Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1919-01-23
Swindling Bond Owners



For months the United States mails have
been used for the transmission Of letters and
circulars addressed to persons presumably in
possession Of Liberty bonds informing them
how easily they might use capital now tied up
at q low rate of interest in the purchase Of
shares in companies which would, so the circu-
lars have asserted double, and perhaps, quad
ripple and quntuple, their incomes. The ltera-
ture employed, as a rule, Is skillfully prepared,
and the propositions, whatever they may be, are
attractiveiy presented II would seem as il the
names Of Liberty bond purchasers had been
obtained in some way, and usually it is the
moderate buyer Of those national war securities,
or the small saver who seems to have been
selected for the attack.
II is said that in the Middle West some $20,-
100000 of Liberty bonds have so far been ex-
changed for shares in mining and oil promotion
companies of questionable standing, and that
the unloading of these bonds upon the market
recently, with those gathered in by financial
schemers in other parts of the country contrib
uted toward the decline in their market value
The success so far achieved by the mine and
oil stock promoters, and by others offering OPP
portunities for getting rich quick" has, It is
believed, so whetted the appetite OF the UNI
scrupulous that they are redoubling their efforts
to find ready buyers.
1t is a sad commentary upon the admins
tration Of the law in the United States if, not
withstanding the legislation enacted to prevent
misuse of the mails the postofice of the coun=
try is now being used as vehicle for the ac-
commodation of an army OF swindlers. The ques-
ton of protecting the Liberty bond and the
Liberty bondholder has been taken up in con-
gress recently; it is being discussed in several
of the states. Edward S. BTogan, assistant dis
trict attorney of New York, as a result of a re-
cent inquiry found that unscrupuous promoters
of worthless financial enterprises had taken adj
vantage OF many small bond buyers ignorance of
market affairs to start selling movement in the
market, that holders of government securities
might be induced to exchange them for stocks
of fictitious value, and on the strength OF his an
nouncement Of this discovery, Senator Loring
NJ Black, of the New York Legislature pro-
poses to introduce bill into that body for the
enactment of ''blue sky Law" similar to those
now in force in 81 of the states. With refer
ence to the matter he has written Mr. Brogan,
in part, as follows:
"Your investigation into the exchange of
valueless stock by so-called stock brokers for
Liberty bonds has strengthened my belief
that the state Of New York should have some
form of blue sky law on its books. "A great
many states in the union have such laws, but
some OF them seem very drastic and a him
drance to legitimate business"
1t must occur to thinking people, one would
suppose that this is a matter not for state, but
for federal action, and it must flash upon the
thought OF well-informed people that the rem
edy is already provided Laws carrying heavy
penalties are to be found in the federal statute
book which, if enforced, would soon prevent the
United States mails from being used as a We
hicle for and an accommodation to inscriptions
stock promoters. The nation has the laws; it
also has an excellent secret service; it has all the
machinery for detecting, arresting, indicting,
trying and convicting and imprsoning vio-
lators Of postal regulations. If il is really in
tended to protect the people who responded to
the appeals of the country in behalf of the
different Liberty loans why is not this ma
chinery put in motionl
There is something more than few cents
on the dollar involved in the depreciation Of
Liberty bonds; there is the question OF national
pride and national honor, and there is the ques-
ton of common solictude for and common
gratitude to those who in the time of its trouble
were ready to make any sacrifice within their
power for the countrys sake ~