Evening star., 1907-08-24
Bucket Shops, Too.

Ever since the local crusade against the
haudb0oks was started in consequence of
the demand of The Star for an enforcement
of the laws and the suppression of this
evil. there has been a disposition in some
quarters to CriticiSe the prosecuting off,
GERS Of the District for their failure to pro-
Ceed against that twin menace to the pros
per!ty and moral heath of the community
the bucket shop This criticism has been
unwarranted was attested yesterday by
the raids conducted against several of these
establishments. 1t has been necessary to
proceed slowly and carefully in thu prem
ises. but an excellent start has been made
and the outcome Of the proceedings will be
watched with the keenest interest by all
WashngtOnians
There IS a distinction with broad differ
ence between the bucket shop and the legitf-
mate brokers' establishment Whereas in
the latter stocks and bonds are actually
bohSht and sold, being transferred from
holder To holder in the bucket shOp the
transaction is purely fictitious in straight
business sense and is veritably method of
gambling. \ certain sum of money is put
up as a so-Called margin" to cover the
fluctuations of the price list. If the price
falls or rises beyond the point fixed by the
CUSTOMER
loses. according as he is playing the bull or
the bear side OF the market In other
words he has bet certain sum of money
that the market will not fall or rise below
the point named by him. The so-calIed
broker who takes his money bets on the
contrary proposition. There is no transfer
of money to New York Boston or other
center of trading. There is no transfer of
stocks or bonds to the customers name on
the hooks of the company The customer is
not a prospective owner of these securities
having no intention ever to complete the
purchase by paying the amount they theo-
retically cost him. 1t is his design to sell
out when the market rises or falls sufficient
ly to yield him profit"
There is some confusion In the public
mind now and then as to this difference
because of the practice of many customers
in perfectly legitimate brokerage establish
ments to buy on margin" This is IN
Questionahly form of speculation. In the
sense that it is not an invest ment enter
prise II is in some cases a matter of buy
Ing on borrowed money. with the stock
thus purchased put up as security for the
balance due. But such margin transactions
are marked by the actual transfer of stock
the broker standing sponsor for the pur-
'Hd9'i anu IN some cases. himself adyanc-
ing the funds necessary to carry out the
transaction. Or the broker may sell out the
customer whose margin is exhausted and
who does not respond to call for additional
security.
The district attorney has laid the founda-
tion for test of the laws with reference
to this evil, which probable causes. a
lamentable activity and a steady drain of
funds from proper business lines. IL is be-
Eeved that the statutes and the code suf-
hce to stamp the bucket shop as a gambling
device. and that as such the proprietor or
manager of such an establishment is sub
lect to the penalties provided. If. however
II Is found that the laws do not reach this
evil. fresh legislation Will become an i'm
Perative necessity, for the bucket shop
along with the handbook, must go.