Omaha daily bee., 1903-02-23

bOOkmakers were retired from business.
Money not In use cannot earn any dividend
and there we're millions OF dollars in the
hands Of the concerns absolutely tied up
and being dlssipated in reckless, wanton
and criminal extravaganza.
The operating expenses Of these concerns,
added to the weekly premiums due each
week. were so heavy that II wac a physical
impossibility for them to win enough in
wagers, no matter how large the wagers,
and how successful the play. 70 pay one
half the premium. The deficiency was
made up from the nonearnlng capital on
hand.
Beginning of the End.
This was the alarming state OF affairs
last December when Arnold q Co. at
tempted to relieve the strain by reducing
the amount Of the weekly premium from 5
to 2 per cent. This was the beginning OF
the end. Rival concerns, eager to increase
their capital. refused to make a similar re.
duction. and bid for Arnold's patronage. In
a month the withdrawals weakened Arnold
to the breaking point, the disaffected ones
investing in rival concerns.
The investigation begun by the circuit
attorney two weeks ago, after the postal
authorities had made a partial examination
Of these concerns, was the direct cause OF
the collapse. Arnold e. Co, learning that
the grand jury was investigating It's meth.
DDS, and being financially weak, took
refuge in the pretext that the Legislature
was about to examine it's affairs. and shut
down. pulling the other companies to ruin
with It.
Many tales are told Of how the turf in
vestment companies were bled right and
left by interruptions persons. These indi-
viduals, realizing that the Investment"
scheme was a mere cloak to Skin the
public" recognized the promoters as le-
Ultimate prey and proceeded to Skin" them
In turn, secure in the knowledge that they
could not afford to "squeal."
The tempting commissions offered to
agents who secured new investors offered q
rare field for bleeding the companies.
Agents received a commission Of 10 per
cent and. in many cases, 10, 20 and 25 per
| cent Of the amount Of the money deposited
by a new patron secured by him.
This commission was. paid Immediately.
whether the depositor allowed his money to
remain on deposit one year or one day. A
dozen instances are recorded where the
agents took advantage of this rule to enrich
themselves at the expense OF the companies.
They organized parties Of four, FIVE, six
or more, raised a fund Of $500 or 81, 900 and
deposited this in one of the companies
under a certain name, receiving the COM
mission. The following day the deposit
was withdrawn and deposited with another
company, another commission being earned.
This was continued until the money had
been deposited with each of the eight COM
panies, when the round was again made,
another individual appearing as the de-
positor. Thus in innumerabIe instances
each Of the companies paid on the deposit
commissions amounting to twenty times
the principal, which It had never had the
use Of for more than a day or two, and
which finally remained in the possession OF
the conspirators.
This easy way OF making big money at
little or no risk came to the ears Of others
than agents, and many bona hde depositors
worked the game for weeks before the pro-
moters realized how they were being bled.
This led to the adoption Of the thirty-day
rule, requiring depositors to give a months
notice before they could withdraw their de.
post. Even under this rule the scheme
was worked. and finally the companies
ceased paying commissions altogether, as
the money was coming in without solicit
tation anyway
Many Investors Mere women.
The unfortunate feature Of the affair lie
that a majority OF the Investors in these
concerns were women. and by far the
major part Of whom can i'll afford the loss
of the money. Many Of these are young
working girls. servants, widows, dependen,
upon their own exertiOns for a livelihood,
who have intrusted their entire savings to
the mercy OF these men. It is true tina,
there are some depositors who realized al
] drHt hlIIeh the dan0arOna character ~ ~.
business. but who were willing to risk the
odds in a desperate effort to increase theiI
capital. There were others, however, L
whom the real character Of the enterprise
was not explained, or who, in their igno,
rance, were advised by equally Ignorant
friends that the investment was a safe one
1t Is these that furnish the pathetic fea.
ture OF the case. Widows who had beer
left a small sum by the death of the bread
winner. widows who had saved a pittancC
by drudging toll, working girls and serv.
ants who had stinted themselves to pu'
by a 1.-THE of their earnings for a rainy day
men whose earning capacity was fast de,
creasing-these were the real sufferers
The money that had been laid away 4
educate the children. to provide for the fu
ture wants Of the large family, to NEE
the demands OF sick fathers and invali,
blbleTS anu DTOtueIb, was invested In IN
hope and promise OF speedily increasing 1t
scanty proportions. Humble homes tina
a week ago were bright with the rainbow
hued prospects Of future bliss, are toda.
black with the bitterness of disappointment
and despair.
Instances are numerous where men an
women sacrificed their belongings, mort
gagged their chattels and sold their littl
properties and invested 1t all in the bubble
A widow in South St. Louis, unable I
speak English. took 5000 which she had 4
bank, saving to rear and educate her chill
dren, and deposited II all in one Of tn
/ companies on the representation that tn
r weekly dividend would amply provide 10
her needs while her children were CROWN
up to an age where they could suppoT
her. She had received one dividend whe
the bubble burst.
A butcher in North St. Louis sold hi
? house at a sacrifice for So. 500 and investe
a II all with Arnold two weeks ago. Storie
r like this could be multiplied Indefinitely.
' There were pathetic, humorous and ludi
[ crous incidents by the score in the office
3 OF the various concerns the days followin
the crash, when depositoTs clamored 70
5 their money. ON Tuesday the manager
z seeking to allay the excitement and re
store confidence, hoping to diminish III
run on the bank. had "cappers," men an
r women. circulate among the throngs, loud
,a@.-sH.- WA.g- 1919 - ~. Al. - a.