Virginia citizen. (Irvington, Va.) 1891-1921, 1904-06-10
WHAT is A BUCKET shopa
A brokerage once where Orders Are
Never Executed

/
| Never Executed.
President Pomroy's announcement on
assuming the presidency OF the New
York Stock Exchange recently that
the governors were determined to
maintain n high standard OF business
honor and discipline members guilty
OF Illicit practices. together with the
exposure, failure and prosecution OF
concerns forced ont OF the Consolidated
Exchange on charges of "bucketing."
has attracted wide attention. Nearly
every prominent bank i'm the Wall
/ street district has been written to by
anxious customers OF concerns whose
business methods resemble those fol-
lowed by the firms exposed. Such sus-
| picions in many cases have been
| groundleSS. but the distrust has been
universal, with the result that the bust
ness or many reputable brokerage
houses has been seriously interfered
with. This has led TO the question
being asked generally, What is a buck
ct shop? The query has been put by
doctors, lawyers. merchants and many
other private parties unfamiliar with
the Wall street routine
In general, IL may be said that n
bucket shop is brokerage office where
orders are never executed and the
funds OF customers are fraudulently
appropriated. One OF the most sue
cessful New York bucket shops has an
extensive suit OF offices, fitted up with
all the paraphernalia OF Stock Ex-
change house. Operatives appear to
he receiving dispatches over private
wires, and n score OF clerks are busy
posting quotations on the bulletin
board. The rooms are always filled.
and the office does a very heavy bust
ness. But the wires do not 20 outside
the building at all, leading only TO n
basement room. from which dispatches
are sent and the fake scheme directed.
All the business is done on n one or
two point margin, no one being allow
ed TO put up more than five points. In
that way variety of small customers
are reached. who deposit $40. $40 or
$50. as the case may be. If half n
dozen persons buy Union Pacific at 81
on one point margin. the manager of
the office gives the signal for q flc-
titiOus quotation of SO. That wines
out the contingent, and the office "buck-
cts the proceeds. which sometimes
amount to as much as $4,000 or S1a,-
600 in single stock, In cases where
fictitious quotations are not possible.
the more wealthy bucket shop men
club together and depress values on
the regular Stock Exchange to point
where their customers margin be-
comes exhausted. They may spend
$4,000 in doing this, but where sew
eral hundred thousand shares are in
volved their relative profits are enor-
nous.
An interesting story was told the other
day where one rich man who was sen,
to Los Angeles by his physician ar
ranged with his New York broker TO
wire on quotations of the principal
stocks every hour. He noticed, how
ever. that it was n daily custom for the |
guests Mt the hotel where ne Vas stop
ping to visit large brokerage Office |
which displayed huge bulletin boards |
showing the movements of various |
shares. The office was expensively |
equipped and appeared to do a thriv- |
Ing business. The visitor soon observ- |
ed, however. that the quotations diff |
iered widely from those sent out by |
his New York agent, and suspecting |
that something was wrong, he left In, |
structions ut the hotel to have the
messages sent him ut the brokers' Of |
flee as soon as received, This was
done, and he Immediately discovered |
that the quotations displayed on the |
bulletin hoard were fictitious and that |
patrons OF the firm were being system
atically robbed. The concern Was n |
bucket shop and received enormous |
revenues by bucketing the funds of its |
customers, who were swindled out OF |
their margins.
In this way the bucket shop always |
wins, except in continually rising |
stock market, where some concerns
have been forced TO the wall. The pub, |
lie as rule only buys for an advance.
and never sells stock short,-New York |
Post.