Omaha daily bee., 1893-08-20
DOOM OF THE BOND SCHEMES
General Condemnation Of the Latest Invest
ment swindle
STATE OFFICIALS VIGOROUS OPINIONS
Disguised Lotteries and False fretenses to
Be stamped out by the Iron Heel
ofLaw-Faots for Bond Promoters
ana Their Victims.

Bond investment companies have not at
tempted TO reiute or seriously dispute the
allegations OF THE BEE regarding their
character and methods. The managers here
and elsewhere assume a lofty air OF injured
innocence and while publicly protesting in
difference, privately they taint the air with
sulphurous excamations and lamentations.
And they have good reason for their condi-
tion. Their game Is up. State and federal
authorities are on their trail, determined to
squelch the bond scheme and punish the
schemers.
The managers of bond companies assert
that opposition to them is prompted by ieal
ousy. I'VE are antagonized." they say, "by
insurance companies and building and loan
associations, because we have better thing
and are taking business from them"
This assumption is as transparent as
their pretensions of honesty. Insurance
companies are hedged in with rigorous laws
and are subject to official regulation and ex-
animation. The moment they issue policy
they assume n risk in given amount, pay
able If the holder of the policy dies the next
moment. 1t requires an elastic Imagination
TO place bond companies on plane with in
surance companies. Bond companies assume
no risk whatever. They cater to cupidity,
are subject TO no legal restraints, and are at
present wholly irresponsible. Nor are they
to be compared in the same breath with
legitimate building and loan associations
here or elsewhere Building ana loan asso-
Citations are recognized as most effective
incentive To home building. To that end
state legislation safeguards them. eliminat-
ing the element of speculation as far as prac-
ticable, subjecting them to official supervi-
sion and invariably prohibiting robbery
under the guise Of forfeitures.
Specimen Brick.
One Of the bond concerns which indig-
nantly denies that it is a lottery Is located
in Council Bluffs-the Perpetual Maturity
Bonding company. 1t announces with a
flourish that 1t is Incorporated under the
laws of Iowa. The certificate amounts to
nothing as guarantee. 1t is simply a re-
cept for the fees required under ordinary
incorporation laws A company may be IN
corporated under the same law TO build u
railroad to the moon.
Tho Perpetual announces that 1t has n
snap and generously permits any person to
come in on payment of $40. The monthly
payment is Sl.25. The 25 cents is taken for
expenses. The balance, together with fines,
go into trust fund, and when 81 600 has ac-
cumulated bond is paid. There is to be
no investment of the fund, therefore the
only source of profit is that which comes
from the misfortune or disgust of the COM
pany's dupes. Failure TO pay monthly dues
within thirty days after becoming due for
feits all payments previously made.
But how are the bonds paidl
The Perpetual says the first 300 bonds
will be paid in consecutive order. That
will require an accumulation of S300.000 in
blocks of $1,000. Suppose the company has
1000 continuous investors paying 81 900 Il
month, or $4,000 a year. 1t would take the
holder of bond 300 just twenty-five years to
reach divvy. Meanwhile, the managers
will have pocketed $4,000 in cold cash.
After bond 300 is disposed of the company
promises II little diversion for the victims,
which it cheerily insists is not lottery
scheme. 1t will be noticed the multiple OF
three is strangely absent. This schedule
shows Ghe plan: