New-York tribune., 1919-05-24
ralley, the Acting District
Attorney, SaysNo Grounds
Have Been Found ON
Which to Base Convictions
Widest Fraud i'm History
Stock Exchange Governors
Say Kaffir and Coldfeld
Crazes Are Far Eclipsed

torney in the absence Of District At
torney Swami, declared yesterday that
his office is powerless to check what
veteran Wall Street men declare to be
the widest orgy of oil stock swindling
the country has ever known. A "blue
sky law, he admitted, might help
That the existing situation was fore
seen as far back as year ago, and the
need Of national restrictive law, ad-
vocatcd a. a conference called by the
capital issues committee of the Fed
eral Reserve Board, was stated last
night by Edward S. Brogan, until re-
Gently head of the bureau of CONNER
cal frauds Of the District Attorneys
office.
"This conference" Mr.. Brogan said,
was held in Washington in July last
1t was suggested and agreed then that
law was needed to protect the public
against stock swindlers.
Vigilance Committee Planned
"a few weeks ago, just before the
Victory Loan drive started, Secretary
Glass conferred with the governing
committee of the New York Stock Ex-
change on the matter. Subsequently
H. G. S. Noble then president of the
exchange, called a meeting of brokers
and other leaders in the financial dis
trlct. At this meeting the formation
OF national vigilance commission was
decided upon. This commission will
try to obtain the enactment of a ma
tional blue sky" law to root out
frauds generally.
"In working out this plan William
1 H. Maxwell, chairman of the commit
tee on fraudulent advertising of the
Investment Bankers Association, and
George Hodges, of Remick, Hodges &
Co., New York Stock Exchange
house. are active. ExSecretary of the
Treasury McAdoo also has been asked
to join in the movement. 1t is hoped
that every reputable banker and broker
in the country will help put the crooks
cut of business
Mr.. Brogan would not discuss the
reasons leading up to his quitting the
District Attorneys office
Il stand on my record there he
said, "at the same time recognizing
Mr.. Swann's right to run his office in
his own way and to adopt the policy
that to him may promise the best re-
suits"
Speaking for the New York Curb
Market Association, nominally in
charge of the Broad Street curb mar
ket, Secretary Alfred B. sturges de
clared the organization is without
power to winnow out the frauds or
drive the swindlers from the market
place, because the association controls
but about 20 per cent of those who
work there, and as it is a public street
no one can say who may or may not
trade there.
he only remedy Mr.. Sturges can
see is placing the curb market under
a roof, as has been done with profit to
the members and safety to the public
in Boston. Such plan, in contempla-
tion when the country entered the war.
is, he says. once more being consid-
cred.
The extent of the speculation in oil
stocks is beyond that Of any other
speculation within the recollection Of
brokers familiar with conditions in the
markets Of this country and Europe
for a generation past. The nearest ap-
proach, they say, was the kafir boom
of half score Of years ago, when Lon
don went crazy over South African
/ gold mining shares, and more recently
when the same market registered great
excitement over rubber stocks The
nearest thing in this country was the
Godfield craze of few years ago,
when fortunes we're cleaned up by
swindlers through the fraudulent sale
of Nevada goldmning stocks.
That the extent and wildness Of the
speculation have caused serious
thought to the governing committee of
the New York Stock Exchange was
made known by an active member of
that body yesterday 1t had he said,
been seeking ways and means of pro-
tectlng the public on whom tho swim
dlers feed, but had been unable to
work out any plan of action.
Want Workable Plan
"n," said he, "any one will present
a workable plan we will be nightly
obliged to him. Roughly all we can
sec IN sight is a campaign of educa-
ton That at its best is slow work
AT its worst the swinders use the
cam paign to their own advantage.
See they will say, the New York
Stock Exchange is sore because we VIII
not do business with them. We do
not intend that the wolves of Wall
Street will get this. We want the
little fellow to get his chance to make
money. 1t is q sad commentary on
public wisdom that this line of talk
catches many"
Just how serious the situation is waa
shown by Mr.. TaIley's declaration that
the outer Office of the District Attor-
ney is crowded every day by men and
women who come to complain thew have
been 'swindled in Wall Street" bv the
sale Of worthless stocks.
we cannot act" sal dhe. sunlesc
mere Is a complaint and evidence of
crime. The mere loss of money il NOT
actlonable, and this Office cannot act
as an adjustment bureau. The best wo
can do is see If any crime has been
committed. Usually there has not
that rs TO say, there is nothing on which
+ a conviction might be based Usually
1t IS civil matter these dissatisfied
( investors bring here. We can only refer
I them TO the civil courts. There must
De evidence of crime before VIC can
act"
Denies Brogans Charges
sIr. Talley denied that the dropcinc