The daily morning journal and courier., 1902-07-12
FINANCIAL MANIPULATION.
HOW THE PEOPLE BITE IF
 THE BAIT.
What Promoters Can and Do Count
 Upon.

Hundreds of thousands If dollars are reported 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. It was the familiar old fraud: per cent. a week promised, and paid for a period; every lucky investor telling his neighbor, and whole villages rush ing to put their savings into the hands of unknown swindlers. Such mOnstrous credulity has been too often exhibited, to too large a scale and in tho many countries, to leave one in dooubt that there must be a natural explanation or so colossal an infatuation. The same human nature which, in the more IgnCr- ant, renders possible the egreglous dupes who believe their money can be made to earn 25O per cent, leads eFen apparently intelligent people to betray, in financial matters, gullibility which makes them the prey of the uns:rupu- lous,
 There is, we suppose, a psychology or the ilnposed-upOn as well as of .n:pos- ture. Hoaxes play skilfully upon the nature of the hoaxed. Even in such popular madnesses as the Polish lot or Salem withcraft or the Dreyfus trial, there is a method, if we are but able to detect it; and in the Wtl0ta range nt crazy notions about inves ments, which aff1ict good and seemingly 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 vic- tims of the famous Humbert swin1le has lately been giving to the Paris Figaro an account of the steps by which he was artfully led a'3ng; and his con- fessions are instructive in the rationale of such gigantic cheating.
 He with a few friends of his, loaned fhe adventures some 7000,0h) francs. Of course, they had what they thought to be security, and they were prac;ised upon by all the extraordinary astute- ness with which Madame Hur1bert luiled the suspicious of he" Gupes: but still, over and above every supposedly lesal form of security, they had certain signs to go upon which made them con- fident all was safe. One of them, oddly trough, was the high rate of interest pad. This was per cent. The current Ynte is about 1. By a'l the ordinary rules of logic this should have excited dis trust. But in minIs acf,ing to be e,1'lled it was, rather, a powerful reason fer trusting Madame Humtert with mill lions. She must be absolutely sure of -x,s,, s.,1r L Ioox, Eor tune of 50,000,OOO francs. else she could not afford to pay so much for the money she temporarily needed! Is not that plain? By the time triumphant argu- nent, the milliner of Appleton. Wis, refutes every doubt about the nature of the business of the Chicago firm which was paying her s a week (for three weeks only) on her $100 investment. s'Why, it must be an immensely profit able business otherwise they could not pay me such a splendid interest,""
 Another bait at which this HurnheTt victim eagerly 1eaped was that he called the influence of the ''milieu." There were 50 many notabilties and poli- ticians connected with the Humberts. Why, he says every time I went to their chateau, I met there crowd of deputies and ministers and senators; I saw there the wife and the daughter of a former president of the republic; do you wonder that was hoodwinked?" It is not only in France that such shadows of mighty name confuse and deceive the unWary investor. Many an old lady justified her plunge into Amal- gamated Copper last year on the ground that she was assured that "Rockctel- Ter was in it." That was enough for her. So for others is the presence on the list of directors of some glittering name in finance. Do you supDos2 he would be a director if the enterprise were not sound? As for the alluring power over the hesitant investor whic1 aFgreat politicians name has in the prospectus, or on the executive commit tee, every one memory can furnish striking examples. From the time that Ward so cruelty imposed upon Gen. Grant, and then used his name and the mythical "army contracts" to wheedle money out of his victims, down t1 the antics of Tammany office-ho1ders in the American Ice company, we have lad il- lustration after illustration of this way OI DdHDOpZllHS lHG lllRSSllIiS puDllC
 What is obvious is that promoters count positively ukon the existen2e If vast numbers of people with money that burns in their pocket until they can throw 1t away upon some insensate scheme It is a species of financial in- fatuation that counts up it's sufferers as regularly as insanity. Only, unfortun- ately, there is no way by which the State can shut them up and take care of them. They are continually renew ing their numbers, and constitute that great and gullible mass upon which unloading can always be successfully done. Education seems not to enlighten nor experience to teach them. They start out with hope for inordinate profit. "Oh must have my per cent, or I cannot live" said {, maiden lady, typical of many. TO this very natural desire, the clever appeals of the shrewd advertiser come wiCll over whelming temptation. People do not stop to think that millions are going begging for investment at 4 per cent, and that if man offers 8 or 10, it shows conclusively that his security is not good. They do not make their ignorance a warrant for caution, but for rashness; and allow the fact that they have not slightest idea how money is made in stock specula tion to justify them, not in keeping out. but Srer I s1I