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the way Congress really works. It is more interesting now than ever because of the new players in the game.

In early numbers of the WORLD'S WORK Miss Sarah Comstock will write true portraits of women of real achievement — not stories of women whose achievements are notable only because they are the deeds of women, but because of their inherent and fundamental significance.

Mr. C. M. Keys, who writes in the next number "Canada's Cure for Strikes," was a classmate of Mr. Mackenzie King, the author of the Canadian Arbitration Act, when he first achieved prominence, curiously enough, by leading a student strike.

SMALL INVESTORS' MONEY FOR HOME BUILDING

E

VERY year, as the building season comes around, the WORLD'S WORK hears from people all over the country who are trying to save money to invest in homes of their own.

"But it will take such a long time to accumulate enough in the regular way," complain most of these folks. "Isn't there some way to build and pay back?"

A question like that was asked three or four years ago by a man who recently wrote again to this magazine about another kind of investment, and incidentally told how he had followed the advice that had been given on the former occasion, and how pleased he was with the outcome.

It is timely to refer to his case, because it is typical. He was a salaried worker, living in a small town in New Jersey. He explained that he had managed to save enough out of his monthly earnings to pay on the instalment plan for a good building lot. But, even with a start as good as that, he had begun to despair of realizing his ambition, until he heard of a certain building and loan association in a neighboring town, and learned how it had for years been assisting people just like himself to earn their homes for good and all. In

due course he "took out" ten shares of that association's stock; and a little more than a year ago he moved into a fine new house, built with the aid of $2,000 that the association had lent him.

Without going into the mathematics of this investor's experience, a few of its phases may be explained briefly, to show how such associations work. Every share of this particular association's stock represented an ultimate value of two hundred dollars, and called for monthly payments of one dollar in dues, to be continued regularly by the holder, or subscriber, until the total of the sums paid in, increased by the pro rata distribution of the association's profits, amounted to the fixed value of the stock.

Ten shares, then, gave the holder an ultimate claim against the association amounting to two thousand dollars. Against this he had the right to borrow, upon presentation of satisfactory real estate security. The procedure was for him to apply for his loan in accordance with certain rules laid down in the association's by-laws, to be awarded his money by entering into an agreement to pay a "premium" of one dollar a month, or ten cents a share, besides his dues, with an interest charge of 6 per cent. a year. He

was then ready to sign the contract with is in four states his builders.

Meanwhile, it was necessary for him to pledge to the association the shares which represented his future savings and, in addition, to give a first mortgage on his property. Upon becoming a borrowing member he had to pay into the treasury, in addition to the regular dues on the shares, the premium and the interest on the loan, all amounting to twenty-one dollars a month. In from ten to twelve years after the first payment at this rate he will have paid off the mortgage, principal and interest.

This illustration is of the working of one of the many plans used by the true, or "local," building and loan associations -the kind that stand for savings and for homes through coöperation. Of these there are more than six thousand in the United States. Most of that number are strictly mutual: that is, they extend only to members the right of management and the privileges of borrowing money and sharing profits. They are called "local," "neighborhood," or "homestead" associations, or sometimes, as in Massachusetts, "coöperative banks," because they lend money only on property whose value can be determined easily through personal inspection by their own competent officers, and, obviously, only to people whose responsibility is known, in a general way at least, to all whose interests are at stake.

Such associations have to be distinguished sharply from the so-called “national" associations, and other types of loan companies, organized, not like the locals, as semi-philanthropic institutions, but as ordinary business corporations, conducted solely for the personal profit of small groups of stockholders and officers, lending money on "risks" in remote places, and not infrequently managed as purely speculative enterprises.

The pity is that the local building and loan association idea is not wider, geographically. The six thousand in the whole United States have nearly two and a half million members, who own coöperatively more than a billion dollars of assets. Yet one half of their total membership

is in four states - Pennsylvania, Ohio, Illinois, and New Jersey. There is room, even in the states where they are now most numerous, for more institutions of the kind. An extension of their usefulness was recently urged officially by Mr. George C. Van Tuyl, Superintendent of Banks of New York state, in which are 229 local associations with a membership of 140,000. In his report to the legislature on the 15th of March, the Superintendent said:

"There is probably no considerable village in the state in which a properly conducted savings and loan association could not be organized to advantage, and it is quite possible that their development in the rural districts of the state would satisfy existing demands for coöperative lending institutions. They certainly encourage thrift and home-owning, and enable the honest and the frugal to obtain loans whenever adequate security can be furnished, either by the individual borrower, himself, or through the coöperation of other members."

But the usefulness of these societies is not all on the side of the borrower. Indeed, if they did not afford to the man who can save only by fives and tens a safe means of investing for income, they would fail in their purpose of promoting the ownership of homes. Reports of the associations of two typical states show that for every borrowing member last year there were four who were merely investors.

In scarcely any other way can an investor of limited financial experience keep his savings so closely under his own eye. Jones may not want to build, but he does not hesitate to entrust his monthly surplus to his local society, because he knows it will be wisely employed in making up a loan to some fellow citizen whose house, which he may watch grow from its foundations, will be mortgaged to protect him; and because he believes his neighbors, Smith, Brown, and all the rest, wiii keep up their payments of dues, premium, and interest to the last extremity to protect their properties from foreclosure.

Perhaps Jones may have studied the reports of Mr. C. S. Cellarius, Secretary of the National League of Local Building

and Loan Associations, which show that these are among the most economically managed financial institutions in the world and that, even in localities where the lending rates are comparatively low, they have, as a rule, no difficulty in declaring dividends of at least 5 per cent. He probably knows that, if he wishes to withdraw his savings before his shares have obtained their full value, he may do so by giving reasonable notice and by agreeing, perhaps, to accept a slightly smaller division of profits than he would otherwise be entitled to.

It should not be imagined, however, that the building and loan society can assure investors of "absolute safety." There have been not only mistakes, but

abuses, of management, serving to bring home to investing members the stern fact that they are not depositors entitled to interest, as they sometimes erroneously believe, but stockholders, every one entitled to his proportion of the profits, but also liable for his proportion of the losses.

But, after all, the record of these local societies is remarkably clean. Next to the carefully regulated savings banks, probably no other kind of institution is more fit to cater to the needs of the small investor. It would be a wholesome thing to see them commanding a larger part of the small savings of the Nation, to the exclusion of some of the more modern instalment investment schemes of doubtful suitability for the financial novice.

THE NEW CHIEF OF THE SECRET

SERVICE

MR. WILLIAM J. FLYNN AND HIS ADVENTURES TO ENFORCE THE LAW AGAINST
COUNTERFEITING HIS SEVEN-YEAR CHASE TO CAPTURE
MORELLO, TWO LEADERS OF THE AMERICAN 'BLACK HAND"

S

BY

66

FRANK MARSHALL WHITE

TANDING just inside the door of one of the Federal Court rooms in the New York Post Office building one afternoon in the summer of 1903, Mr. William J. Flynn, now head of the United States Secret Service, and an Assistant United States District Attorney watched two of the worst Italian criminals stroll jauntily to liberty. One of the criminals was small and dapper, the other powerfully built and of medium height, his right arm crippled and the hand thrust into the edge of his coat.

"These pigs of the American police are not of the calibre to deal with you and me," remarked the Italian with the maimed arm in an undertone that reached Mr. Flynn, as it was intended to do.

"A new broom sweeps clean — nit," observed his companion.

LUPO AND

Mr. Flynn had just been made chief of the Eastern division of the Service.

"This new broom will sweep you both into a long term prison before it's worn out," said the big man to himself.

The dapper little Italian was Vincenzo Lupo; the man with the crippled arm Giuseppe Morello, both ex-convicts from Sicily. Mr. Flynn's first important task as head of the division had been to arrest Morello and Lupo, with several of their gang, for counterfeiting. But the two principal rogues had been mere spectators at the trial and conviction of their subordinates, for the Secret Service agents had been unable to connect them with the counterfeiting enterprise. Hence Morello's complacent reflection that the American "police pigs" were not competent to cope with him and Lupo.

Morello and Lupo are now serving 25

and 30-year terms respectively in the Federal prison at Atlanta, Ga. Mr. Mr. Flynn put them there, and that is one of the reasons why he is the Chief of the Secret Service now.

To understand the situation it should be borne in mind that the Italian crime problem in New York and the rest of the United States came into existence with the great wave of Italian immigration, beginning approximately with the first year of the century, that has since brought into the country thousands of ex-convicts of the Mafia and the Camorra among more than 2,000,000 of their honest and industrious compatriots. Morello and Lupo were established here before this influx began, and were proficient in what are now known as Black Hand crimes before that term began to be applied to these offenses. Morello, indeed, had been known to the New York police for several years before he went into partnership with Lupo. The maimed Sicilian had been arrested for murder, kidnapping, extortion, and blackmail at least half a score of times before his transactions in counterfeit money brought him within the view of the Federal Secret Service, but, though morally certain of his guilt in every instance, the police had never been able to fasten a crime upon him.

Morello was a fugitive from justice from Italy under a ten-year sentence for forgery. He was about forty years of age when he came to this country, rough in appearance and uncouth in manner, but an intelligent and forceful rogue. The police have never found out how his right arm had been crippled. Incapacitated for manual participation in crime, his brain conceived the schemes that his lieutenants brought to fruition. Lupo, about ten years younger, complemented Morello. He was urbane and affable, a polished villain who wore rings on both hands, used pomade on his hair, and gave off the odors of an East Side perfumery shop. He was clever enough to establish a wholesale grocery in New York and fail fraudulently for $100,000 incidentally to his transactions with Morello.

In 1899, Morello's existence was officially brought to the attention of the Secret

Service of which Mr. Flynn was then a subordinate member. During the latter part of the year a flood of counterfeit money was put into circulation among the humble shop-keepers of the poorer parts of the city, many of them recently arrived Italians who were unfamiliar with our currency. currency. The men who passed these counterfeits were all Italians, who generally plied their trade about dusk, making small purchases in shops that were unlighted for economical reasons, tendering spurious two-dollar treasury notes in payment, and receiving change in good money.

Mr. Flynn, with some of his co-workers in the Secret Service, was put on the case. The trail led to what is known to the police as "Little Sicily," and into the home of Morello, and he and several of the men who had been passing the spurious bills were taken into custody. As on all the other occasions that Morello had been arrested with members of his gang, they suffered and he escaped. No pressure that the prosecuting officers could put upon the underlings would induce them to incriminate him, even though immunity from punishment was offered those of them who would turn State's evidence. There was nothing left to do, therefore, but to set Morello at liberty again.

Three years later, when Mr. Flynn had been made chief of the Eastern division of the Service, a deluge of counterfeit five-dollar bills swamped the Italian settlements of New York City. They were known as the "Morristown fives," because they were imitations of an issue of the National Iron Bank of Morristown, N. J. Mr. Flynn, who took charge of an investigation, traced them back, the trail leading into Little Sicily again. Pursuing his researches under cover, in an effort to find the counterfeiting plant, he discovered that Giuseppe De Primo, a grocer in Little Sicily and a friend of Morello and Lupo - who had just begun criminal operations together — was importing a larger amount of olive oil than his business seemed to call for. The clue now led to the Custom House. Under the tariff law olive oil may come into the United States by barrel at a lesser rate than in cans; it is

therefore imported in bulk, the cans being brought in from Italy empty to be filled for sale in this country.

Investigation of the cans consigned to De Primo revealed rolls of the "Morristown fives." The counterfeiting plant was in Naples, and Morello and Lupo were circulating the product that was sent to America through De Primo. Morello, Lupo, and De Primo, with a dozen other Italians who had actually passed the counterfeit money, were arrested and again there was no evidence to be found against Morello-or Lupo, either. De Primo was found guilty of taking part in the conspiracy to defraud, but he refused to implicate Morello or Lupo, even to save himself. The others were equally loyal. Morello and his partner in crime went free and the others went to prison.

The escape of Morello and Lupo from punishment in the "Morristown fives" case was the occasion for the sarcasm of the two criminals that was leveled at Mr. Flynn at the courtroom door, and for the fixing of the detective's determination never to relax his energies in their pursuit until he had landed them behind prison bars. From that time until their final arrest in January, 1910, they were continually under the surveillance of Secret Service agents, except for brief periods during which their whereabouts were generally known.

Nevertheless, for month after month and year after year, Black Hand crimes - as they were beginning to be called small and great, were traced almost to Morello and Lupo. Their operations extended as far west as Chicago and as far south as New Orleans; but, although scores of their associates and dupes were convicted and sentenced to long terms in prison and even to the electric chair, the "men higher up" could not be reached. Neither Morello nor Lupo knew that Mr. Flynn was keeping track of their movements during the long period that they let counterfeit money alone, and for years they directed criminal operations under the eyes of the local and Federal police agents. To be sure, they were arrested frequently; but, believing themselves to be secure from conviction, they took such

trifling disturbances philosophically. as part of the day's work.

"What is a journey more or less to the courts?" Morello once said to a member of the Italian squad of the detective bureau who had him in custody. "It is a relief from monotony. It might even be amusing if the American pigs of lawyers and judges had a little wit to put me on my mettle. But, no! I sleep while they dispose of my case."

For more than five years, in addition to other important work of the Secret Service, watch was kept on Morello and Lupo before Mr. Flynn found it practicable to begin the construction of the trap into which they finally fell. Mr. Flynn was confident that it was merely a question of time before the bandits and their followers would again turn their attention to counterfeiting.

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Meanwhile Mr. Flynn's reputation as a detective was constantly increasing. In January of the year before the issue of the 'Morristown fives," he had been called to a bank in Grand Street in New York, the cashier of which had telephoned him that he was holding a suspicious looking man who had offered eighty five-pound Bank of England notes for exchange. Mr. Flynn had approached the bank slowly and cautiously, with the idea that if the man with the English money was a professional criminal he would doubtless have a confederate waiting outside to ascertain whether fortune or misfortune befell him. The detective's forethought had been rewarded by the sight of a little man with a red beard on the opposite side of the street gazing fixedly at the door of the bank. The sentinel had disappeared on seeing Mr. Flynn looking in his direction, and the detective had arrested the man in the bank who had asked for exchange for the eighty notes, and who had declared that he had found them in a wallet in the street. Mr. Flynn had been unable to find the redbearded little man, but he had made a mental photograph of him. The fivepound notes were as perfect counterfeits as the officers of the Bank of England had ever seen, the celebrated watermark having been copied almost exactly.

In the fall of the same year, when John

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