Crawford avalanche. (Grayling, Mich.) 1879-19??, 1897-04-01
LEGISLATION and associated

Y LEGISLATION and associated
business effort are making consid-
- cradle progress Of late in the mat
ter of fighting the evil long known as
,"the bucket shops" Within single
week Southern State Senate has de-
clared war on the cotton gambling ex-
changes of this character, and a West
lern Legislature has brought up a bill
ito abolish those purporting to deal In
grain, mining stocks. and the like. Orig
dnally, these institutions were devised
to meet the requirements Of speculat-
ors who wished to operate on fractional
lots of stock and objected to paying the
difference in prices charged at legiti-
mate exchanges. With an abuse of
system inherently vicious, however,
these places have so far deteriorated
that police raids have become frequent,
aud the principal features of attraction
have been those present in any pool
room where betting is done on some
event or calculation. 1t has become a
saying, resulting from bitter expert
ence. that the only way TO beat buck
ct shop" nowadays is to stay away
from ii.
The countryman Is a type of Gus
TONER who not only haunts the bucket
shops once he gets into their clutches,
Ibut who Is reached in manifold ways
Through letters and advertisements. He
often goes on the theory that because
mo wheat or hogs were raised in his
township there are none in the world.
This man has been buying on falling
market for years, and has nothing to
show for 1t but experience. The glow
ing tables of profit calculations dazzle
the unwary at distance. and fortunes
are accumulated by clever sharpers
who lead their victims on, reporting a
profit very rarely. but great prospects
always. Only the other day a man in
Iowa. who had been dealing with
bucket shop firm for many months,
was made aware, by misdirected let
ter from the firm, of the fact that he
was being hoodwinked and cheated reg
ularly, the letter showing that there
was neither system nor honesty to al
legged dealings in stocks. These fas-
cinating schemes are depicted in glow
ms NViVio,uhu may dDOul Weli
throw his money away as invest in
them.
More than 200 bucket shops have
been known to be in operation in Chi
cago at one time. some run upon plan
where expenses were tremendously
heavy, others on the mere cost OF tele-
graph ticker, some printed slips, a
blackboard and a pot Of chalk. They
are usually located off corner or alley,
and as closely as possible within the
shadow of the headquarters of the
Board Of Trade. Two blackboards are
affixed to the wall. One chronicles the
fluctuations Of gas, tobacco, gold, sill
yer and railroad stocks, the other deals
with local quotations on grain. One
ticker purports to beat out what Wall
street is doing; the tape of the other, it
is claimed. furnishes the same infor-
nation as to city grain deals that
privileged member Of the real Board
pays $500 to read. A boy who has
learned to decipher the tape chalks up
these quotations, and the game is open.
The victims are always prompt. They
are on hand for the first tick of the
ticker, and the comfortable room, easy
chairs and congenlal company draw a
crowd thoroughly mixed, many Of
whom imagine they are really doing
business.
The method Of operation is very sim
pie. Almost any margin will be ac-
cepted, and the smaller the margin the
greater the risk. An investor, believing
that he understands the market, in
vests, say, $40. The bucket shop at
once takes one-eighth of 1 per cent.
out Of this as fee. If the margin
Is 1 per cent, the customer loses his
money when the market goes against
him three-quarters of 1 per cent. On
the other hand, a change of ~ per
cent in his favor Is necessary for him
to make 1 per cent. profit. The odds
are always against the customer and
In favor Of the operator. 1t is estimated
that at the present time there are be-
tween 5000 and 1000 bucket shops in
the country, and numerous towns of
5000 inhabitants boast one or more of
these institutions. Those that are OPP
Grated on a large scale have large ex
penses In addition to suitable Offices,
they have an endless number Of private
wires, and spend large sums of money
I'm sensational advertising. Brokers
who really execute orders cannot COM
pete against such prodigal methods.
According to the bucket-shop adver-
tisements, any one can make money at
specializing. Having received the
L. a. \
public have been let in. the various
branches report to headquarters, and
the latter finds. for instance, that he Is
10000 shares long on a certain stock on
2 per cent. margin. The next move is
to sell the stock down per cent. on the
floor of the stock exchange, and pocket
the $4,000 margins. Under the bucket
shop system these transactions are not
made in the market; they are simply
so many bets. with substantial odds
against the public, who place their
money at the mercy Of bucket-shop pro-
prietors.
"Bring In your money; Wen show
you how to run 1t up-you keep watch
ing the blackboard for amusement" is
the way the glib city bucket-shop pro-
prietor puts 1t. Then he tells you to
pyramid" This is a modern term, ex-
pressing the idea OF building up an
enormous fortune from small begin
nings. They represent that with $50
you buy 5000 bushels of grain on l.
cent margin. When the market ad-
.vances ~ cents, showing a net profit
OF $50 buy 5000 bushels more. An ad-