John W. Griggs on chain letters

This is the first case which I can actually find which involves a chain letter or a pyramid scheme, although I know the crime dates back much further than this, since the opinion includes the phrase "endless-chain letter" in quotes as if it were a well-known term! This opinion was written by Attorney General John W. Griggs in 1900. Griggs was born in New Jersey in 1849, and was a prominent Republican who eventually became governor of that state, resigning in 1898 to become President McKinley's Attorney General. He resigned from that post in 1901 to serve on the Permanent Court of Arbitration at the Hague, in the Netherlands, and spent his retirement at home in New Jersey before his death in 1927.

I have only reprinted excerpts from this opinion, although I have included the full text of the 'chain'.

23 Op.Atty.Gen. 260

Department of Justice

August 31, 1900

SIR:

I am in receipt of your note of March 31, 1900, asking, in substance, my official opinion whether certain cards containing printed matter similar to the one enclosed in your note can be legally received, transmitted and delivered through the mails, in view of Revised Statutes, section 3894, as amended by the act of September 19, 1890 (26. Stat. 465) and I have the honor, in reply, to transmit the following opinion.

Upon the cards in question there is printed the following:

"DEAR _______ : please enclose this card with 20 cents in silver or ten 2-cent stamps in a sealed envelope, and address and mail it to 'The Midland Publishing Company, publishers of The Coming Age, Copley square, Boston, Mass.', or for quicker answer to 'The Midland Publishing Company, western branch office, 306 Olive Street, St. Louis, Mo.'

They will send you by return mail, a copy of the Coming Age, together with a set of ten cards like this one, with full instructions, and a list with descriptions of fine cloth-bound books from which they will give you $10 worth free. On receipt of the cards, hand or mail them to ten of your friends, as I have done to you, and when they have sent in your cards, as you do mine, the publishers will send you the magazing one year free, and in this way you will get the magnificent magazine, The Coming Age, 132 pages, each month, and entire year, for only 20 cents. When the cards of your ten friends have been returned as requested, the publishers will then present you with $10 of magnificent cloth-bound books of your own selection, from their 1899 list of high-class books, which they will send you with your cards.

Instead of the books, if you prefer, you can have either a $12 family Bible, a $25 sewing machine, an $18 baby carriage, a folding bed, a suit of upholstered parlor furniture (3 pieces) a set (112 pieces) of decorated tableware, a combination bookcase and desk, an upholstered couch, a sideboard, a gramophone, an Elgin or Waltham watch (lady's or gentleman's), an imported double-barreled shotgun, or some other equally useful article, all shown in an illustrated catalogue, which will be sent to you with the ten cards.

If you can not do this, please return this card, for if it is lost or destroyed, it will break my chain. Kindly send it the day you get it, and you will do me a great personal favor.

Yours very truly,

Name: ______
Postoffice: ________
Date: ________, 1899
$2 a year, single copies 20 cents

[Ed. note: the Postmaster-General apparently mistook part of this chain for another sort of setup and incorrectly stated the structure of the chain. Griggs laid out what the P-G said and showed where he was wrong. Then:]

Revised Statutes section 3894, as amended by the act of September 19, 1890 (26 Stat. 465), provides that -

"No letter, postal card or circular containing any lottery, so-called gift concert, or other similar enterprise offering prizes dependent upon lot or chance, or concerning schemes devised for the purpose of obtaining money or property under false pretenses,... shall be received, transmitted or relivered through the mails."

The language of this and the section amended is peculiar in view of the evident purpose of Congress in this legislation. It speaks of "lottery, so-called gift concert, or other similar enterprise offering prizes dependent upon lot or chance." This necessarily means that lotteries and so-called gift concerts are similar in the sense which Congress used that term, though, in must respects, they are essentially different; for, it makes the "other enterprise" similar to both, which cannot be unless they are, in that sense, similar to each other. It would be very difficult to formulate a definition of those enterprises or schemes by which prizes are awarded dependent upon lot or chance and which are similar to lotteries and gift concerts and which would embrace these only; and, for the purposes of this opinion, it is not necessary to do so. It suffices to say that an enterprise or scheme by which a person pays for a chance to get something of much greater value, the getting, or failure to get which, depends upon lot or chance, is similar to a lottery, in the sense in which that word is used in this statute. It remains to determine whether the scheme developed in these cards is of that description. Is the giving of the company of what is offered, and its receipt, upon the other hand, dependent upon lot or chance?

It is quite safe to assume that the Midland Publishing Company embarks in this business as a business enterprise and not form philanthropic or charitable motives, and that it expects to receive from the business more than it will be compelled to pay out. How is this to be done? ... [Ed. note: another section skipped]

Whether any or all of these cards are thus returned, depends not at all upon any act, volition or control of the company, but upon matters entirely outside and over which it has no control. It would seem difficult to imagine a case where the payment of what is thus conditionally promised depended more upon chance that this.

So much for the company. How is it with those who receive the cards and return them with the money? Each of these is entitled to the magazine and $10 worth of books, dependent uon the chance that all the other nine also return their cards and money. Here, too, whether they do this or not, is quite beyond any act, volition or control of any one o them. Whether any particular one will do this depends on himself and not upon chance, forhe can determine it. But not so as to the others. Their actions may be affected by an infinity of considerations or accidents which he can neither forecast nor control; and it is much as if the same thing were promised upon the same consideration, if the recipient of the card should predict correctly what the weather willbe at a particular hour of the day in the distant future. One would depend about as much on chance as the other...

With some such meaning as this it is manifest that, as respects both the company issuing these cards and their recipients, whether the prizes or gifts offered shall be delivered or recived, depends entirely upon whether, in each set or series of ten cards, all are returned to the company with the money, and that this is depending upon chance within the meaning of the statute.

[Ed. Note: Yes, you read that right, it is not just the originators of a chain letter scheme that are committing a crime - everyone who participates in it is also committing a crime.]

But this is not all. The section makes unmailable the same kind of matter "concerning schemes devised for the purpose of obtaining money or property under false pretenses."

The scheme developed by these cards is one offering a $2 magazine and $10 worth of books to every one who will purchase for 20 cents ten cards, each of which is returned with 20 cents, making, at the outside, and as I construe the card, $2.20. Each o the same ten persons also receives a similar card offering him a similar $12 prize for the same sum, $2.20. And the cards are furnished for such distribution and are distributed for the ostensible purpose of inducing each recipient to return the card and money and get the prize: and each is told that if he and the other ten will do so he will get a $12 prize, for which the company will receive $2.20.

This is a fraud and a false rpetense upon its face. For it is apparent that if all, or even a considerable part, were to do as requested - that is, if the other parties to the contract perform their parts - the company can not and will not perform on its part. A promise which, if accepted and performed by the promisee according to its terms, is one that the promisor knows he can not, and will not, in that case, perform, and does not intend to, is a fraud and a false pretense. This case is of that character. For it is evidence that if the persons to whom the cards are sent, perform their part, as requested, the company can not and will not perform on its part, and never intended to perform in that contingency.

I have therefore to advise you that upon each of the grounds I have stated, the case you present comes within the prohibition of the statute referred to.

Respectfully,

John W. Griggs

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