Keep the Change

W. Geoffrey Haynes, a Philadelphia real-estate man and part-time chemical importer, thought he had a sure-fire way to raise money. In newspaper ads, he invited 1,000 people to send him $100 apiece. Haynes's offer: investors would get their money back, "unconditionally," in ten years, plus a share in the profits of his importing business. For every $100 sent in, Haynes planned to send back a $100 U.S. bond maturing in ten years. As the bond would cost Haynes only $75, he would have $25 left to use as he wanted.

Last week the Securities & Exchange Commission stepped in. It charged that Haynes was offering securities without registering with SEC, and stopped further solicitation unless he did register.

This was the first official slap at the ingenious new method of raising money which had bobbed up, via newspaper advertisement, in several U.S. cities. All of the schemes involved U.S. bonds and the same "money-back-in-ten-years" guarantee, plus the prospects of profits on the loan. But SEC's action in Philadelphia would not necessarily put a crimp in them. Two other money-raisers in New York got around SEC by filing details of their schemes (registering) with the agency. So long as they told all the facts, SEC could do nothing to stop them.

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