The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1907-09-01
The Signs by Which Those
Familiar With Their Opera
tons Recognize Their
Fraudulent Char
acter.
BY GEORGE u. coRTELYOU.
Secretary OF the Trensury.

BY GEORGE u. CORTELYOU.
Secretary OF the Treasury.
There is no work under the juris-
diction Of the United States Post-Oflce
Department which presents more DIFF
ficulty to Its officials than the admin
istraton of the law relating to the
detection and suppression OF the swind-
Iers who use the United States mails
to prosecute guerilla warfare upon
the people of this country--and espe-
cially upon those whose industry and
thrift have enabled them to put by a
little surplus against the inevitable
rainy day"
/ have been asked to say few
words on the subject of financial
frauds that operate through the mails,
and take pleasure in responding 10
such request In the hope that what
shall say may have the effect of pre-
venting some Woodworking and thrift
~ person, who has contriyed by dint
OF self denial to save up little sur
plus. from falling a ready prey to
the hundreds OF schemsrs who are liv-
Ing by their wits and making for
tunes from honest but credulous indi-
yiduals.
Perhaps the most important thing
to the possible victim Is to know what
are the most common characteristics
of fraudulent schemes-the signs by.
which those familiar with their opera
lions recognize their fraudulent char
acter.
Watch Excessive Profits.
One of these earmarks Is the prom
Use OF excessive profits or dividends;
another Is the actual payment of eX-
cessiye dividends--at the start! One
or both of these features Invariably
accompany all such schemes. And In
the days when frauds IN the mail are
numbered by the thousands and COM
petition for the spoils of the peoples
savings is almost as keen as IL Is IN
Legitimate lines OF business, the throw
| ing of bait in the form OF severai
| large monthly dividends has come 70
be regarded as practical necessity.
There was time when the mere
promise Of big profits was enough 10
insure a liberal response, but TO-DAY
the use of .dividend bait" Is regarded
as a necessary and highly profitanle
investment on the part OF those VINO
wish to secure the largest possible re-
turns.
the great .Fund "" swindle. oper-
ated in Chicago in the early nineties.
NAV be cited in illustration OF tne
type. 1t is especially typical, not only
hncluSe :
because 1t has apparently furnished
the model upon which many succeed
| Ing frauds have been based. 1t is true
that many, perhaps most, OF the pres
ent-6ay schemes are seasoned Win the
t.inyestment' flavor. rather than that Oh
speculation. but the principle OF their
operation and appeal Is the same. rms
| Is the way in which the historic "fuhd
w" was worked:
finder The name of "Fleming & Mer-
RAMS Mutual Cooperative Fund W..
ian appeal was made to the people to
send their money for the purpose OF
| creating a great centralized fund.-" to
| be used in speculative operations IN
grains. provisions and stocks OH the
Chicago Board of Trade and the Stock
| Exchange, the emphasis being placed
OH the opportunities offered by the
Board of Trade.
| Tielr Catchy Plea.
III all the printed matter put out by
Ythese clever swindlers the plea was
| substantially this: 1.-THE great fortunes
iof the kings of the pit have been
built up because these men had cap
5ital enough to swing the market their
/ way; there has been no guesswork.
I NO chance. no gamble about It, for they
had the ready money with which to
back their gigantic deals. They knew
lin one controlling hand, and were able
\ to make the whole country Of smaller
spectators, whose capital, although
Immense in the aggregate, was under
scattered control, pay tribute to them.
1T is time the common people, the
small spectators, learned this trick
/ OF the captains of industry, coneen-
.Itrated their scattered capital In one
4 irresistible body, placed it in capable
lnN Iy IA
1.-The kings of the pit some of the mil
4 lions which for years the smaller
4 speculators have been contributing tc
\ these swollen fortunes.
Il Your available money, added to thai
4 OF thousands and tens of thousands oil
i other small SPECTATORS will form q
Iccntralized fund of proportions which
Twill dwarf the available money OF The
biggest speculator who ever operated
Ion the Board OF Exchange. The manip
ulation of the market by the means Of
. this huge fund Will be based upon the
Investigations of Il corps of the shrewd.
est and most capable crop and marke
exports of the country, for the hug,
proportions of the fund itself and thu
!. lproiits at stake not only render tn,
employment of the best talent neccs
!, sary, but also easy as tho proportion
sIof the expense to the aggregate profits
twill BIO trtlins,
! For purposes of convenience ",
! lave placed shares In this great Fund
! W. at ten dollars, IL you send IN,
800 you will act the profits on tel
shares from tho moment Your remit
tsncc is received. II n thousand dol
lars, the profits ON 100 shares"
How Dividends We're Paid.
This is the gistaof the appeal whicl
:, went out to the cities, towns and farm.
or the country, The response was IN
Simultaneous and enormous Although
} tho scheme was in operation only
few months, 1t took In over $2000,00O
In the malls or the day on whlcl
Post Office Inspector Stuart, of Chicago
4 enforced the fraud order against thi
II swindle more than $4,000 in post
! office money orders alone was received
lat the "Fund W. office, The check
books az tho concern showed that thi
] money, with thnt received in othe
forms q remittance, was to bs used