Evening star. [volume] (Washington, D.C.) 1854-1972, 1895-11-23
TESTING THE MATTER
The Stock Broking Case Comes Up for
, -I-s p .,.. .ir. Trial.
The Methods of Operation Pursued by
the HOdgen Company-Lawyers
D.. Begin Arguments.

AS stated in The Star indictments were
reported Thursday last by the grand jury
against Samuel C. Head, jr, and Daniel
| Ferry, charging them with setting up a
gaming table. Messrs. Head and Ferry,
| who had assisted in having the indictments
| returned in order to settle whether or not
they have the right to transact their bust
| ness. Immediately went into court and
gave bond for their appearance.
| As stated, the trial commenced today.
District Attorney Birney prosecuting and
| Mr. Charles c. Tucker and Mr.. Henry E.
Davis appearing for Mr.. Ferry, it being
decided to place but one of the indicted
| men On trial.
Mr.. Birney opened by explaining to the
| jury the difference between bucket shops
| and legitimate stock offices, declaring that
| the former are conducted In violation of law
| in that they do gambling business pure and
| simple. He explained that the case would
| be one almost solely of law and not of fact.
For the defendant Mr.. Tucker stated that
Messrs. Ferry and Heald are managers for
the Hodgen Commission Company, and they
had sought the trial to determine whether
or not their business is legitimate. Mr..
Tucker went on to say that the indictments
were returned under an act of Congress ap-
proved in 1888. That was twelve years ago,
and, declared the attorney, the present case
Is the first prosecution under the law. and
the defendants were of the opinion that it
is high time for the community and them
selves to know whether or not the business
| is legitimate. Mr.. Tucker then explained
that the term bucket shop was derived
| from the remark of an exchange member
some years ago to the effect that the bust
ness transacted by the small brokers was
merely drop in the bucket, and thereafter
the small establishments were referred to as
bucket shops" Mr.. Tucker also described
| at length the manner in which the business
| is conducted by the local brokers.
The business.
Mr.. Birney first called John q. Mckeever,
employed by the Hodgen Company at their
office, Cos 7th street northwest, to receive
quotations on the Morse instrument from
the New York stock exchange. Mr.. Nc
keever described in detail the way the bus
| mess is conducted. and during his examina-
ton stated that 80 per cent Of the deals are
on margin. HIS company will not and has
| ever allowed gambling. declared the wit
ness, and the business Is carried on in pre-
cisely the same way as is that of the large
| brokers and stock exchanges. Mr.. Nc
keever, in answer to an inquiry as to where
he secured his knowledge of the business
of the large brokers, explained that he has
been in the employ of several of the large
houses and exchanges of New York and
Philadelphia.
| Mr.. Birney then read a statement, signed
| by Messrs. Head and Ferry. 1t set forth
that the Hodgen Company is a corporation
| under the laws OF Maryland. and has a
| paid-up capital of $4,000, AMI available
| cash assets of $lJO,OO0. Its principal Offices
are in Philadelphia, the Washington offices
| being connected by direct wire leased from
| the" Western Union Telegraph Company
with the main office in Philadelphia, which
| in turn mas a direct wire to New York.
and stock ''tickers. Quotations are re-
| ceiyed. it was stated. from the stock ex-
| changes in New York. Chicago and Phla-
| delph.a-z The, business of the company is
| CT two-fold nature, 1t was explained.
Stock, grain and provisions are purchased
| for cash for customers, and a charge OF
| commission, of one-eighth of one per cent
of the value of the stock bought or sold
| made. When an order is received TO pur-
| chase or sell produce or stock, the order is
| wired to the Philadelphia office. and the
same is purchased. If possible in the Phifa-
delphia exchange, or if not there procura-
BILE is bought in the New York exchange.
| The certificates of stock or warehouse re-
| ceipts are delivered to the customer in
| Washington as soon as received. They are
| deliverable. by contract within three days
| from the date of the orders The company
| also deals in grain. provisions and stock on
| margin so-called. The order for such is
| signed by the customer
| Margin Work.
When orders to purchase or sell on mar
| gin are rec eited, it was further set forth
| they are not ordinarily wired to Phladel-
| phia or New York, unless the customer eX-
| erc!ses the right reserved to him Under the
| contract to purchase the stock outrigh,
| before his margin is exhausted Orders are
| received to buy or sell on one. five. ten
point or greater margin. At any time after
| the purchase of the stock on margin the
| customer is entitled to call for and receive
| the stock. grain or provisions bought upon
| payment of the market price thereof. less
the amount he has paid to the company as
| margin and commission.
| The company has been In business in
| Washington about six years, SO its man.
| ayers declared An their statement, and in no
| instance where the delivery of the article
purchased has been asked for has it failed
| to deliver the same. In numerous cases
| such calls have been made and they have
| been invariably met by the delivery of the
| stock within the three days mentioned in
hand certificates OF stock in various COM
panies. ready for delivery. if called for.
While in the majority OF instances Gus
| TONERS do not call for the delivery of the
| stock. the statement concludes. the COM
| pany is always ready. able and willing to
| deliver 1t IN accordance with the terms of
| its contract. Whatever the intent of the
| customer may be. its interest is to deliver
on call, and 1t regards it's contract as a
bona fide one and binding in every respect.
| In no instance since the company has been
| doing business in Washington, its mana
| gers contended, has 1t, it's officers or agents
!
| with any customer that any transact ton
| should not be regarded as an open and
| legitimate contract of purchase and sale.
| The Arguments.
At the conclusion of the reading Mr.. Tuck
err asked that the jury he Instructed to re-
| turn verdict of not guilty, and. as the SUBJ
| sequent proceedings were solely regarding
the law in the case, the jury was then ex-
cused until Monday, morning.
Arguments on the applicability CT the
law in the case at issue followed, Mr. Tuck
| er opening by quoting the laws covering
| gambling in force at the time of Charles
II and Queen Anne. The contention of the
| defendants was that their business is the
| legitimate selling of Stock and is in no sense
| gambling. andthat the decision of courts In
| other jurisdictions upon the same subject
| matter has supported the contention stated.
Mr.. Henry p. Davis also arSuetl on behalf
| of the defendants, and SIR. Laskey and Mr..
| Birney for the government.
| Upon the conclusion of the arguments
! upon the applicability of the law, Judge
Cox reserved his decision. and the case went
| over until next Monday morning
The Grand Prize Comes Here.