Omaha daily bee., 1903-02-23
TWENTIETH CENTURY CRAFT
Marvellous Ease with Which Fools We're
separated from Their Money.
FLOOD OF LUcRE BEwuDERs PROMOTERS
Millions Poured Into h COnerE of
Get-Rich Fakirs-side Lights
on the tame worked In
81. Louis.

The Euccessive collapse Of get-rich- quick
concerns IN St. Louis. Chicago and New
York gives fresh emphasis 70 the saying,
"a fool and his money are soon parted
The ease with which thousands OF credulous
people handed in their money on the mere
promise OF irresponsible g%rafters suggests
the need Of amending the Barnum maxim
90 as to read, "A fool is born every sec
ond."
Seven OF the wrecked concerns IN St.
Louis. gambling on horse races and in
grain, had $4,000 customers on their books
and they stand to lose a total Of 81, 5S5, 900.
These estimates, made by the st. Louis
Republic. are based on the best informa-
tion obtainable from books, employees and
victims OF the looted concerns. Chicago
and New York together will easily duplicate
the st. Louis record, while New Orleans.
where the game is being worked without
interference. will add an equal amount to
the total when the Inevitable crash comes.
The way the game was worked is detailed
instructively by the st. Louis Republic. and
a few extracts will be OF interest to the
victims and the multitude inclined to be
sporty with their money.
The thing that stands out with glarins
pre-eminence, says the Republic, is the
utter looseness Of the methods OF conduct
ing the affairs OF the office, the unbusiness-
like administration OF their affairs, the
wanton extravaganza which prevailed on
every hand, the laxity Of system. which
resulted in the squandering Of vast sums
Of money in every department. Such was
tho riotous profigacy extant that It is
estimated fully 35 per cent OF each deposit
was dissipated in useless and unnecessary
expenses" before even an attempt could
be made to invest It..
No such reckless extravaganza would DO
tolerated for an hour by any reputable
business concern, and yet, although these
facts we're known and freely commented
upon by hundreds of investors, they con-
tinued as depositors. Many had blind. inn
llicit faith In the statements OF the officers
that the companies we're earning fabulous
profits on their speculations, and could at
lord to have a liberal expense account.
Others, suspecting the truth, took a
gamblers chance, trusting to pull out con
Diderably more In premiums than the prin-
cipal invested before the final collapse
came.
The smallest salary received by any Of the
once force was $40 a week, and salaries
ranged from that to $3.50 a month.
Knew How to Catch
The willy promoters, expert Judges OF
Tullible human nature. we'll knew how to
TAFT the hook to catch the suckers" As
"a other and more legitimate lines, ap-
5earances count for everything. and first
impressions are lasting. Everything was
trranged to give an air Of solidity and
prosperity to the business. Magnihcent
suites Of Offices in downtown buildings
we're lavishly and luxuriantly fitted up
courteous and affable employees and attend
nts we're secured. and every convenience
md accommodation for patrons was main
aimed. Especial attention was devoted Ia
providing for the wants OF lady patrons
Who outnumbered the men almost two ia
one. sten~ographers. typewriters. book.
seepers, cashiers and clerks by the score
we're In evidence. mostly girls, young, good
looking, neatly dressed and altogether at
t~ractive. The once presented a busy scene
when open for business. and the genera
..r OF activity and prosperity which hov.
red about went far toward stifing the
'uspicions Of the timid and confirming the
belief OF the credulous that the business
was being conducted on a sound anC
profitable basis.
Although the companies employed a corp.
Of experts to prepare the specious and in.
o1AASabA Wa oANRA AAAAhAoA
and pamphlets extolling the merits of tn,
investment, their most Industrious and sue.
cessful advertising agents were the credul
GUS investors themselves. The women es
~Decially were helpful In securing new in
vestors. Every depositor who had received
\ premium for a couple of weeks promptly
as agreed upon, became Immediately al
industrious press agent for the concern
and made haste to inform his or her friend
or neighbors OF the scheme. extolling II
merits to such good purpose that tn
listener straightway invested his scant saw
tngs, or all that he could beg or borrow
in the mine"
Thus the scheme became an endles
chain, in which the promoters had nothln
TO do but reap the reward OF the energy O
their dupes. There would have been n
occasion for them to spend a dollar for ad
vertising or for agents to drum up me-
trade, n II had not been for the occasions
scores resulting from the efforts Of homes
men to have the authorities institute
prosecution. These ~spasmodic scares re
suited in heavy Withdrawals OF deposits b
tlmid investors. necessitatlng full-page ad
ve~rtisements in hundreds OF newspaper
and the employment of agents to restor
confidence and secure new investors. A
this entailed vast expense and made sa
inroads on the capital.
Demands Were Met without Difficulty
These constant and incessant drains upo
the exchequer were met without trouble Q
Inconvenience by the simple expedient {
using the capital Of the deposltors. and no
as the suckers" fondly believed, by re
course TO the Surplus profits" Of the CON
pany. There were no surplus profits. no
indeed, any. The process of conducting III
business was simple. The promoters took
depositoT's money. used 35 per cent OF II q
operating expenses, and paid him his week.
dividend out OF the remainder as long as
lasted, After II had been all used up II
deficiency was made up out of the none
OF the depositor who invested later. Tn
process could be kept up indefinitely as Ion
as the supply OF new depositors RENAME
undiminished. unless the law interfered, be
cause there is a trite saying that "a suckC
is born every minute"
The liberality of the promoters in n
matter OF salaries, commissions and II,
Was never surpassed by Coal Oil Johnnie
The mental who performed the sllghte.
service about the building for one OF a
promoters OF managers received munihcel
tips. Extra night work was paid for at Il
rate OF 81 an hour and IS for Sundays. TT
women. employees were furnished sumptuo,
meals when they worked at night and we