Vermont phÅ“nix. [volume] (Brattleboro, Vt.) 1834-1955, 1897-06-18
KELLEY SYSTEM"
And the Practices to Which He Re
sorted When He Was Pinched for
From the Minneapolis journal OF June II. ]


From the Minneapolis Journal of June H.
Imagine endless litigation, an almost GER
tain loss to creditors of thousands upon
thousands of dollars, the revelation of
questionable business methods which
threaten to brand their chief actor as a
criminal and local attorneys say you have
some of the features of the Kelley assign
ment of last summer just beginning to re-
ceive public recognition and TO which spe-
cial attention has been attracted this week
by the action of the grand jury.
When the true inwardness of the assign
ment is laid bare it is charged that it will
be found that the $1,000, 900 or 100000
Kelley handled each year was so juggled
and manipulated that Identification of
moneys paid in by any one client at any
one particular time would have been an
extremely difficult task; in fact that it was
his system to dump all receipts into one
general pot and that out of this, when the
hard times came on, "he robbed Peter to
pay Pau" and finally went bump, smash
up with glorious list of liabilities and
legion of creditors.
This was his system in brief. Twice
year all money placed in his hands drew
interest whether the borrower had paid
words the return on the investment was
practically guaranteed the investor. In
January and July he had his clearance
days. There seems to have been no actu-
al agreement on his part to promise per
cent fruition, but he made it his custom
Just the same and good loans or bad loans,
prompt pay or no pay at all, his client
heard from him every six months. In al
most every particular he followed this
course to the very end.
Naturally when the boom was on and
| there was a constant rise in values and
| money was plenty he was able to do all
this with little trouble. 1t brought him
constantly growing patronage, too, for his
never failing dividends advertised the bust
ness in a way no amount of gaudy circu-
lars or hustlings could have done. East
ern people came to swear by him and es-
| pecially Nermonters. His interest pay
ments, when the flood was at its height,
are said to have reached half a million a
| year Even when times became a little
| hard his cientage continued TO grow, for
when other agents reported slow collec-
| tions his interest coupons were met with
the same prOmptness as ever.
But at that point the strain began and
the sequel, which up to this time had hov-
cred over the future as a possibility, be-
came inevitable AS has been said, all
receipts were handled through his personal
bank account, and into it went everything
preparatory to the semi-annual payment OF
interest and of loans which were due
With continued depression and delayed
collections it was but natural that the
semi-annual drain should exceed the in
come and that in the maelstrom he should
be dragged down.
His System" once his servant, begar
to prove his master. The struggle became
desperate. The problem of meeting the
interest and loan payments increased unit
finally the money became very scarce anC
he resorted to practices which hardly bea
inspection. What was collected from on,
mortgage and should have gone back East
was used to pay another and more pressing
claim, what was turned in as interest on
third loan was used in part to pay up al
overdue loan from fourth party and so /
went. The outcome was certain and it i
only surprising that it should have held OF
as long as it did.
Mr. Kelley has denied any intention o
wrong doing in handling his accounts. Hi