The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1903-10-24
investigation Develops that the Conn
pany Would Have to Have 100000
Members to Live Two Years.
BETTER LAWS MUST BE PASSED
SHERRICk WILL ASK LEGIsLATURE
TO PROTECT WAGE FARMERS.
The Widow and Orphan, the Poorest
People, Often BeEgared by This
Kind of Mathematical Juggling.

Auditor OF State Sherrick will this morn
ing ask the attorney general TO begin an
action I'm the Marion county courts, looking
TO the winding up OF the affairs OF the
Homestead Loan and Investment Associa-
ton. The auditor will not act on the theory
that receiver should be appointed for this
company. IL is hoped to have some reliable
person or corporation appointed at once 50
that as much OF the assets possible may
be save1 to the $500 members.
The auditors action is based on the in
vestigation made by his office into the sf7
fairs of the company, which examination
occupied several days. The association
headquarters is in the Baldwin block. Ii
has no president at the present time, but
G. E. Davis is the vice president. l.. l..
Downey, of Owen county. was formerly
president of the association The secre-
tary is Charles Buhland. who about -
month ago succeeded Mrs. Mary Barr
AN IMPOSSIBLE SCHEME.
Ii was stated at the auditors office yes
terday that any court would appoint a re-
ceiver for this association because of the
absolute impracticability OF its scheme.
Auditor Sherrick said that as far as he Is
personally concerned he had not thought
an investigation necessary, because TO him
the plan OF the concern seemed utterly i'm
possible. However. il was desired to give
the officers of the association an oppor-
tunty of showing what they proposed TO
do. 1t was the plan OF the association TO
furnish homesteads to the members. A
man would take out sI.oeo worth OF stock
the en0 Of the seventh month he began to
get benefts-that Is, the association would
place on deposit the sum OF s2O for hIm.
lie was not expected 10 touch IL, however
until his year was up. In twelve months
the member would receive $1,000 TO Apply
on home. The scheme OF the associa-
ton To double the membership and
the number of shares issued each month
After the member got his first yl,OoO he
was supposed to pay into the association
81 month
NEEDED WEALTH OF CROESUS.
1t is figured out the auditors office
that by the time the nineteenth month
rolled around the association in order TO
make good with the membership, would
have had to sell s2s2. .1ii.OcO worth OF stock.
BY the end OF the twentieth month the to-
tai amount of stock sold would have 10 be
$524, ,297 900. The experts in the auditors
office estimated last night that the asso-
citation 10 do all il promised would, by the
nineteenth month after organization, need
as members every man, woman and child
in the State of Indiana and each member
would have TO own at least twenty shares
of stock
pregent plan about year ago and i'm that
time has paid out about 5000 in full bene-
fits. This means that three people have
received full benefits. The books show
that number OF other persons have re-
ceived partial benefits, in receiving equities
in different properties. II is stated that ia
four out OF five cases where people have
been benefited either fully or partially
they only hold equities In property. George
accountants in the office OF the auditor.
made their report 10 Mr.. Sherrick yestef-
day, regarding the affairs OF the associa-
ton, and the State auditor visited the OIL
flee of the attorney general in the after
noon. but found him absent. This morn
ing the attorney general will be asked TO
proceed at once. The officers of the asso-
citation declare that their scheme Is pOssi-
BILE and insist that they would have been
bile to keep all their obligations. The au-
ditcr, however. cannot take this view or the
case IL is understood that O. ID. Reeves
was the original inventor of the plan used
by this association. He says. however.
that the association has not adhered en-
tirely 10 the ideas advanced by him.
WILL DRIVE THEM OUT.
Auditor Sherrick says il is his purpose TO
pursue relentlessly the promoters of all
such schemes until he succeeds In driving
them from the State. 81 can look com
placently on Wall street specuIators.~ said
he without care as 10 who is worsted.
but when il comes 10 embarking in schemes
to secure the money OF the small wage
earners by enterprises that look plausible
on their face but which are impossible OF
fulfllment, il is time TO act. and an
official / feel IL Is my duty TO 60 as far as
the law will permit in exterminating them.
Often such promoters gain the influence OF
superintendents and foremen of factories
by the payment OF commissions and using
the confidence that the emplOye mas IN
those above him. The plaHsibiiity OF their
scheme induces investment in their en-
terprise The wife or mother. always hope
full of some day living in her own home.
makes sacrifices to meet the required pay
ments. often denying herself and family OF
the common necessities of life. only TO
learn i'm a few months that failure has
come and these savings. often earned over
the wash tub. have been dissipated. In
addition TO the dishonesty that attaches TO
ordinary swindling there fs that brutal
cruelty because of the class OF people they
seek as their victims that will appeal 10
any man possessed Of the least sense OF
justice or human sympathy. do not mean
10 impugn the Integrity OF any man con-
nected with this class OF institutions for
i can understand how an honest man can
be honestly misguided IN his enthusiasm
over systems OF mathematical Juggling.
1T is presumed by the general public
that the auditor OF state stands between
the people and such visionary enterprises.
but III they will examine the saw they viii
see how little authority he has In driving
them out OF business. They are only re
quired To make annual reports TO him and
may thus operate year before he has
knowledge OF the character OF business
they are doing. Then after the report il
made he can only make an examination
when such report discioses that they are
doing an illegal or unsafe business. This
renders him almost powerless 20 make an
examination ard learn the actual workings
and safety OF such institutions. IL Il nv
purpose 10 request the Governor TO recon-
mend 10 the next Legislature the passage
of a compulsory examination law for these
Institutions. giving TO this office the same
power that IL now possesses over banks
and trust COMPANIES. and mean 70 follow