The Madison daily leader. [volume] (Madison, S.D.) 1890-current, 1919-07-12
CROOKED BROKERS
REAP OIL PROFITS
Fraudulent Promoters Offer
80 1-3 Per Cent Commits
sion as a Lure.
INNOCENT ARE HESUFFERERs
Regular Saturnaiia Of Swindling is
Now In Propress-Pubiicity is
Urged as Best Remedy
for Evil.

New York.-The inner philosophy of
the buccaneer oil promotion company
In the business Of selling stocks in
stead of oil Is neatly exposed In a
confidential" letter received the other
day by a reputable New York Stock
Exchange firm, says the New York
Sun. The writer. an officer of a "here
today and gone tomorrow" Western
taking corporation, was trying to get n
New York broker to put out its securi.
ties, and obviously thought he was adj
dressing a firm of traders as shady as
himself.
you know" he wrote, "the heavy
cost is In finding new clients. Your
profit Is made In selling them repeated
ly the same stock as the dividend and
price advance"
He hen offered to pay a commission
OF 80 1-3 per cent. under which agree
ment 81 of every So paid by the in
weston would stay In the hands of the
stock peddler. The generous 'oil'' man
continued:
"The price of the stock Is So a share.
II will be advanced to 1925 within the
next 30 days, after which ii will be
gradually raised to So. These addi-
tional raises are the best methods
known to sell stock to clients"
Shares Are valueIess.
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 a 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 a
broker to go shares with 1t i'm kidding
the public into snatching at the securi-
ties by "the best methods known to
brokers do not ever answer such len
tiers. Nor will they allow their GUS
toners to buy stocks which have the
faintest odor of trickery If they a
prevent 1t. The other day a man who
lives In a suburb of New York got a
hot tip on a new oil stock recently In
troduced on the curb but not listed. He
hustled into town and asked a broker
whom he knew to buy 500 shares.
Cant do it," said the broker.
II thought you could buy anything"
said the commuter.
Certainly ! can buy anything, but I
shall have to decline to take your or
der for this stock. / don't know any
thing positive about the company, but
1t looks bad to me because I do know
something Of the people who are put
ting 1t out"
The customer departed In some
thing of a huff. for he had splendid
information" about the stock. He
found another broker and purchased
the 500 shares. That afternoon Ii
went up" nearly a point, which Is a
lot for a low-priced curb security, and
the suburbanite tried to take his quick
profit. His new broker. however. was
unable to get a bid at the new price.
In fact he couldn't get any bid at all,
although the curb continued TO quote
the high figure.
The buyer of the 500 shares still had
them recently and judging by the ex-
periences 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 10 Dreadful.
The Sun asked a man Of prominence
In the New York Stock Exchange how
1t felt as an organization about the
swindlers' saturnalia now In progress
and what 1t could do to protect the
public.
"Of course" he answered, tive are
more than Mortified. All the time the
most pitiful cases are being reported
to us-governesses, all sorts sSf, poor
persons, losing all their savings in oil
1 sinyastDsents.t,s The destinations is per
fectly dreadful. Outside of the suffer
ing 1t causes individuals, what a repu'
tation 1t Is getting for the city of New
York. People all around the country
are being led to believe we are a nesi
Of swindlers. The government has
done something. but why 1t doesn't dc
more / don't understand.
"A few years ago the New York
Stock Exchange put the bucketshops
out Of business by taking our ticker
quotations away from them, an act
which the courts sustained.
1.-THE New York Stock Exchange Is
doing all II can, and in cooperation
with representatives Of the district at
torney has got action in several cases
but we have no control except owe
our own members. The most effectivs
remedy for these abuses is publicity