Evening star. [volume] (Washington, D.C.) 1854-1972, 1905-07-22

Ny fs:nily win ftnish ey.ry.hins IN.
S1oo par. The total investment in cash was
the cost of the handsomely engraved stock
certificates and the Incorporation fee. The
money required by law TO be paid in" was
paid by one of the five, who was promptly
the money down" again his salary pay
able in advance.
Formation of a Company.
None of the names of the other four pro-
moters appeared in the papers of the com
pany. With the exception of the president.
all the officers were clerks or humble ac-
quantances of the financiers. One was a
porter. Another was the shoeblack who
had been polishing the presidents shoes on
credit for some weeks.
Between them the five promoters had
twenty thousand dollars in real cash. Each
took four thousand and within a week
the five had opened accounts with as many
big banks, each in his own name.
The accounts became highly active i'm
mediately. Every day each promoter would
draw checks in favor of the rest. There
were busy days when each genius would
do business running up to 10000 or
$4,000, and yet at the end Of the day the
original deposit of $4,000 would still be in
each bank.
In the meantime curb brokers were get
ting modest orders at intervals OF two or
three days for Loyalty Gold Bond Invest
on the market-for the very good reason
| that it was all locked up in a safe. Being
unattainable, it assumed a certain value.
| like all other unattainable things.
When that happy state arrived a curb
broker who received an order for 200 shares
was delighted by learning that man was
willing to sell that quantity. But he was
coy on being approached, and demanded
higher price than the brokers' customer
| had authorized. After brisk negotiation
the customer agreed to pay the asked fig
| ure.
Then small blocks of the jealousy guard
| ed stock began to appear. They were snap
ped up eagerly. The stock began TO get
recognized position.
For a year the sales and purchases con-
tinued. OF course, Wall street didn't know
that all the dealing confined to the
five promoters and their fgureheads and
that all the stock sold and purchased found
its way back to the same safe.
Tapping" the Banks.
It cost the syndicate a woeful amount in
brokers' commissions, but that was money
well invested, for when the stock had
reached respectable quotation, the five
promoters, honored and appreciated clients
of five large banks by this time, began to
send large checks in to be certified, and
each man in turn covered the certifcation
by placing in his bank all the money that
the other four had.
Now, generalization is a very, very
wrongful ana lnJuSllndDle 1llnS, morally
and also legally. Yet it must be con-
fessed that it is not an uncommon weak
ness as the world learned by the sworn
though reluctant testimony of certain great
national bank officials recently.
So there came a few days of teverish
business, and the five banks in turn over
certified the five accounts to amounts rang
ing from 81 900 to $4,000. The over-certif-
cations were made good promptly. Then
came another still more busy rush, and the
CONGRATULATIONS amounted TO as much as
$4,000 by each bank in turn. And again
they were made good, by the very simple
method of putting into each bank in turn
the total assets of the secret syndicate.
But the third time the Decentralization
was on the banks-and unhappily each had
overcertitied to the tune of $4,000 Each
bank promptly "squealed," and each pro-
moter promtly informed his bank that "a
big financial operation on, but
said each. 81 can cover you thoroughly. l
have S201OO0 worth of stock of the big 10y
atty Gold Bond Investment Company, and
L will put 1t in as collateral to cover the
certification."
The banks looked up the quotations, found
that the stock had been in great demand
by investors" sighed, accepted it and GER
titled the checks.
Next day each OF the five accounts be-
come suddenly, depreSSingly, monotonously
and completely inactive. After a few more
days the five bankers reproached their five
clients for having become so cold and DIS
tant The five clients replied that they
were up against it; that they couldn't meet
the generalization, but said they Won
know you have lots of collateral, so you're
all right
Alas! The banks found that they were
all wrong. The buyers of Loyalty Gold
Bond Investment stock, formerly tearfuily
eager for 1t, had vanished from the face of
the earth The five promoters vanished.
too. temporarily though they did this only
from an excess of prudence, for the banks
really couldn't dare to do anything except
to bear their pain in silence.
Legitimate Promoters.
Between the first kind of promoter, who
fools himself more than he ever does others,
because his schemes require too much mag
nation for the average investor and the
second kind. who are common swindlers
| there are all kinds and degrees.
Promoting legitimate business enterprises
has become a recognized profession, and
there are many hundred prosperous highly
reputable and influential men in any large
city, who pose frankly and undisguisedly
as promoters.
The days visitors to a promoter of this
class are revelation of the weird, fantas-
tic, Arabian Nights schemes that breed un-
der the shabby hats of a citys impecunious
striyers The plans of nine out of ten
would-be financers are built on the prin-
ctple of gaining immense sums without in
Vesting penny.
Now, here" says a seedy stout man
with a double-breasted front of grease, as
he fishes dubious papers out of the still
more dubious lining of his ancient silk hat
now here is the map of little parcel of
land down on Long Island that l can pick
up for $1,000 cash, sir. Here's my scheme:
We can cut this up into 5000 building lots
all paper, of course-and plant a few
surveyors stakes to mark the streets. I've
got a surveyor who'll do the whole job for
$50. No, no; | don't want you to furnish
the 5000 to buy the land. My plan is to
make a deal to buy it, and then after we
get the owner tied up. but before we close
the deal to advertise a sale of lots in our
new home. Riviera-on-the-Isla (what do
YOU think of that for a name ehO at $50
lot. on the terms of 81 down for each lot
and so cents month till the balance Is
paid off.
Now, all we need for that is, say, $500
for advertising. If you'll put that up for
your share I'll throw in my idea and my
services for mine. We are certain to sell
all the 5000 lots in a month. People will
jump at the chance. Think of the headline
of the ad. "A Home for 81 That means
that we will have the 5000 paid in before
we have to pay for the land. After that we
haven't got to do a thing. not single, soil
tary thing, except to sit with our feet on
cur desks and take down s., 500 month for
a ton re