The Providence news. (Providence [R.I.]) 1891-1906, 1900-08-01
Solicit Business From unwag and
Then Proceed 10 Rob Them.
ORGANIZED GRAIN FLEEcING GANGS.
Their Existence Dates Way Back 10 the Be-
ginning Of Popular Interest In Spscu-
Iatlng Possibilities Of Stocks

New York, Aug. 1.-The existence In
Wall street Of organized gangs who
fleece the public and flourish dates back
to the beginning OF popular interest In
speculative possibilities OF stocks and
grain.
For many years these swindlers oper-
ated boldly, with schemes so fragrant that
none but the very guileless were taken in.
but the evolution OF the Wall street fakir
has brought into the scene a class of men
INSCRIPTIONS and deeply wise.
Their schemes are laid under cover OF
respectable pames. and how cleverly
their games are manipulated may be
judged from the fact that even when
suspected by the management of the
Exchange where they execute frauds
conviction well nigh impossible, ut
terly impossible, in fact. except where
chancs slip allows evidence to leak.
EXCHANGE IS AFTER THEM.
The present administration of the Con-
solidated Exchange, which is the centre
of popular speculation, has begun a cru
sade against what are known as "discre-
tionary men," wno are regularly organ
lied gangs OF fiye and six to swindle
the public.
Iney DO tno pulk OF tnelr Dusiness py
mail. and are known in the Street as
mail fakirs." Their operations extend
from coast to coast, and fortunes have
been stolen In this way with comparative
immunity from punishment
Any honest broker will tell you that a
mail business cannot be legitimate ano
pay. The methods of discretionary men
are not easily understood TO those not
familiar with the intricacies of stock
market speculation.
To begin with. IL requires collusion be-
tween a broker In good standing on she
Exchange and the mail fakir." who is
called an outsider"
This outsider sends broadcast circular
letters, representing % his intended VIC
Tins that no has superior stock market
information. and will undertake TO act
managing broker for a clients ac-
count, and collect commission on PROFITS.
He. the outsider, does not want clients
TO deposit accounts with him; he merely
suggests the name of some four or five
Exchange members, with any ono OF
whom the client may open account, sub
ject to the direction OF the outsider. This
looks straight enough TO the client, and
he opens an account
Now, IL must be remembered that the
outsider and me broker with whon
client has deposited his money are I'm
colusion. Ley walt for what is known
as wide market-that is, when huctua-
tions are more or less violent.
Then the broker buys, for example,
twenty shares of Sugar at 120, and imme-
dately sells IL at 120, or as near the same
price as possible, the round transaction
consuming less than minute
HOW THE SCHEME is WORKED.
On the first favorable opportunity the
broker repeats this transaction at say
125, buying and selling twenty more
shares points from the price OF the
first deal.
This has all been done at the direction
of the outsider. and to this point Il looks
straight enough But when the outsider
and the broker get together TO make re-
turns TO their out of town customers
they do this
The four halves OF the two round
transactions are transposed. so that the
sale of the first deal at 120 is played
against the purchase in the second deal
at l25.
The returns are made 10 two clients.
thus: Bought twenty Sugar at 125: sold
twenty sugar at 120" The clients lose
They may protest to the Exchange off,
cials.
The balance sheet is produced, and there
the trade appears as having been regu-
larry made. just as represented to clients
who have no redress. for the reason that
they signed contracts with the outsider,
giving him full authority to manage ac-
counts.
Since the oficials OF the Consolidated
Exchange announced their intention, sev-
eral weeks ago, 10 suppress this discre-
tonary thievery, complaints have poured
I'm from all parts OF the country, from ok
lahoma. Alaska, the Pacific coast, and
all parts OF the south
THE FRAUD A GIANT ONE.
The tremendous scope Of the fraud IL