The sun., 1918-07-09
TREASURY EXPOSES
NEW BOND SCHEME
Promoter Wanted to Trade
"Well Known" Stock for
Liberty Holdings.
POINTED TO BIG PROFITS
Offered Twenty-one Shares
Valued at S3,486 for $4,000
Worth of Y. s. Securities.
Special Despatch TO TEE SrN


WASHINGTON. July S.-A new schem.
to separate patriotic purchasers from
their Liberty bond oldngs that thu
Government has urged them TO keep was
exposed by the Treasury Department to.
day. 1t is one OF many such instances
that come up despite all warnings.
In an official statement the Depart.
ment declares "one OF the most fragrant,
recent cases Is that OF a man signing
himself Stanford Holmes, g. Wall street,
New York"
Mr.. Holmes. according to a statement
issued to-day by the Treasury Depart.
ment, II rough circular letter sought
the cooperation of bankers in inducing
Liberty bond owners to trade their GOV.
eminent securities for we'll known
stock. According to the Treasury OIL
Gals Mr. Holmes pointed out that such
an exchange would greatly increase tho
returns to the investor, but ignored the
fact tfat execution of his plans would
yield him enormous profits and place in
the hands Of the owners OF Liberty bonds
another investment Of very much less
value
las a means OF saving the conscience
of his proposed confederates, says the
statement. "Mr. Holmes declared that
In relieving the people of their bonds
they would really be playing the part OF
good Samartans II they did not un.
selfshly induce rural bondholders 10
exchange their Government securities
for something else fire insurance and
other smooth tongued stock statesmen
would attend to 1t, he confidcd
THE allur.ng book value of the stock
which Mr. Holmes aimed to exchange
was the hook on which he attempted
to catch holders of Liberty bonds. IN
circular letter dated May 81. 1918, sert
broadcast to banks and addressed par
ticularly to the president vice president
a. cashier Mr.. Holmes offered twenty
one shares of stock. book value, $3,tN6'
for 1000 in Liberty bonds OF any issue.
| Figuring on the basis Of an annual IN
per cent. return on the stock and 4 per
cent on Liberty bonds. Mr.. Holmes de-
| clared the holder of twenty-onc shares
Of the stock would receive 800 more
| wear than the holder of $4,000 in Liberty
| bonds
zone very important thing that Mr..
| Holmes failed to state was that on May
| %, the closing day for his offer twenty
one shares of the stock he mentioned
were worth. including brokerage, 50.
| ~
change. while the amount Of Liberty
bonds for which he proposed to trade
this number OF shares of stock have been
sold for not less than $3.50. He also
J neglected to point out that his profit nv
! such deal as he proposed would he
| s49J.37. while the regular commission
on a reputable stock exchange for such
a transaction would be s3o3,
Mr. Holmes generously offered cont
| mission Of 500 to bankers on each such
transaction which they helped him put
through Patriotic bankers. however.
who are cooperating with the Treasury
| Department in seeking to induce peon's
| to hold their bonds. not only declined
to aid Mr.. Holmes in his scheme, but
also. notified the Treasury Department
| Of II.
Owners OF Liberty nonds are warned
to deal only with reliable persons In
transactions of any Kind in which their
bonds arc concerned"