Evening journal., 1908-06-06

thousand national banks Wnen CON
gress votes privileges and power 10
national banks based. as always it ig,
on size 4 capital and surplus, II will
be seen that large portion goes 10
American Monte Carlo.
The chief grievance of the people
against Wall Street has yet to be stat
ed. No one desires TO destroy or in
jure its great market for legitimate
trading in securities. But the morals
and business Of the entire country are
menaced by its margin gambling. SO
vast has this become that Il exceeds
thirty billion dollars annually four
times the value Of all the crops %
the United States. The speculating
public is also charged s2OO,0OO,OOO year
ly by the brokers for the privilege OF
being deliberately skinned in this fix
ed game.
Take short" sale for illustration. I
order my broker 10 sell short Ter
me say 1000 shares at par give KIM
no stock for I had none. He sells
Il. But the broker he sells to gets no
stock. He expected none Merely a
record of The purchase" and The "salc
Is made. My broker goes to another
broker and "borrows" the 100 shares
But he gets no stock and expected
none; for the other broker had no
actual stock to loan. only a false
and fraudulent entry Is made on the
balance sheet Of the exchange clearing
house. saying that my broker borrow
ed and tie other loaned the stock. The
other broker likewise "borrows" OF a
third, ana so on until forty or a hun
dred may have borrowed or "loaned''
that phantom 1000 shares which none
of them may ever see or expect 10
zee. And behind each broker Is som 2
customer betting on the future price
of that stock and paying dearly for
the privilege OF doing so.
Ii cases of long purchases on mar
gin each broker collects from his GUS
toner commissions, and six per cent.
or more interest. not on the $4,000
put up as margin but on $4,000. And
the broker then either loans" his cus-
toners phantom stock, or, II he gets
the actual snares. the broker has them
issued in his own name and then pats
them up with his bank as collateral
security for his own loan, on which he
may pay but two per cent interest.
while he charges his customer six or
more.
The system Of balancing" author
ized by the exchange respecting mar
Gin trading Is said to include over IS
per cent OF the total business. 1 be-
lieve IL is virtually only a bucket
shop business, and a felony under the
new law. A broker recoi'ing buy
orders for5O 00Osharcs n. Y Central on
morgin, ana same day sell orders Ter
so, 900 shares OF same stock. balances
the Si0.OO0,GO0 of transactions withou-
delivering, handling or seeing even one
share OF stock Yet he holds $1,000,
60o margin money bet by his CUSTOM
ers on future price of that stock. Aud
none Of these customers ever get or see
any stock If the buy" orders hld
been 5000 shares. he would have as
sumed 10 satisfy the law requiring a
'b,na fGe Intention" to deliver the ac
tual stock by delivering only 10 shai es
to complete transactions calling for
k0,01O shares. This is the hocus pocus
of Wall streets Monte Carlo
Indicted for GRAND Larceny.
AM this Is called legitimate buF-
ress. aso sn acIual del'ters Il the
stock! Either 1t was purely a fic.i-
tious g5mbiins transaction, { oct on
me iNlutF quoAdboh PiiScf "a tis S4'~
ker has committed grand larceny by
pledging his customers property :or
his own debt.
A few days ago a broker who long
had been a prominent member Of the
stock exchange, was indicted for grand
larceny because he used his custom
er's stock as security for his personal
! loan. IIo declared this 10 be the COM
mon practice in Wall Street. But he
had failed in business. had lost mis- in
fuence, was down and out. Something
had TO be done to punish him for thus
revealing the secrets OF the craft and
to divert public suspicion from others
constantly doing the same thing, or
substantially so, with the connivarce
OF big banks. And without the sup