The Indianapolis journal., 1902-08-31
FINANCIAL INFATUATION.
Folly of People Who Invest i'm Get
Rich uick Concerns.


New York Evening Post
Hundreds Of thousands Of dollars are re-
ported this morning to have been lost by
people in small towns near Chicago. They
had invested in an absurdly bare-faced
''get-rich-quick'' concern in that city. 1t
was the familiar old Frauds per cent. a
week promised and paid for period; every
lucky investor telling his neighbor, and
whole villages rushing to put their savings
into the hands of unknown swindlers. Such
monstrOus credulity has been too often
hibited, on too large a scale and in too
many countries, to leave one in doubt that
there must be a natural explanation of so
colossal an infatuation. The same human
nature which, in the more ignorant renders
possible the egregious dupes who believe
that money can be made to earn 250 per
cent, leads even apparently intelligent peo-
pie to betray, in financial matters, guilt
bility which makes them the prey of the
unscrupulous.
There is, we suppose, a psychology Of the
imposed-upon, as we'll as of imposture.
Hoaxes play skillfully upon the nature of
the hoaxed. Even in such popular mad
nesses as the Popish plot Salem witch
craft or the Dreyfus trial, there is meth
cd, If are but able to detect it; and in
the whole range of crazy notions about in
vestments, which affiict good and seeming
ly sane people, there are certain principles
OF reasoning and motives of action which
account for their disastrous falling into the
snare Of the spoiler. One of the leading
victims of the famous Humbert swindle has
lately been giving to the Paris Figaro an
account of the steps by which he art
fully led along, and his confessions are in
structive in the rationale of such gigantic
cheating.
He, with few friends of his, loaned the
adventures some 100000 francs. OF course,
they had what they thought to be security,
and they were practiced upon by all the
extraordinary aStuteneSS with which
Madame Humbert lulled the suspicious of
her dupes; but still, over and above every
supposedly legal form of security, they had
certain signs TO go upon which made them
confident all was safe. One of them, oddly
enough, was the high rate Of interest paid.
This was Z per cent. The current rate is
about 4. By all the ordinary rules of logic
this should have excited distrust. But in
minds aching to be gulled it was, rather, a
powerful reason for trusting Madame Hum
bert with millions. She must be absolutely
sure Of winning her suit and getting her
fortune of 50,0O00,000 francs, else she could
not afford to pay so much for the money
she temporarily needed. Is not that plain?
BY the same triumphant argument the mil
liner OF Appleton, Wis, refutes every doubt
about the nature of the business of the
Chicago firm which was paying her s. a
week Cfor three weeks only on her 500 in
not pay me such a splendid INTEREST,"
Another bait at which this Humbert vic
tim eagerly leaped was what he called the
influence of the ''mileu" There were so
many notabilties and politicians connected
with the Humbertsi Why, he says, every
time L went to their chateau 1 met there a
crowd of deputies ana ministers and sena-
tors; / saw there the wife and daughter
of a former President of the republic; do
you wonder that l was hoodwinked?" 1t is
only Cba of q
mighty name confuse and deceive the un-
wary investor. Many old lady justified
her plunge into Amalgamated Copper last
year on the ground that she was assured
that Rockefeller was in it," That was
enough for her. So for others Is the pres
ence on the list of directors of some glitter
ing name in finance. Do you suppose he
would be director If the enterprise were
not sound? As for the alluring power over
the hesitant investor which a great pOliti-
clan name has In the prospectus, or on the
executive committee, every ones memory
can furnish striking examples. From the
time that Ward so cruelty imposed upon
General Grant, and then used his name and
the mythical army contracts to wheedle
money out of his victims, down to the an
ties of Tammany officeholders in the Amer
lean Ice Company, we have had Illustration
after illustration of this way of bam-
boozling the investing public.
What is obvious is that promoters count
positively upon the existence of vast num-
bers of people with money that burns in
their pocket until they can throw il away
upon some inSensate scheme. 1t is a spe-
cieS of financial infatuation that counts up
its sufferers as regularly as insanity Only
unfortunately, there is no way by which
the State can shut them up and take care
of them. They are continually renewing
their numbers, and constitute that great
and gullible mass upon which unloading
can always be successfully done. Educa-
tion seems not to enlighten nor experience
to teach them. They start out with a hope
for inordinate profit. "Oh, 1 must have
my per cent, or L cannot live said a
maiden lady, typical of many. To this
very natural desire the clever appeals of
the shrewd advertiser come with over
whelmlng temptation People do not stop
to think that millions are going begging
for investment at per cent, and that if a
man offers 10, it shows concIusively
that his security is not good They do not
make their ignorance a warrant for eau
tiOn, but for raShneSs; and allow the fact
that they have not the slightest idea how
money is made in stock speculation to
justify them, not in keeping out, but in
rushing madly in. Every such period of
active markets and new enterprises as
that we have been passing through is
marked, in the end. by the wreck of small
investors all over the country who have
put their little boards into the gaudy
bubbles of the hour with boundless credui-
not the fury OF a crowd or a passion that
moves a whole people-but a sort of OBJ
session that goes silently over the land
singing out here clearinghouse keeper
and there a sDinster cherishing her small
inheritance, and leading them to embark
their all in enterprises which bear on their
face all the signs of instability or of fraud