The Dayton forum. [volume] (Dayton, Ohio) 1913-1949, 1919-08-29
CROOKED BROKERS
REAP OIL. PROFITS
Fraudulent Promoters Offer
80 20 Per Cent comrnis-
sion as a Lure.
INNOCENT ARE THE SUFFERERS
aaauiar sasurnaiis Of swindlinB is
Mcss In progress--publlcity 10
Mrpes as Beat Remedy
Ter Evil.

New York.--The inner philosophy o.
the buccaneer oil promotion company
In the business Of selling stocks In
stead og oil Ii neatly exposed In
confidential" letter received the nthe,
day by q reputable New York Stecl
Exchange firm, says the New Yorl
Sun. The writer. an officer OF q s'herf
today and gone tomorrow" Westerl
taking corporation. was trying to get
New York broker to put out Its seeur!
ties. and obviously tbonght he was ad
dressing Arm OF traders as shady a
himself.
'sYou know" he wrote, athe heavy
cost IN In finding new clients. Your
profit Is made In selling them repeated
" the same stock as the dividend and
price advance"
He then offered TO pay commission
OF 83 1-3 per cent. under which agree
ment 81 OF every IS paid by the In
vessOr would stay In the hands OF the
stock peddler. The generous "oiir man
continued:
'aThe price Of the stock liz So share.
II WILL be advanced to s2.25 within the
nexs 30 days, after which 1t viii be
gradually raised to $3. These addi-
tionnl raises are the best methods
known to sell stock to clients
Shares Are valueless.
The stock had no value; there was
nothing behind 1t. The price was an
arbitrary figure fixed by the company.
The proposed raises would have been
arbitrary If buyer had tried TO sell
the company would not have bought
the stuff back at any price. The COM
pany Was merely intent on getting q
broker 10 go shares with 1t In kidding
the public into snatching al the secpri-
ties by "the best methods known to
sell stock to clients" Reputable
brokers do NOT even answer such let
ters. Nor will they allow their Gus
toners to buy stocks which have the
fainsest odor OF trickery if they can
prevent II. The other day man who
lives In suburb of New York got a
hot tip on new oil stock recently In
tr0drced ON the curb but not listed. He
hustled into town and asked a broker
WHOM hi. knew TO buy 800 shares.
'ss nj do it," said the broker.
III thought you could buy anything" :"
sas& the eommuter.
s'Oertainly can buy anything. but
shall have TO decline TO take your orr
der 1ur this stock. don't know any
thing positive about the company. but
something Of the people who are put
ting II out"
The customer departed in some
thing of huff, for he had splendid
information" about the stock. He
found another broker and purchased
the 500 shares. That afternoon 1t
went up nearly point. which Is a
lot for priced curb security, aati
the suburhanite tried to take his quick
Drczat. His new broker, however. was
unable TO get bid ut the new price.
In fact he couldn't get any bid at all.
although the curh continued to quote
the high figure. (, .-
The buyer of the 500 shares stiil had
them recently aud judging by The ex-
peEaences of Others with oil companies
Of the same stripe they eventually will
pass TO his heirs as an interesting
souvenir. unless the waste paper man
gets them first.
Situation Ia Dreadful.
The Sun asked man of prominence
In the New York Stock Exchange how.
1t felt as an organization about the
swindiers' saturnalia now in progress
and what IL could do to protect fhe
public.
"0f course" he answered, 1--WE are
more than Mortified. All the time the
most ptiful eases are being reported
TO goyernesses, all sorts OF poor
persons. losing all their savings In oil
Investments The situation is per-
fectly dreadful. Outside OF the suffer
Ing it causes individuals, what repu-.
tats0n 1t Is getting for the city of New
York. People all around the country
are being LED to believe we are nest
OF swindlers. The government has
done something. but why 1t doesn't do
more / don't understand.
"A few years ago the New York
Stock Exchange nat the bucketshops
out OF business Dy taking our ticker
quotations away from them. an ACT
which the courts sustained.
ssThe New York Stock Exchange is
doing all 1t can, and In cooperation
with representatives OF the district at
tOrney has got action In several cases
but we have no control except over
cur own members. The most effective
remedy for these abuses Is publicity"