The Lancaster news. [volume] (Lancaster, S.C.) 1905-current, 1918-07-12
Treasury Department Issues
Warning Against Certain
Scheming Persons.
FLAGRANT CASE is GIVEN
New Yorker Would Trade Stock
For Government Securities
With Big Profit for Himself
in the Transaction.

Washington. July 1.-THE war
loan organization of the treasury de-
partment has issued warning
against scheming individuals who
are attempting to persuade holders
of liberty bonds to exchange the gov
| ernment securities for commercial
stocks or Wall Street securities. The
treasury allages that the appeal is
| addressed particularly to rural
bondholders through banks, the
banks being requested to invite far
mers to sell their government bonds
One individual, the treasury de-
partment says. argued that if there
rural owners some smooth
tongued salesman might get them
away from the farmers. The warn
ing issued here reads:
Despite the desire of the treasury
department and others interested in
successfully financing the war to in
duce liberty bond owners to patriot
ically keep their bonds, agents with
various alluring schemes for defeat
/ ing this purpose are raising their
! heads.
One of the most fragrant recent
cases is that of man signing him
self Sanford Holmes, 67 Wall
Street. New York" Mr.. Holmes,
through a circular letter. sought the
cooperation of bankers in inducing
Liberty bond owners to trade their
! government securities for we'll
known stock. Such an exchange, he
said, would greatly increase the re-
turns to the investor but he ignored
the fact that execution of his plans
would yield him an enormous profit
and place in the hands OF the owner
of liberty bonds another investment
of very much less value.
AS means of solving the con-
sciences OF his proposed confeder-
ates. Mr.. Holmes declared that in re-
lieving the people of their bonds
they would really be playing the part
Of good Samaritans" If they did
not unselfishly induce rural bond
holders to exchange their govern
fire insurance and other smooth
tongued stock salesmen" would at
tend to it," he confided
The alluring book value" of the
stock which Mr. Holmes aimed to
| exchange was the hook upon which
he attempted to catch holders OF lib
erty bonds. In a circular letter dat
ed May 21, 1918. sent broadcast to
banks and addressed particularly to
the president. vice-president or
cashier" Mr.. Holmes offered 21
shares of stock, book value So
1856" for s3 900 in liberty bonds OF
any issue. Figuring on the basis OF
an annual 10 per cent return on the
stock and PEI cent on liberty bonds.
| Mr. Holmes declared the holder Of
Fl shares of the stock would receive
$50 more year than the holder OF
$4,000 in liberty bonds.
One very important thing that Mr..
| Holmes failed to state was that on
May 28, the closing day for his offer
II shares of the stock he mentioned
we're worth. including brokerage,
s2354.63 on the New York stock
exchange, while the amount of liber-
~ bonds for which he proposed to
trade this number of shares OF stock
could have been sold for not less
than $3.50. He also neglected to
point out that his profit by such a
deal as he proposed would be s495.-
81, while the regular commission on
reputable stock exchange for such
transaction would be $323.
Mr.. Holmes generously offered
commission of 800 to bankers on
each such transaction which they
helped him put through Patriotic
bankers, however. who are co-operat-
ing with the treasury department I'm
seeking to induce people to hold
their bonds, not only decine,. to aid
Mr.. Holmes in his scheme but also
notifed the treasury department OF
It,,
owners OF liberty bonds are warn.
ed to deal only with reliable ,ersona,
In transactions of any kind I'm which
their bonds are concerned.