Golden Valley chronicle. (Beach, Billings County, N.D.) 1905-1916, 1908-02-21

and the guarantee company When.
ever it is possible these companies To-
cate in bank buildings Iii order to
create this inference. He finds the
Offices Of the guarantee company re.
splendent in plate glass and mahog-
any, and in the elegant private Office
of the president he tells about his
business and the offer Of the capital.
list. The president contrives, IL posi-
BILE, incidentally to learn how much
money he has on his person or In q
bank in the city or near the city. II
he succeeds in drawing out this infor.
nation and learns that the sum Is. say.
$1,000, he eventually makes his propo-
sition to guarantee the bonds for dol.
BILE that amount. a,Y. 49,
"But can't pay more than half that
down." answers the manufacturer.
"Well,' responds the president Of
the guarantee company, I'VE are com
PEELED to have our fee in advance in
every case; our business is conducted
very much on the lines Of bank.
However, Mr.. Capitalist, who is to
place your bonds, has a material ill.,
terest in seeing this transaction 60
through, and no doubt he will be will
ing to advance half the fee and take it
from the proceeds of the bonds when
he sells them. Shall I call him up on
the phone and ask him?"
This is done and after little dick
ering the agreement is made. The
manufacturer goes back to the Office
of the capitalist, gets a check for a
thousand dollars, puts his own thou.
sand dollars with it and turns both
over to the president of the guarantee
company. Then the contract for the
sale of the bonds is completed and
signed. 1t contains provision that an
examiner shall be sent to examine the
plant, books and assets of the. manu-
featuring concern and make q report.
The capitalist explains that this is a
routine formality and merely by way
of official confirmation of the state
ments made by the manufacturer, Of
the accuracy of which the capitalist
has not the least doubt.
The examiner duly visits the manu-.
facturer and makes himself very
agreeable. After a time, when the
manufacturer gets no money from the
sale of his bonds and no satisfaction
from his letters to the capitalist he
makes another personal call. The mo-
ment he enters the Office he is made
to feel a decided change in the tenn.
perature of the place. The bearing of
the capitalist Is one Of outraged limo.
cence. He presses a button and in
structs the secretary" responding to
the summons to bring the report of
the special examiner who handled the
manufacturers case. This report is
read to the manufacturer, who is as.
founded to hear that 1t states that his
original representations, made to the
capitalists, were grossly exaggerated
and without substantial foundation,
and recommends that the manufacture
er be prosecuted for attempting to de-
ceive and swindle the capitalist, who
terminates the interview by making
the manufacturer feel like a felon about
to be sentenced. If the manufacturer
does not himself plead for mercy the
capitalist finally indicates that he is
inclined to be lenient and has deter
mined not to prosecute; but II the
manufacturer is obstreperous he will
be punished to the limit of the law"
Meantime the worthless check for
$1,000 sent by the capitalist to the
president of the guarantee company
has been torn up and these confed-
crates have divided the manufacture
er's $1,000 between them. This scheme
has been worked with many variations
upon hundreds Of business men look
ing for capital. They have taken in
hundreds of thousands of dollars in
the country at large and have been
particularly successful in Chicago.
However, very considerable number
of them have been prosecuted by fed
eral and state authorities and have
been sentenced to heavy terms.
Another scheme which brought gen.
erous fortunes to it's operators, and
which also contains the element of po.
tentfal blackmail, is the wildcat in
surance fraud. The small business
man was frequent victim of this
swindle. The names of the wildcat
insurance companies were invariably
built upon the titles Of the standard
insurance companies in order to lead
the public into confusing their identi-
ty. Agents for these wildcat concerns
had no difficulty in placing immense
amounts of this insurance at cut rates.
The householder, the farmer, the mer.
chant or the manufacturer figured
that he had picked up bargain in in
Surance and had made a nootoriol COZ,