The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1895-08-02
EXCHANGES AND BUCKET SHOPS.


Once more the officers Of the Chicago
Board of Trade have resolved to make
an effort TO break up the bucket-shops.
To the average man there is little diff
ference between buying wind wheat,
CORR and cotton in the regular exchanges
by agents who belong to the Board OF
Trade and shout in the pits, and the
bucket-shop. in which man can risk
FIVE dollars and usually lose it, That
thousands of men have been ruined by
trading through the one or the other is
well known. Most of the entertainments
OF bank and other clerks to whom are
intrusted the care of others money car
be traced to one or both of these specu-
lative institutions. Probably because
people do not recognize the difference,
the exchanges under the direction of
boards of trade are often charged with
sins which belong to the bucket shop.
That the uniformed may have a clear
idea OF the difference between a legiti-
mate broker or commission merchant
ana the keeper of a bucket shop. Secre-
tary Stone, of the Chicago Board OF
Trade. has given an explanation, which
is as follows:
Actual trading in grain has a basis in
a s,c stocks Of grain stored in elevators
approved by, or, in the language of the
rules made regular" under the rules of
TINS TINS, board. Receipts for grain issued by
sucn elevators are amply protected by
ponds given to the State and to this board,
ana aln,d oy ali the safeguards contained in the
rules ana regulations of this body. to such
q and hov, lyap sa
ceive them and recognize them as ample
and substantial collateral, and as there
fore unquestionable evidence of grain, and
grain which they represent. No such basis,
ana indeed no basis at all attaches to
buckle 6u.ckest-shops. Moreover; all orders re-
ecuted actually and in practical and bona
nde manner by actual sales or actual pur-
c eh oy responsible parties. he'd under
the rules or this board to q strict ac-
countability. Bucket-shop concerns as
sumo, OF course. SO far as their financial
in accounts which they render to their
customers. No commercial transactions
are connected with these institutions, and
tense and not upon reality. Small margins
are called for from their customers. and
these are quickly absorbed under any con-
asion Of the general markets and trades
materially TO the profits of the bucket-shops
and greatly increases the probability of
customers.
whole thing in all its bearings and in all
its operations and conduct is so arranged
that by far the greater number who deal
with these piratical concerns lose money.
and lose IL quickly.
The explanation, however. seems to
made by brokers who are members of
the Board of Trade in Chicago in which
1t Is not the intention of the purchaser
to buy real wheat and the purpose of
the seller to sell the real article. This
is not the case, since a small part of the
sales made are bona fide sales of wheat
or corn with any expectation of delivery.
Probably 10 per cent. of the purchasers
in any full day of the exchange really
desire wheat. They offer a price for it,
If 1T sells on a certain day below that
price. the purchasers must pay the mar
gin between the price offered and the
selling price If it is lower, and will re-
ceive such margin if the price is high
er. In the case of the broker of the
Board of Trade he buys of some person
to fill orders for commission. In the
case of the bucket-shop the trade is
between the owner and the customer.
If the customer wins. the bucket-shop
owner loses. Under these conditions
the bucket-shop keeper is very sure to
have a system which gives him the ad-
vantage over his customer. If there
were not such a scheme there would be
no object in keeping a bucket-shop any
more than lottery in which premiums
are much more than the aggregate of
money paid out for tickets. The bucket
shop Is surer means Of losing few
dollars than is the purchase of wind"
wheat upon margins, because the man.
ager can ordinarily close the deal when
the margin has been eaten up. A large
number of people will testify that both
are good things for the average person
to let alone.