The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1896-03-04
NOT A LOTTERY.
The American Coupon Investment
Company's Status.
DETAILED STATEMENT GIVEN


PaDy is Violating No Postal Laws,
But Operating Under a Plan APP
proved by the Departments.
To the Editor of the State Journal:
From what has appeared in the daily
papers during the past week one might
infer that I am engaged in the lottery
business. Will you kindly give me space
to make a statement from my standpoint
regarding this? l do not ask it SO much
upon my own account as l do upon that
of large number of people whose hon
esty and good judgment cannot be Ques-
toned, and who have invested in the
American Coupon Investment company
of which am a member, and which, it
is now charged, is conducting a business
contrary to the United States lottery
statute.
In the limited space that shall ask,
cannot hope to make full and complete
statement of our plan of work, but shall
content myself by stating a few facts
concerning our work.
1t may not be generally known that
there are several scores of bond invest
ment companies running in the United
States, the principles underlying each
being practically the same. The United
States assistant attorney general, acting
for the postal department, has held that
a number of these plans were in conflict
with the lottery statute. The company
of which I am a member was organized
about two years ago. Soon after we be-
gan running, the postal authorities said
that our contract was not agreeable with
that opinion. l was at once sent to Wash
ington by our company to adjust
our case, if possible. there
local attorney to help me, and
we drew our contract in exact conformity
with his opinion, a copy of which have
in nv safe, and which is endorsed by the
postal authorities as not being contrary
to the postal laws of the United States.
This contract we copied verbatim into
our literature, and the certificate which
we issue is an exact copy of
that contract. We therefore believed
that we were duly authorized
to transact business, and felt per-
fectly safe. 1 do not believe the
charge that it is a lottery can be sus-
tanned as to our contract for a single
moment, for there are positively no
drawings or castings of lots; no
'lucky or unlucky" investors; neither
is there any feature in it coming
under the legal definition of lottery
Our bonds are matured upon a mathe-
NAUTICAL principle which is regular in
form, and every bond is matured in its
turn, and there are no chance features
that ia most emphasized is that we have
too good a contract. and are therefore
fraudulent. l desire to say that our con-
tract does not yield to the investor by a
very large per cent as great profit as do
life insurance companies pay to their in
vestors. There is no question that life
insurance is a good thing; also that mu-
tual life insurance is a good Investment
and practicable; but only 10 to 20 per
Of nh L.
eligible to be insured, aud it
is rather ghastly contract to
make when a man knows she must die to
win" Hence it has been a study for
years to evolve a plan of mutual invest
ment that will permit man to enjoy its
benefits with his family while he lives.
We believe bond companies have such
plan. 1t has only been a few years since
the A o. U. W., for instance, was started,
and the same objections were made to it
that are made to bond investment COM
panies now. Every objection made to
our company applies with equal force to
all mutual associations. The same gen
eral principles underlie both, the only
difference being that their contracts are
matured upon death, and ours upon a
mathematical calculation based largely
upon the mortuary tables used by all
life insurance companies. All that is
claimed for our company is that the
same principles which uuderlie mutual
life insurance underlie this bond; the only
difference being that the bond company
kills the bond and pays the man. while
the insurance company kill the man and
pays his beneficiary. In either case the
maturity is sure, and the payment of the
matured obligation is certain. 1t will be
conceded that no life insurance compa-
ny could run at all without new business
and it is also admitted that very large
source of their income is from lapses.
Now we offer to pay, within ten years, a
bond calling for $3.50 in round
numbers. In that length of time the
in 1855. His money is worth at least
per cent, and he, therefore. is actually
out $201. so. Now we only have to sus-
tain "a per cent. lapse and 36 per
cent. increase, (both of which are very
low estimates) to much more than reach
the remaining amount. Mutual life in
surance companies suffer a loss each
year by lapses, defections and death of
from % to 50 per cent OF course those
Iapses all are of benefit to the remaining
investors.
There have been a number of court de-
cisions regarding bond companies, and
almost invariably in their favor. There
is a company based upon the same prin-
cipie as ours, running at Sedalia, Mo.
The attorney general OF that state
brought suit few months ago against the
in the supreme court to vacate
its charter Judge McF and,rendered the
decision, and in his discussion said: 1--WE
are unable to see that there is even a
suggestion upon the face of the certifi-
cate of incorporation that this business
is illegal either in its charter or the
of conducting it. There is moth
ing illegal in the issuance of bonds, nor
selling the same upon installments, if it
is done in legal manner. There is no
on the face OF the pleadings
that respondents are abusing or misusing
the franchise of incorporation for the
purpose of conducting lottery or other
mil vxfuI hnsinass and until such abusa |