Among the first of the get-rich-quick schemes into which the public
poured millions was the "turf investment" concern. The "literature"
of probably no other class of swindle was so plausible as this. The
promise was to pay 5 and in some cases 10 per cent on the investment
each week. The method by which the promise was to be fulfilled was
this: The money invested was to be placed in a pool and used as
capital in playing the races. A standard bet of a certain amount was
to be made. If this wager was lost, enough money out of the pool was
to be bet on the horse picked by the managers of the concern in the
next race, to recoup the loss on the first race, win the amount set
out to win on the first race, together with a like amount on the
second race. If this wager was lost, the process was to be repeated
on the next race, and so on until a wager was won. Each time there
was a winning, a large enough sum would have been bet to recoup all
losses on previous races and win a fixed amount on each of the races
played. Some concerns claimed to play the favorite horses in the
betting, others the second choices to win and others to bet according
to "inside information" derived from horse owners and jockeys.
Regardless of the variations of the scheme, the general plan was the
same. The prospectuses, in a most plausible way, set forth the claim
that "beating the races" was merely a matter of having a large enough
capital at hand to continue the progressive betting plan.
By the claim that horse racing was as legitimate a calling as dealing
on the Board of Trade or Stock Exchange and possessed the additional
advantage of being open to persons of small means, a strong appeal was
made to the poor.
Of course, none of the money that poured in ever was bet. Had 5 per
cent a week on all the millions contributed by the public to this form
of swindle been actually derived from the bookmakers, every penciler
in the country would have been bankrupted in a month. The remarkable
feature of the "turf" investment scheme is that this phase of the
matter seemed never to occur to investors, and the other palpably
impossible phases of the operators' claims were also overlooked in the
effort to secure 260 per cent a year on the investment made.