The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1904-09-21
FRAUD ORDER ON
LOCAL AGENCY
Postal Authorities After Pre-
ferred Mercantile Company.
f.B. JACOBS UNDER THE BAN
PROMOTERS OF DIAMOND CON-
TRACT FORBIDDEN MAILS.


Washington. D. G., that a fraud
order has been issued by the postmas-
ter general against all the officers and
agents Of the Preferred Mercantile
company of Boston, Mass. which Is
SAID 10 be engaged in a fake diamond
selling and get-rich-quick money
scheme
This order which is one of the most
sweeping of lis kind ever promulgated,
specifically mentions George l.. Still
lngs president; Guy c. SUnings. seere-
tary. of Boston, and Z. 3. Jacobs of
SAT- Lake City, and many others in
various cities in the eastern, middle,
southern and western states who are
agents for the company
IL is alleged in the order that the
Stiilings, Jacobs and the other parties
named are conducting a scheme or de-
vice for obtaining money through the
mails by means OF false and fraudulent
pretenses, representations and prom
lses, in violation of al act of. congress
Mail Ordered Turned Back.
The postmaster general, under au-
thority of the act of congress for the
suppression of lottery traffic through
International and interstate commerce
and the government postal service, has
forbidden Postmaster Thomas 10 pay
any postal money order drawn to the
order Of +. Il. Jacobs, and Mr.. Thomas
Is instructed 10 return all letters,
whether registered or not and all other
mail matter which shall arrive at the
postoftice in Salt Lake City addressed
10 Jacobs to the offices at which they
were originally mailed, 10 be delivered
back TO the senders, il known, with the
N oil xr-r-fff
stamped upon the outside Of the let
ters or packages. If the names of the
senders cannot be ascertained the mail
is TO be sent to the dead letter office
after being labelled Fraudulent
Guy G. Stillinss, treasurer of the
company, was arrested in Boston last
week on the charge of violating the
postal law by conducting a diamond
lottery. a published statement shows
that the company has written con-
tracts aggregating $1,655.030, and that
il has forty branches scattered
throughout the country.
Jacobs in Explanation.
F. 3. Jacobs, who runs the Salt Lake
branch OF the Preferred Mercantile
company, has an office in room so,
Atlas building. There he was found
yesterday by a Herald reporter, to
whom he handed q card on which was
printed, p. b. Jacobs, G. E., l.. s. Dep
uty Surveyor. Office. room Nichol-
son block, 81 North Center street. PhUe-
nix. Ariz. Twelve years experience in
patenting mining claims in Arizona
mines, canals, roads, land, etc"
That card shows what l was doing
before l engaged in this business last
June, said Jacobs Asked 10 explain
the nature of the business transacted
by the Preferred Mercantile company,
Jacobs said:
The company enters into contracts
with its customers 90 receive payments
of money from them and supply them
with diamonds. Anyone taking out
contract and making all the payments
gets what the company agrees to give
lin. We write d contract that is ID
run not to exceed 10 weeks, on which
each person pays a dollar a week At
the end Cf the 10 weeks he gets $3.50
upon cancellation of the contract, pro-
Vlded he wants money 1t is optional
with him, however. TO accept $3.50 in
cash or take a diamond worth 500
The contracts mature in the order IL
which they are issued.
How many contracts have been
written in Salt Lake?" Jacobs was
asked
about 200. l have written $50 since
Aug. l. and most of those taking them
out are among the leading business
and professional people of the city"
Your company agrees TO pay $3.50 i'm
cash or give diamond worth 500 III
return for $110. How can the corr
pany afford 10 do this. and where does
it make its profit. if its business is not
fraudulent"
Profit in Forfeitures.
The company's profit comes in from
the collection of the fine of > CENTS
a week on delinquents and on the for
feiture of payments made on contracts
after the lapse of i've weekly pay
ments."
Do you fine many contract holders,
and do many Of them forfeit their con-
tracts through not making five con-
secutive payments"
Yes a great many The lapses VIII
exceed 80 per cent. During my expert
ence here since June 1 have had lapses
of contracts upon which as much as
SD had been paid. But that is nothing
unusual. There is where the life ir-
surance companies make their money.
Statistics show that the average ratio
of Insurance lapsing in proportion to
the amount written by tWenty-four Old
standard life companies ia, the ten
years from 1889 10 1898 was Ga per
cent
Jacobs said further that the Preferred
Mercantile company was organized III
der the laws of Massachusetts with
capital stock OF 100000 and that he
felt sure the Sullings under arrest in
Boston would be discharged upon the
hearing of the case against him. ia
cObs has not received any mail for
Two days, and he deems this a great
hardship. He thinks the postal au-
thorties should permit him TO get his
private mail-letters that are not frorl
persons who have invested or cOnfem-
plate investing in contracts with tha
Preferred Mercantile company. But the
order embraces all kinds of mail mat
ter that may come addressed 90 him,
ana Postmaster Thomas has no dis
cretion in the matter.
One of the company's circulars con-
tains the following list Of Utah resi-
dents. TO which it Is alleged money has
beeen paid under the contracts 40
given:
Blood. H. C.-...-.-. Salt Lake City rs 80
Salt Lake City Si 80 Teudt. C. w -.....
Durham. A. D.. Salt Lake City 123 70
salt Lake City 81 % Wood, William. jr
Eikrcm. 49, salt Lake CITY 50 90
Salt Lake City 20 75iCarVer. j. F.......
Fraisland IL. ...... Ogden $1,000. IS 80
salt Lake City 80 So Christensen, Gus 49,
Jensen J. S-.--...-..- Ogden .... a l.
salt Lake City - 2iLeWis. Robert B..
Kirkwood, ]. S. iOgden ......... l2S 50
Salt Lake City 240 %, Litzenberg, H. H.
Nelson. A. W.. Ogden ....... g. O5
Salt Lake City Is l5l Martin. H. ..-...-.
Olsen. B. -........... Ogden -....... IS 80
Salt Lake City 81 S0lMcGovney. A. NJ.
Pinkerton. Dr.. G. II, Price ........... $50 90
Salt Lake City 81 80 .Richey, a. F.........
Ress, Mrs. b -, Ogden Us Ga