Business & Finance: Pen Chain

A lot of people bought fountain pens they did not really need last week because it put them in line for some fancy profits. It was chain-selling, back on a grand scale.

Sponsor of the movement is Prosperity Sales Plan Corp. of Manhattan. You buy one of their pens through a friend for $3 and become a salesman. Every pen you sell after your third nets you a $1.50 commission, paid direct by the company upon receipt of your customer’s cash and order blank. In addition, the first three pens sold by every purchaser after your own third net you the same commission and so with the first three pens sold by each of their first three customers, and so on. Your profits increase in geometric progression. Your fourth customer sells three pens and the three buyers sell three each and their nine customers sell three each and you have $60—commissions on 40 pens. The company warns you it will pay nobody commissions of more than $50,000.

Prosperity Sales Plan makes money to begin with on each pen for which it receives $1.50. In addition its sponsors probably started the ball rolling by selling hundreds of pens to people who wanted to be in on the ground floor, with the provision that the first-three regulation apply even to these original buyers. Profits to outsiders have begun only where salesmen expanded the chain by selling more than three pens. Thus the bulk of profits has accrued to the sponsors. The pen you buy may be 30 times removed from the first one sold but the chances are that it represents one of the first three of the first three all the way down the line and the $1.50 commission goes to the men who started the chain.

A similar chain in $1 wallets was also underway last week.