The morning news. [volume] (Savannah, Ga.) 1887-1900, 1894-10-21
WILD CAT METHODS DENIED.
Lawyer Howell and Secretary Owens
Defend The Atlanta Concerns.


Both Think the Postofice Department
Has Acted Under a Misapprehension
without Investigating the Methods
of the COmpanies-Gov. Northsn and
State Treasurer Hardeman Make Ad-
ditional Statements as to Their Con-
neotion With the Companies.
Atlanta, Ga, oct. 20.-Gov. Northen to-
day publishes the following statement of
his connection with the Southern Guaran-
tee Loan Company, whose business has
been declared fraudulent by the Post
master General. An official Of the com
pany called at my office and asked if I
would serve as member of the advisory
board for d loan company, stating at the
same time that would have no duties to
perform except to receive the business
reports Of the organization. declined
the service at first but finally accepted,
as the personal relations between the
gentleman and myself were Of the most
pleasant nature as a favor TO him, as the
duties expected of me would be light
practically nOthinc
When found my name printed in the
circulars of the company, 1 wrote to the
officers at once, asking that / be relieved
from service as the public announcement
OF my name would compel me TO do more
correspondence than I had the time or
the inclination to undertake.
After / learned the character Of the or
Eanizauon and found it not TO be what
supposed it, I again wrote the COMPANY
that ] did not like to make a request
mat involved unnecessary expense on
ihelr part but ! hoped that all literature
issued hV them containing my name as a
member of the advisory board would be
called in, or my name removed therefrom.
nave not yet received a reply to
either of these letters.
1 do not think the gentleman seeking
my cooperation intended to mislead me
nut from the interview in which gave my
consent to serve him / had no conceDtjon
of the character of the business proposed
10 be done by the company Of which I
appear TO be an officer, nor did I EXPECT
10 be otherwise officially connected with
me company i'm any way than ! have
already indicated"
Mr.. Albert Howell of the firm of Dor
sey, Brewster & Howell, which represents
the company, and who secured the use
OF the names Of Gov. Northen and State
treasurer Hardeman said in an interview
to-day; When I was first approached
about acting for the company | did not
helleVe 1t could do all that it promised. but
/
round that 1t could redeem every prom
use II would make. 1t Is nothing more
IMAM building and loan asssoci-
auon on different plan
1t is not a lottery in any sense of the
word. The revised Statutes of the United
states provides that no lottery. gift con-
Germ, or similar enterprise shall send its
matter through the mails. The payments
OF this company are not made bv chance
nut by d regular arithmatical table
Nhen the company began business one of
agents went to Postmaster Fox and called
ms attention to 1t. He telegraphed IN
washington for Instructions and in re-
turn received the order stopping its let
lers and money orders. ] then went to
washington and have been in consulta
tlon with the Postmaster General as ia
bringing test case in the United States
courts rms test case viii be brought
SHORTY, ana the order stopping the money
orders and registered letters will. I think
be Countermanded "
SINCE the order from the postoaice de-
pdFtment was received Hon r IT, ETarde
man the state treasurer whose name ap-
Peared as president of the Southern
dIantee Loan Company, has sent in
ms resignation. 4 was approached nv, a
member OF the legal firm who represent
the company" said Col Hardeman "IIa
stated that an investigation of the busi
ness had been made and found to he
perfectly legitimate. l was asked to ac-
cept the presidency of the cornnany
which was based on sound business nil
ciples, and 1 did so. Since it has been
passed by the ruling of the governments
attorneys as lottery, l have rendered my
resignation as president, for, while | be-
lleNe the business is perfectly legitimate
having no lottery features about it stfl
! cannot afford to be connected Win :,
company classed by the government as A
lottery"
To-day the publication of the govern
ments condemnation of the investment
companies, with the prominence of thu
people interested in them. has
been a sensation. Secretary Jobn 4
Owens Of the Equitable Loan and Sc
curity Company, who has just come back
from Washington, in defending his assoc
clates and his company, which has done
a large business all over the state, saws:
After going before the postofnce denart-
lnent 1t was clearly to be seen that their
action against our company was brought
about by what they believed to be similar
features embodied in our plan TO those
practiced by the Guarantee Investment
company of Chicago, and other COM
panies which We're operated in the west a
few years ago. These western companies
sold bonds for $40 and a small monthly
lnstallment TO be paid until the certificate
was redeemed, there being no fixed time
Tor redemption. As soon they collected
M,OW they paid bond No. /. As soon as
they received another 81 900 bond No. Z
was paid, then bond No. ., then bond No
1O' and so on, thus depicting their treas
ury with the payment of every bond
Hence the holders of the first bonds
might only pay one months installment
and receive $1,000. while those purchasing
bonds later might pay for fifteen or
twenty years and only receive 81. 600. This
inequality feature is what constitutes the
violation of the lottery laws. The only
possible similarity between these fraudu-
lent western companies and our comDanv
Is that the certificates paid by our com
pany prior TO maturity are paid by a
fixed table. Hence it can be seen why the
postoftice department having deprived
the fraudulent company of the use of the
mails might, without INVESTIGATING orr