The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1903-02-28
CAREER OF ARNOLD
How the "Get.R ich-Quick Artist
Roped in shrewd, Sober Bust
ness Men.
Former Cab Driver Took in SIS,
100000 in Two Years
His Imitators.

One If the most peculiar features of the
brief epoch of the turf Investment COM
pany-an institution best typ1hed py the
f. J. Arnold concern, the pioneer OF the
lot-was the character of the men VINO
were duped by so old and often exposed a
game.
Apparently shrewd business men-rnen
who might have been supposed to have
cut their eye teeth-were among the cas-
lest victims of the "co-operat1Ve compa-
Mes which claimed to make two, three
and five per cent a week in the betting
ring When the bubble burst and Arnold
and company suspended payments, these
men expressed surprise that concern
which stood SO high and which was SO
much more conservative than other com
panies of similar nature, should go to
the wall.
1t is, asserted that United States Sena-
tor Burton of Kantas. was a heavy in
weston in the stock of the National Sc
curities company and that his name was
used as a reference in the company's liter
allure and circulars. Hundreds OF men
and women, it is said, invested IN the
con1panys get-rich- quick scheme because
Of the fact that United States senator
was proved to be investor in the bust
ness.
Arnold certainly played his cards we'll.
He made a star play by investing large
sums in horses, stock farms, and other
property which lent color to the conten-
ton that his business was of a permanent
character. His offices in st. Louis were
palatial. He opened book at one of the
ST. Louis tracks. and when he was invited
to leave there, transferred his base OF
operations to Chicago. He played the
races heavily himself. and managed to get
a lot Of good free advertising whenever
he pulled off coup. He got more adver-
Using by purchasing such horses as Goa
Altogether Arnold Is believed to have
taken in an average of $4,000 week for
four wears, or a total of something like
s1S 0O0, 900. His partners" numbered
5000 They represented all parts OF the
country and III walks Of life
The expenses Of running sucn pusl-
ness were of course, enormous. Big com
missions were paid the agents Of the com
pany for subscriptions. and naturally with
ca sh pouring in so fast, the business
methods of the company were not careful
A solicitor Of the company says that the
bookkeeping in the st. Louis office was so
bad that sometimes no record OF a new
subscriber would be entered for weeks
after his money was received. One man
withdrew $500 Of his $1,000 deposit, but
kept on receiving $50 week 6 per cent on
81 5000 for six months afterWard. The
cheapest girl in the office got $50 a week.
The =aary vas bStwee ms $40 and
given the clerks for lunch money.
One man was employed as solicitor for
the company He received 10 per cent
commission on all the subscribers he Sc
cured. His duties were to tell wealthy
business men that he was drawing $50
a week for the company. Usually no
more than this delicate method Of sug-
gestion was needed to make the victim
swallow the bait.
Arnold himself was an interesting char
acter. He was formerly a cab driver In
Des Moines, then a card sharp and later
a race track tout. Late In 1900 he drlfteo
into ST. Louis. Vic Britton and Harry
had conceived the idea of getting out &
booklet offering per cent on every dol1aa
invested. Britton pulled out, and Bro
laski, failing to make the business pay
sold out to Arnold for $3.50.
Pretty good when a man can buy TO-
$3.50 a business which brings IN $lS,ooooot
in four years.
The collapse of the scheme was not pri
rnarily due to any legislative investigation
or threat of investigation. The bushes!
simply got so big it couldn't be handled
Arnold's argument, in his own words
words which his agents were taught. wa
this "If you had $4,000 in cash, a goot
Jockey. a string of good horses, and faci
tties for finding out what was going on
don't you think you could turn out few
hundred dollars profit every week? Well
that is just what I am doing and the few
hundred profit on every $4,000 that hav
enables me pays per cent interest ever,
week If l intended to bust. YOU don
think I would buy race horses and farm
and other things that could be SEIZED d.
you? Not much; If was a crook
would be doing business in a differen
way
Arnold's friends say that originally h
was sincere in his belief that he could bea
the races, However. he soon found GU
his mistake. and his company continue
to do business Just as get-rich-quick con
Germs have done in the past-pay divi
dends out of the money sent in. by ney
subscribers No one got wise The cas-
continued to come in and the cab drive
wore diamonds like you read about. Blu
Arnold finally realized that he must b
ready to stand from under when the hous
Of cards collapsed. So he began syste
Inatically sailing his money. When tn
crash came and the police opened tn
safes in the ST. Louis offices, they foun
something over 500. But as remarke
before, the business methods Of the com
pany were always loose.
Perhaps no one will ever know just ho7
much Arnold had planted when he fo1de
,1p his tent like the traditional Arab an
silently departed from Hot Springs. N
on doubts that he got away with a com
Portable amount. A former employee {
the company said a. few days after tn
bubble was pI1nctured. 'I know wher
Arnold is now. He is in a place wher
he is not likely to be found, and he ha
a. bunch of coin that he salted." Prof
ably Arnold has saved but a small porto
~ tI,e gross receipts of .the~ concern. fC
besides his office expenses. cost of advel
sion on nearly every dollar he received
Still 1t Is estimated that he got away wit
between $1.50O.0O0 and s2,0000o0. Man
of the most successful cab drivers ghaA
done worse.
The success of Arno1d's scheme was
great that others initiated his method
John J. Ryan. owner Of the outlaw New
port track, was the largest operator amor
these imitators. Ryan is 81 years Of ag
and boasts that he never worked for al
other man ia all his life. Since he We
Ii years old he has been In business {
his own hook. He ran a messenger offit
and later an express office In Cincinnati
z Then he went to- Kansas. with enoue
money to operate as a. railroad contract'
In small way. La 1889 he cut figure
the opening of Oklahoma territory.
Ryan was a. lover of horses and gam
ster by instinct. In the early nineties
settled in ST Louis and acquired strir
Of horses. He also acquired or originate