The Washington times., 1923-11-13

Better Business Bureau After
Financial Schemers With
Questionable Proposals.

That statesmen representing
questionable financial investment
organizations have been bleeding
Government clerks in Washington
for years without public lnowl-
edge and that the operations are
now being carried on in an anlaz-
ing variety Of lines has been re-
vealed as result Of the CAM
paign Of the Washington Better
Business Bureau to stamp out. the
blue sky financial operator in
Washington.
Campaign Under Way.
It was announced today that the
bureau is handling an average OF
thirteen financial cases q DAY ana
that this average is steadily grow
ing as the result Of more WIDE
spread knowledge Of the work OF the
bureau.
Though the campaign is yet barely
more than under way eighty one
cases have already been submitted
to Howard c. Cool. director. This
total is held as unusually large in
the experience Of Better Business
Bureaus throughout the country.
From the eighty-one cases submit
ted the bureau has opened thirty
eight new files, covering promotions
concerns which have been operating
mn to this time without knowledge
of police authorities or the Better
business Bureau.
Activities Investigated.
OF fifty-three requests for informal
ton regarding promotion plans:
forty-three have been answered anu
ten are still under investlga1lon'
The great majority OF the cases
cover alleged questionable actlVl-
ties, it is stated.
Al large percentage OF the cases
renresent what are classed as an
soiutely illegal and fraudulent
schemes. There 10 yet no metnoo
of estimating how much money mas
haen taken from District people
through operations Of this sort, but
the total is expected to run into
very high figures.
"The average inquiry based on
o,Ir first eighty-one cases." Cool
explained, "is found upon investiga-
| ton to be a result Of questionable
| ar speculative financial operations.
"Of course, the responsibility rest
| ing upon the bureau Is very heavy.
| MANY of these propositions which
| are now purely blue sky schemes,
| depending upon future developments
for success or failure, may prove
successful If allowed to continue.
Exchange Of Stock.
eve can, however, class as really
| good investments only those in
companies which have built up a
surplus which will insure their life
through a period Of financial de-
preston"
one of the clevorest of the
schemes so far uncovered by the
| Better Business Bureau and one
which, IL is understood, has been
used successfully in Washington
has the advantage of allowing
plenty Of time for the operators tc
make their cleanup and disband
/ before there is any question regard
/ ing their activities which may lead
to investigation.
A "high pressure" salesman will
secure knowledge that a prospective
| customer holds stock in a legiti
mate. going concern, though that
| stock may at the time be far be
low par He will tell the prospect
that he represents a new company
which is issuing stock and viii
| offer the customer an opportunity
| to acquire the stock without risk
and hold it without payment for 8
sufficient length of time to make
certain the claims are good
In return for his stock the sales
man will get the prospect to ALLOW
him to hold the prospects goot
stock as a security The prospec
is not required to indorse his stool
over to the salesman. The sales
man, however, places it in an en-
velope, seals it, and asks the pros
pect to sign his name on the en-
velope, which, he says, will then b,
deposited in q vault until the uros
pect decides to exchange it for tn
salesman's stock.
Instead of depositing the pros
poets stock, however, the salesman
cuts the envelope apart and on tn
slip of paper above the prospect'
signature prints a power of al
torney for the sale OF the stock
which is promptly put on the mar
ket. Six or seven months clans
before the prospect thinks to max
| further inquiry and, in the mean
time, after two or three months q
intensive work, the promoters. haX
ing made a substantial cleanup
disband and are well out of tn
-. l~uAokN~1As.