc in terms
that what has been said in the columns of
III BEE and other papers with regard TO
their business methods was CoucUCtCd in
life insurance Offices and inspired by selfish
motives. In "a letter published in last sun
days BEE Mir. w. w. briggs insinuated
broadly that such was the case, When cor
nered for his authority he gave the name of
another bond promoter in Omaha, and when
the latter was taken to task he placed the
responsibility on "A Council Bluffs bond pro
moter. The latter had paid regular rates for
an advertisement of his scheme, and that
fact was distorted and iudustriously spread
among the gullible rs conclusive proof that
everything published against bond schemes
was purchased by envious life insurance
companies. The charge is on par with the
system of wholesale deception practiced by
these pretended philanthropists.
Thilan,h rupy with IA string.
-'AH - ~ S1aaAN t'''p oAA " ~ w NV
agree with him are actuated by selfish mo-
tlves. He is a philanthropist burning with
a desire to help his fellow man. The mere
fact that he Is the chief promoter of a bend
scheme by means Of which he and his asso-
ciates extract the snug sum of 1919 per cent
for the exhausting labor of handling other
peoples money without the slightest secur-
ity, does not, according to his notion, weigh
against HIN in the scale of philanthropy,
but must be accepted as proof of an over
whelning desire to grasp poverty by the
topknot and hurl it off the earth.
In support of his contention that bond
schemes are an improvement on life insur-
ance policies, Mr.. briggs presents an assort-
ment of figures, showing the vast profits of the
latter compared with the scant risk taken.
This is the plan of all bond promoters.
Every scrap of literature issued by them
contains more or less reference to life insur-
ancc business, and the impression Is soug hit
to be conveyed that they are operating on a
similar basis. Nothing is farther from the
truth. Life insurance companies are cid
to strict accountability by state law, where
as bond companies are wholly unrestricted
by law. They claim to operate under state
laws. With the possible exception of Mis-
souri, no state we are aware of has given
them legal sanction. Missouri granted cha T.
tiers 10 eight bond companies, and by an
amended law required a deposit of 500, 600
with the state treasurer from each. Two
or three concerns complied with the la w,
but their operations have been shown to be
SO dishonest and demoraliZing that, accord
lug to the secretary of state of Missouri,
steps will be taken TO secure an order fro IN
the state supreme court revoklng their
charters. One concern, with headquarters
at Nevada, Mo, the parent of western bond
schemes, has removed to ST. Louis, evidently
to evade the restrictions imposed by the
postal authorities.
Bogus incorporation.
1t is claimed bond companies have been in
corporated in ten states. Iowa and Ne
braska are doubtless included in the number.
No restrictions are imposed by either state
with regard TO interpretations. A company
to convert the moon into green cheese may
he Incorporated IN Iowa or Nebraska as
readily as a bond company and no questions
will be asked if the fee is paid. lncorpora-
ton amounts TO the fee and nothing more.
Conceding the reliability of the insurance
figures collated'by Mr.. briggs, there still re-
mains sthe question of the honesty of the
bond scheme. This point was not touched
upon by the philanthropic bond promoter for
the very good and sufficient reason that the
system in vogue by MIR. briggs company
the mystic multiple schcne-has been con.
demned by the postal authorities, and a
complete change must be made before the
company can avail itself of the use of the
United States mail. This is sufficient answer
to the pretense of honesty.
The bond promoters imagine they have
been cruelty maligned and libeled, and vet.
strange to say, no action has been taken BY
them to vindicate themselves. The authori
ties of Massachusetts, Iowa, Missouri and
Nebraska have denounced them as barefaced
swindlers, and the promoters meekly bowed
to the Characterization.
What Experience Proves.
The huge profits promised bond investors
fall, II at all, to the holders of early num-
bercd bonds, who chcertuily furnish the
certificates of reliability. In the matter OF
glittering inducements they discount the
infamous Iron Hall. Bond companies. like
the Iron Han, assure investors they need
not die to beat the game. For a pittance OF
about $500, paid in monthly assessments fol
seven years, the Iron Hall promoters prom.
ised 81, 900 spot cash. Over Sll ,00O, COO were
collected in ten years. One-half of this sun
was returned to certificate holders. The
remainder went where the woodDine
twineth. In five years S95, 900, 600 were col
lected by endowment and numerical bond
companies in Massachusetts. OF the 1000.
600 investors, nlne-tenths received nothing
whatever in return. -Four of the promoters
are serving terms in the penitentiary, the
OInefS are luBltlVeS from justice, and re
ceiyers are now Trying to convert the re
mains OF the concerns into cash.
A Bona scheme Dissected.
Comparatively few Of the class of pcopl,
among whom bond promoters operate arc
capable of analyzing their schemes 1t il
only when the system is dissected by ex
perts that the magnitude of the confidence
game becomes apparent, This has beer
done IN Il number of instances by American
Investments, n financial authority published
In Buffalo, n. Y. The current number deals
with the Perpetual Maturity Bonding com.
pany of Council Bluffs. The system oper
ated by the Perpetual differs but slightly
from the phllanthropic 1919 per cent scheme
of MIR. briggs, so that the results shown bS
the dissection of the former practically rep
resents the outcome of all.
The Perpetual company charges an en-.
trance fee of $40 and u monthly installmen.
OF 81 20. I'VE have no means of Judging, ,
says Investments, "but are justified in as
suming that the entrance fees go to the Off
GERS and agents of the company in paymen
for securing victims. or the monthly dues
81 Is set aside AS a trust fund, out of whict
is PAID the bonds, one being retired as fas
as $1,000 has been accumulated. The re
naming 20 cents goes into an expense funC
TO pay the running expenses of the greasy
concern, This all looks easy and simpi
enough, but before concluding that the com
nunN iS puua up1 in phapifa hIn ,E,ply IL ,ii