Promoters’ Methods.—Do you know the signs of fraud? They are exposed in the method used in securing money from the community. The plan is about as follows: A selling scheme is perfected. It is constructed in a way that leaves no flaws, apparently. Each agent learns the scheme; he becomes skilled in applying it to the different types of individuals. Too often it is of little concern whether the project has merit or not. The chief object is to get money. Extravagant claims are made in which returns of 100 per cent. or more a year are said to be a sure thing. The influence of nationality, church, and fraternal orders are brought to bear in securing sales. The support of persons with good standing in the community is secured. Those who assist the promoter are given a reduction for their influence. The dope is given them often and systematically. So they soon realize the greatness of the project. This is promotion psychology. The land is offered at high enough price to permit reduction for quick sale, which bait works in many cases. Persons filled with greed for money are easy victims. The above kind of thing, though less common than formerly, is practiced in most States, and the wonder of it is that it can continue and why it is permitted to continue. It is fraudulent and should be stopped entirely if we are to conserve the interests of good people.
Effects of Land Fraud on Local Business.—Many families lose enough through fraudulent entanglements to give a college education to the son, a piano to the girls, and general improvements for the home or farmstead. The drain is away from home and school. Perhaps the greatest loss is the people who are lured to places where in many cases they are less well off than in the old home. Persons who lose in bad deals become suspicious of real business done by reliable men in the community. They refuse to invest in local developments in which the returns are sure, though smaller than those promised by promoters. Many are put out of business entirely by land frauds.
Do you agree with me in that it is not good business to farm the land, cash in its fertility and then scatter the proceeds among grafters? Let us quit chasing the ends of the rainbow, and turn our attention more towards the right use of the fruits of our labor in education and home building. (Applause.)
Regulation.—There are many laws for the conservation of business. The Federal Government prosecutes persons who make fraudulent use of the mails. There is opportunity under the law to recover on account of misrepresentation; but these laws are not sufficient. Public sentiment is now ripe for the enactment of special laws to conserve business against land frauds. Nebraska has made a special study of the subject, reduced fraudulent procedure by the force of publicity and public opinion, and will pass special conservation laws in its next Legislature. Kansas has gained distinction by the enactment of the well-known “Blue Sky Law.” This is good so far as it goes. It provides for registration, reports, supervision and penalties. Many States, as, for example, Wisconsin, Wyoming, and Texas, are to undertake legislation of this kind at the next sessions of their Legislatures.
Provision should be made in the special act against land frauds for field examination and report upon properties offered for sale. This field work might be done by the State Soil Survey, or the State Conservation Commission.
An essential feature of the act will be the registration of realty agents and the furnishing of proof that they are competent and reliable. This will reduce the number of land agents and insure the responsibility of those permitted to do business. The Western realty men are now framing a law of this kind to meet the needs of the various States.
Apparently there is no opposition to the proposed legislation for it is to conserve business and eliminate fraud. It is sure to receive the support of all unless we except those who make gain through doubtful promotion. If opposition appears before the various Legislatures it will have the embarrassing position of being on the side of fraud.
Summary.—Let me close this report with the following statements:
1. This discussion, though favorable to reliable land agents is against doubtful promoters.
2. Realty agents should have a practical knowledge of land classification, soil types and the land business.