Hopkinsville Kentuckian. [volume] (Hopkinsville, Ky.) 1889-1918, 1906-05-05
$4,000 IN
A SINKHOLE.
--------------
American Reserve Bond Co.
Did Big Business Here
For Ten Years.
LOCAL PEOPLE SUFFER.
But Little Hope For Even a
Nominal Amount Being
Returned.
LOCAL PEOPLE SUFFER.

The American Reserve Bond Com
pany, alleged bankrupt, formerly
the Southern Mutual Investment
Company, of Lexington, KY, has
swamped different parties in this
city, it is believed, to the amount of
SIS, 900. This figure based on known
and estimated losses of nearly $780,
600, is not believed to be excessive,
but below the total, if all the hold
ers of stock were known. The Ken
tuckian has been able,%to learn the
names of but ten gentlemen who
have heen putting their money into
the concern during a period of about
ten years.
Tuesday at Lexington proceedings
were instituted in the Fayette circuit
court to place the affairs of the COM
pany in the hands of a receiver, fol-
lowing the action of the Federal
court in Chicago. This was done and
J. c. Rogers, clerk of the Fayette
circuit court, was appointed receiver.
Mr.. John Billiard, the local repre-
sentative of the company, was seen
yesterday. His only statement was:
Il don't know anything about the
matter except what | have seen in
the papers. The state officers say
they will be able to pay back every
thing they owe"
The Courier-Journal's Chicago spe-
cial, in speaking of the company's
mode of doing business, says:
The business of the company was
conducted upon the two-for-one"
return scheme, and bonds were sold
under a guarantee from the compa-
ny to redeem them at from $50 to
250 per cent. Of their face value,
and in addition pay an excessive rate
of interest. According to evidence,
which has been produced so far,
only one redemption ever has been
made, and this was about $165, 900
short.
In order to prevent the necessity
Of making redemptions, it is said
that the company adopted several
classes of bonds. AS soon as one
class neared the redemption point
the agents Of the company would
persuade the holders to switch their
to another set of more fa-
vorable appearing bonds, which
were irredeemable for some time.
By this plan, it is declared by the
bondholders, who are attacking the
solvency of the company, business
has been conducted for so many
years without exposure.
In order to so continue business
three of the companies operating
upon such basis, were combined
about a year ago into the American
Reserve bond Company, which was
Incorporated in Kentucky. The
Mutual Investment Com
,any, the North American Invest
nent Company and the Colonial in
-estment Company were included in
his merger, and, although the COM
inc was incorporated in Kentucky,
he general Offices were transferred
Chicagowhere the application for
receiver was granted two days sage.
An interested attorney of Louis
lille says he thinks the liabili-
les of the company are about $5,-
90, 1000, with assets of about SO, 000,-
90. Louisville bondholders are
to have lost 100000.
Jnder the insurance laws of Ken
lcky every company is required to
eposit certain per cent on the
mount CT business done in the
tate. If the company did as well
a other small cities and towns as in
.ouisville and Hopkinsville, pro
alta disbursement would not allow
cry much to anyone.