Evening star., 1902-05-08
PRONOUNCED A FRAUD
An Alleged Chainless Letter
Scheme.
PECULIAR SITUATION
EFFORT TO DISPOSE OF FOUNTAIN
PENS.
Memorandum of Assistant Attorney
General on Which Postmaster Cen
eral Based His Decision.

An alleged chain letter scheme, whereby
Messrs. Van Kirk and Robins Of Wilkes
barre, Pa, sought to sell fountain pens, has
been pronounced fraud by the Postmaster
General and denied the use of the United
States mails. Accordingly the postal off,
Gals Of Wilkesbarre will now return to their
senders an accumulation Of many thou
sand letters. containing remittances which
are said to aggregate more than 100000.
The situation is one Of the most peculiar IN
the history of the American postal service
and has excited much discussion.
Circulars were sent out by the Van Kirk
and Robins company wherein each ad-
dressee was directed to purchase a fountain
pen from the addressor at a cost of $3.50
and address 12O similar letters to other per-
sons whose names were supplied by the ad-
dresses. For this work of writing and di-
recting letters Van Kirk and Robins agreed
to pay each addressee the sum of s..
In a few weekS-the company began oper-
ations about February 1.-The business had
reached an enormous size. About 10 GOO
pens were delivered, and many more orders
could not be filled because of the inability
of the manufa acturers to supply fountain
pens fast enough. The receipts of the firm
during that period are given by the depart-
ment as $4I 800. 1t is also stated that the
firm had agreed to pay out on the basis of
its s. salary proposition the sum of S152 900.
The decision of the department is of eSpe-
cfal interest because it takes inferentially
the broad ground that all chain letter ad-
vertisement and canvassing schemes are
fraudulent. This attitude is stated at the
outset, Immediately after the usual prelim-
inaries as to the manner in which the Van
Kirk and Robins case came before the as
sistant attorney general.
Assistant ~.,~s
andum.
The memorandum prepared by that off,
Ger, and on which Postmaster General
Payne based his decision, follows in part:
"On the face Of these circulars it viii be
seen that the plan of business belongs to
the so-called chain schemes and that
after the promoter has started 1t It is i'm
possible for him to discontinue without
breaking his promises which he has thus
given. These promises consist of a pen
and work at IS per week, in addition to
$1.50 per week for postage, ETC., the salary
to begin at the end of the first week. The
consideration therefor is s.. 30, which is paid
by patrons of the scheme before the work
will be sent
by this system at least two weeks work
must be given each patron of the scheme to
fulfill the promise made which entails an
expense of s. for salary and So for postage
&C: total, IS. The income from this patron
is but $3.50. The whole scheme resolves
itself into this proposition: For a consid-
Grafton of $3.50 and the writing Of 12O ad-
vertising letters Van Kirk and Robins
promise to give pen and IS, an impossible
proposition inasmuch as the letters all
hold out similar promises, and If returns
are received therefrom it means other
premises similar to the above for the small
consideration named. The only gain the
promoter receives either from a theoretical
or practical standpoint as shown by the ex-
pianations l have received is from persons
who pay $3.50 for the pen and the work and
subsequently decline to perform the work
Th1s would be very unusual fnasmuch as
the principal inducement in the advertise
ments is the work-not the pen.
Career Of the Company.
"The company was established about
February 1 last, and has been doing busi-
ness actually only about nine weeks during
which time it has, by its own showing, de-
livered about 10000 pens, and has failed
to fill a considerable number Of orders by
reason Of its inability to obtain the pens
from manufacturers. This period has been
but 1t has been long enough to show that
it has received about $47 500, while it has
agreed to pay $152G1l. Admitting its state
ment to be true that it intended to make
payments to this extent, 1t is but simple
problem in arithmetic that Its loss would
have been $104, 500 in this operation. There
is ample reason to believe that they never
had funds on hand to meet these outstand-
Ing obligations; but even If they had, how
long could they continue doing business at
this rate?
"At this point comes in the further sug-
gestion Of the company" the memorandum
resumes, after further elucidation of this
line Of reasoning, that it's intentions were
good-that they did not mean to cheat any
one. 1nasmuch as the element of intent Is
not essential In constituting guilt in such a
case 1t should not be taken into considera-
t1on. The Intentions of the promoters OF
this scheme may have been ever so good,
yet If 1t Is evident upon the face of the
papers that they could not perform their
obligations, this department is justified IN
concluding that in the language of the law
1t Is scheme devised for the purpose Of
obtaining money under false and fraudulent
representations. The best intentions Of the
person defrauded when he came face to
face with the fact that he was defraudea.
AS the spirit of the law Is protective and
as 1t devolves upon the Postmaster Gen
eral the duty Of interposing its conditions
to prevent damage to the citizen 1t follows
in my judgment that the duty of the de-
partment is to issue fraud order in this
case"
Other Similar Cases.
Charges said to be similar in all material
points to those against Van Kirk and Rob-
ms have been under consideration at the
department against the following: The
Auburn Pen Company, Hull &>Talladay ana
the Hull & Talladay Fountain Pen Com
pany OF Auburn, N. Y, THE M. & A. Man.
ufacturing Company of Harrisburg, Pa.
IN MAJ. OTEY'S MEMORY.