The firm of E. J. Arnold & Company, of this city, is one
of our largest depositors, and we consider them amply
responsible for every obligation they may assume.
AMERICAN CENTRAL TRUST COMPANY,
By EDWARD BAUDER,
Sec'y & Treas.
The disaster was brought about by the appointment of a committee
by the Missouri legislature to investigate the "get-rich-quick"
situation. St. Louis had become the haven of every conceivable class
of swindlers, who swarmed there in such numbers that the legislature
deemed it wise to look into the matter. What motive inspired it to
take this action was a mystery. Sufficient, however, to observe that
when it came to following out its own recommendation to pass laws that
would drive the "get-rich-quick" companies of all kinds out of the
state something stopped the legislation.
The investigation of the "get-rich-quick" concerns in Missouri by the
State Senate Committee resulted in an elaborate report, which was
presented March 3, 1903. This report had the following to say of the
turf investment companies:
"These institutions are of modern origin. The pioneer
in this field, especially in this state, seems to have
been E. J. Arnold & Co. Then followed Ryan & Co., the
International, The Christian Syndicate, Brolaski, Thomas
Walsh, Maxim-Gay and others.
"These concerns were presumably prosperous until the
examination which was begun by the grand jury, instigated
by the circuit attorney of St. Louis, Hon. Joseph W. Folk,
and your present committee. When the crash came, company
after company closed its doors or refused to pay back
to depositors on demand, and upon examination of these
companies, we found them to be mere shells, with little
or no money or available assets on hand, and the millions
of dollars handled by them either paid out in dividends,
squandered and gambled away on race tracks, or absorbed by
the officers and managers of the said companies.
"The evidence discloses the fact that E. J. Arnold is
supposed to be in Mexico, the books of said company being
in the hands of the grand jury. So far as the search under
legal process has developed, no assets of Arnold & Co.,
except a stock farm and stock thereon, office furniture and
fixtures, and a few hundred dollars in cash, were found.
"Ryan & Company claim that they have on hand $200,000,
which has been attached and garnisheed, in the hands of the
depositories, and the same process has been used to take
possession of the real estate holdings and other personal
property.
"George A. Dice, inspector of the postoffice, in charge of
the St. Louis department, testified that he had made an
examination of E. J. Arnold & Co. and John J. Ryan & Co.,
and that on their showing Arnold & Co. had on hand $160,000
more assets than their liabilities; that two different
examinations of these concerns were made by him and his
deputies, and that in the last report of November and
December, 1902, his report to the department recommended
that they be cited to appear before the department and
answer as to their liability for criminal use of the mails,
and that so far as his report went they were notified
that there was a case pending against them; that the
ruling of the department was not in accordance with his
recommendation; that from the evidence it appears that
the department at Washington, by some process or other
unknown to your committee, overruled the recommendations of
the inspector, dismissed the cases pending against these
companies, and they were allowed to proceed with their
process of absorbing the people's money. Had the department
at Washington acted promptly and properly upon the
recommendation of the inspector, millions of dollars would
have been saved to the people of the State of Missouri and
other states.
"In order to protect the people who are attracted by the
fair promises and the payment of extraordinary profits
or dividends, and to prohibit the improper and vicious
misapplication and absorption of the money of the people
who confide in the representation of investment companies,
your committee recommends that a law be passed which will
prohibit the doing of business by said turf investment
companies or other like institutions in this state."
If one should moralize on the turf swindles it would only be to repeat
the old story--avarice. Nothing else explains why they are permitted
to flourish and rob, and then a newspaper story and no more.
Justice, blind and decrepit, is unable to scale the insurmountable
barrier of the swindlers' "bank roll." But there is still hope, for
from Washington we hear from day to day that another boodler has been
landed in the grand jury net--thanks to President Roosevelt, who, if
he knew all, would do more.
When the last paragraph was written the finale had not been reached.
But the strong arm of the federal government has at last been felt
and the turf investment companies are no more. It is impossible for
even the veriest sucker to be taken in by them any more, and their
literature would be barred from the mails in an instant. It is all
over with the turf investment companies. "_Requiescat in pace._" May
they rest in peace.