The evening times. [volume] (Washington, D.C.) 1895-1902, 1900-08-27
POSTAL OFFICIALS AROUSED.
Investigating Concerns whose 0pe-
ratiOns SAVIOR of Lotteries.

SaSOr OF lotteries.
scheme which promises to prove hard
ly less fraudulent than the old lotteries is
receiving the attention of postal officials
Little investment" companies under a
score OF different names have been spring
ing up all over the country in the past
few months. All of them offer TO divide
jewelry or cash among their -bondhold
ers" by a system of drawings held every
once in a while. The subscribers" pay
small initiation fee and weekly sum of
81 in order TO keep up their rights to take
part in the drawings.
Chicago and the middle West is literal
1y honeycombed with the concerns. They
have been issuing flashily prepared litera
ture in which they set forth that the
lapses on the part IF members enable
those who remain to make big profits
The schemes have been coming to tha
attention Of the postal officials for several
weeks. About forty different companies
have been located, and their methods have
been discovered. The Office of the Assist
ant Attorney General for the Postal De-
partment is expected TO give decision in
few days which will set forth whether
the companies are really lotteries under
another name II II be held by the Assist
ant Attorney General that they are such,
fraud order viii be issued against each of
them, which Will prohibit their using the
mails
Nest of the companies are Incorporated
under the laws of Missouri or Illinois for
various amounts of capital running up TO
$4,000 Nothing in their prospectuses,
however. shows how much of the capital
has been paid up. It is believed that the
incorporation in most cases is nothing
more than farce.
Some name in which "tontine'' or in
vestment' has prominent part is usually
adopted. In their literature the promoters
have followed as closely as possible the
style Of the life insurance companies DO
ing an endowment business. The con
Germs usually have number Of agents
who travel over the country among people
drawing salaries of from $40 to s25 a week
From them most of the business comes, for
1t requires only 81 a week to stay in the
game, while the chances of winning big
prize are gli;teringly high
The plan is based on the sale of a
| bond" valued usually al sI00. -Four dol
lars is charged as an initiation fee, and
| the rest is paid in weekly instaIiments ex-
tending over twenty-four months
Each bond" is numbered and that fact
forms the key to the element OF chance
in the system. At the discretion of the
directors in the company a drawing is held
whenever enough money has been taken in
AIoAu tut SdlS OF Q00f!S. IhS money thus
received is divided into various sums and
Lunb nbers are drawn BY chance from among
the numbers OF the bonds already is
sued. The lucky holders receive the sums
thus divided. That cancels the contracts
and they have no right TO participate in
future drawings.
Should 4 -bondholder'' have one of his
contracts ''matured' by this process in
week or so after taking it out. he would
OF course make an enormous profit On
the ether hand. should he have to remain
in the concern for two or three years be-
fore getting his return, the value OF the
investment would be almost nothing The
element of chance therefore determines the
profits which each winner receives. On
that account the postal officials believe
that they can find sufficient authority in
the lottery laws 10 prevent the use Of the
mails by the concerns
Unlike legitimate insurance companies
which have their chief income in the in
terest received from premiums paid, III Sc
Dew get-Tich-Quiek concerns do not even
pretend tc put any of their receipts at
| interest. Their only source of profit is in
the lapses Of contracts when members g
tired of the game and quit paying the dol
lar a week.
II would be impossible for the companies
TO last should their customers stay with
| them They depend constantly on taking
money from the fresh arrivals in order to
pay those who have been longer in-
Postal officials are satisfied that in many
cases the drawings are purely fraudulent,
and that the money divided BY that means
goes TO the promoters of the scheme and
their Immediate friends.