Chapter C: E. Collins & Co., George D. Jones and Charles

Thompson, New York 30,000
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Total $10,162,000

GIGANTIC TURF SWINDLE.

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.

GET-RICH-QUICK SCHEMES.

As in the horse swindles, the older investors were paid their dividends from funds sent in by new ones. No attempt was made to win dividends in the market. As the gullibility of the "suckers" became a little dulled, innovations to increase the plausibility of the schemes were made and new forms of bait devised.

"Turf swindles" have flourished, while the victims, who number tens of thousands, dare not raise their voices in protest or complaint, well knowing that they would not only be the butt of ridicule in their community, but also that the world at large would rather rejoice at their losses, and courts and juries would probably waste little sympathy on them. Consequently the safest swindles operated today are those having race-track betting for their basis.

In the latter part of 1902 there were upwards of twenty-five of these schemes in operation in the United States. New York City was the headquarters for about ten, and the balance were located in St. Louis, Chicago, New Orleans, San Francisco, Cincinnati and Brooklyn.

Their prosperity was evidenced by the ability of managers to buy advertising space in the leading newspapers, to pay the printers for the most elaborate booklets, circulars, etc., and Uncle Sam for postage stamps, with which they were extremely liberal, usually sending a stamped envelope, for reply, to prospective investors.

Extracts which I give below from the literature of five of these concerns offer a fair criterion for the whole mass which I have before me, and demonstrate the turf swindlers' method of extracting money from the unsophisticated. Fully 25 per cent of their "investors" are women, while the whole number who contribute to their scheme is made up of persons who would not be seen betting at a race track or pool room, but who have consciences that will permit them to make money "honestly or otherwise."

HERE ARE PLAUSIBLE ARGUMENTS.

This is one argument of a firm of so-called "Expert Handicappers" of New York City, who bet on the races:

"There has never been a week since we started in business
when we did not pay a dividend. The smallest dividend we
have ever paid for any one week was $6.50 for every $100
invested. We average about $9.50 per week on each $100."

"An investment with us is safer and brings better returns
than bookmaking or any other form of speculation."

Here is an argument of a firm of so-called "Turf Commissioners" of San Francisco, which claimed to be betting on the races, guaranteeing 4 per cent weekly:

"There is no kind of speculation that affords so great an
opportunity for making money rapidly on a small capital as
playing the races on a business-like and systematic basis.
Our average weekly profits usually range from 4 to 8 per
cent."

Another argument, that of a so-called "Bookmaker" of St. Louis, who guarantees 5 per cent weekly dividends to investors:

"We make books and allow the betting public to place the
money. The man who bets has one horse running for him--the
bookmaker has the rest. For this reason the odds are all in
favor of the bookmaker and if he understands his business
he is certain to make money."

Argument of a firm of so-called "Turf Commissioners" of Chicago, who claim to make books on the races:

"Our plan insures a steady income on a small capital, such
as no other company offers, and far eclipses any mining,
oil, or other stock investment."

Argument of so-called racing stable concern of St. Louis, guaranteeing 3 per cent per week to investors of $50 and upward:

"We have a large stable of race horses, which we run at all
tracks, winter and summer; we make books wherever racing
is conducted, and the proposition we manage pays so well
because we know how to run it to that end."

One of the variants of the old turf scheme is the venerable "Two-Horse Special," a fraud that is so old that its whiskers drag about its knees. Here is a sample of the two-horse literature:

"MY TWO-HORSE SPECIAL PLAN."
(Send this slip with remittance.)

NO ACCOUNT RECEIVED OF LESS THAN $50.

GEORGE F. STONE,
Turf Specialist.
Brooklyn, N. Y.

I hand you ---- Dollars to be used by you in speculating
for me, according to your TWO-HORSE WIRE plan of Turf
Speculation. You are to play one-fifth of the amount of
capital on each special, placing the money to win and also
for place. You are to mail for me your selections each
day, mailing the same NOT LATER than 1 P. M. You agree to
operate the account, MAKING NO CHARGE until winnings equal
capital invested. After that 20 per cent of all winnings
you are to deduct, and send me the balance by money order,
with statement, each week. I can close my account and
withdraw any balance due me on demand. My liability is
strictly limited to above amount.

THE POLICE, AROUSED BY TURF SWINDLERS, RAID AND CLOSE UP THEIR PLACES.

Detective Wooldridge led the officers on February 23, 1900, when the following concerns were raided and closed up:

Co-Operative Trust Company, 80 and 84 Adam street.

Turf Investment Company, 84 Adams street.

Inter-Ocean Commission Company, 66 Wabash avenue.

Security Savings Company, Madison street and Fifth avenue.

Investors' Protective Association, 510 Realty Building.