The St. Louis Republic., 1900-11-25
Increasing Number of Dishonest
Failures Has Aroused New
York Authorities.
WASH.SALE BROKERS WANTED.
Under the System in Vogue the
Dealer Is Said to Use Gus
toner's Money in Betting
That Speculator Loses.
REPUBLIC SPECIAL.

REPUBLIC SPECIAL
new York, Nov. A-Detectves are pre-
pairing to make rails in Wall street within
few days. The District Attorney has or
oered crusade against the bucketshops
and the brokers Of presumed Responsibility,
who make practice Of wash" sales and
who are deemed more dangerous TO the
community than the outlaws who Go not
pretend to have any dealings with the ex-
changes
ihis move is to be made as a result of
the many failures that followed the general
rise in stocks after election. As the nrofits
et their customers accumulated, brokers
began to go to the wall. In almost every
case there were large liabilities and the
assets amounted to very little. usually moth
ing beyond the problematical value of the
once hStures. Many small speculat ators have
been reduced to dest!tution by the loss OF
their capital.
Dishonest Assignments.
investigation has proved that large
proportion of the failures have been dis
honest. II the orders for purchasing stock;
were ever executed they were nothing more
than wash" transactions. purchases and
sa.es mace simultaneously and at the same
rate. merely for the purpose of record
These wash" deals are entered in the
BOOKS IN such manner that they apparent
iy show legislative holdings of stock, while,
IN reality. the broker has nothing. and
merely CANDLES that his customers will
lose. If they do. he makes everything; II
they win too much he canot pay, A rising
market means profits for the small oper-
ators. who are very rarely short.
one OF the leading bankers in this city
consulted member of the District Attor-
ney's staff to-day and made the astonishing
statement that IL prices had beer made to
go up for four weeks as they had for the
week after election, fully one-half of the
brokers' doing business on the Consolidated
Exchange would have had to suspend, and
wall street would have been lined with
wrecks.
Hopes to Head on Failures.
so serious is the condition deemed that
Captain McCiusky. Chief Of the Detective
Bureau. has been Instructed to make
thorough investigation. and to proceed
against all brokers against whom he can
obtain evidence Of irregularities. He says
he hopes to be able to make out cases
against several men before they have
chance to assign.
There are many firms In Wall street that
do a fraudulent business" said Captain Nc
Clusky. "They spring up like mushrooms.
and 1t seems almost impossible to close
them. for as soon as demand is made for
money they fail and go away. The men,
bers Of Hooper & Co. disappeared after
their recent failure. Lawrence failed when
demand was made for 5000. think, how
ever. that the arrest of Lawrence and his
associates will have the effect of soaring
similar firms in the street"
Chester B. Lawrence, Jr. Edward B. Un-
derhiH and George R. Wolbert. who were
arrested on Friday, after Lawrence had
made an assignment to Wolbert. his book
keeper. were arraigned in the Center Street
Police Court to-day. Magistrate Zeller in
creased their bail to 5000. Friends fur
nished the necessary bonds and the men
were released. The complainant in this casa
Is Mrs. Catherine Rouckendorff, who invest
ed $500 through Lawrence, for which no
accounting could be had.
Lawrence did a large business and main
tanned several Offices. The evidence goes to
show that he "bucketed" most OF the or
ders of his customers. winning their money
consistently until recently. when the con-
tinued advance In prices forced him to the
wall.