The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-05-25
fraudulent Promoters Offer
4, 1918 Per Cent. Com
-s.. mission as q Lure.
CURB MARKET is ,'RIGGED'
Members of Stock Exchange
Urge Publicity as Best
, Weapon to Use.

ceived the other day BY reputable new
York Stock Exchange firm. The writer,
!. an officer of n here to-day and gone to-
morrow Western taking corporation.
was trying to get New York broker
= to put out its securities, and obviously
. thought he was addressing firm Of
vtraders as shady as himself
v "You know" he wrote. "she heavy
a.cost Is In finding new clients Your
eprofit is made in selling them repeatedly
the same stock as the dividend and price
advance"
4 He then offered to pay o commission
Z of 80 lis per cent, under which agree
'ment 81 of every 50 paid by sthe IN
:. weston would stay in the hands 2f the
stock peddler. The generous oil man
continued:
4 eThe price OF the stock is 80 a share.
soft will be advanced to $s.25 within the
next thirty days, after which 1t will be
;. gradually raised to SO. These additional
sraises are the best methods known to
4 sell stock to clients"
shares Are VaiueIess.
a. The stock had no value; there was
/, nothing behind It. The, price was an
arbitrary figure fixed by the company.
4 The proposed raises would have been
arbitrary. II buyer had tried to sell
1 the company would not have bought
the stuff back at any price. The COM
pany was merely intent on getting
broker to go shares with it in kidding
\ the public into snatching at the securi-
ties by 1.-THE best methods known to
sell stock TO CLIENTS" Reputable brokers
do not even answer such letters. Nor
will they allow their customers to buy
stocks which have the faintest odor OF
itrickery II they can prevent II. On
! Thursday a man who lives in a suburb
: of New York got hot. tip on new
oil stock recently introduced 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.
IT thought you could buy anything"
said the commuter.
Certainly i can buy anything. but I
\ shall have to decline to take your order
| for this stock. l don't know anything
/ positive about the company, but 1t looks
bad to me because I do know something
. of the people who are putting 1t out"
No Bid at Any Price.
The customer departed I'm something
of hum. for he had splendid informa-
ton" about the stock. He found an
other broker and purchased the 500
u bhdics. Ihdt dltcTnoOu IL went up
nearly a point, which Is a lot for .
slow priced Curb security, and the sub
uroanite tried to take his quick profit.
! His new broker. however, was. unable
/ to get a bid at the new price. In
I 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 yesterday. and judging by the ex-
Il narienNAa n others with nil N . q
of the same stripe they eventually will
pass to his heirs as an interesting
souvenir. unless the waste paper man
. gets them first.
THE Sun asked a man OF prominence
in the New York Stock Exchange how
II felt as an organization about the
swin6iers' saturnalfa now in progress
( public.
/ "CrOoked ms Loaded Dice"
of course" he answered. I'VE are
more than Mortified. All the time the
most pitiful cases are being reported to
us-governesses, all sorts of poor per-
! sons. losing all their savings in oil
Investments The situation is perfectly
dreadful. Outside of the suffering IL
causes individuals. what a reputation 1t
Is getting for the city OF New York.
R People all around the country are being
! led to believe we are a nest OF swindlers.
The Government has done something.
hut why 1t doesn't do more 1 don't
understand. Why. the game an played
I on the New York Curb is just as crooked
J as loaded dice in a gambling house.
The only bucket shoppers in the country
are congregated there, and the old
timers say they never saw such cinch.
"A few years ago the New York Stock
- 81. ,a1r aHa .
! business by taking our ticker quotations
away from them, an act which the
courts sustained. The curb has no
ticker now, but is operating through
) fictitious quotations and making prices
/ regardless Of other sales. Only to-day n
4 friend of mine told me that he ordered
' his broker to sell a certain number of
shares at the market when the price
was quoted at 81. 1t was sold at 90
I and the curb quotation continued to be
( 81.
Publicity the. Best Remedy.
THE 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 our
own members. The most effective rem
edy for these abuses is publicity, ano
THE SUN is performing public service
in calling attention to them. The whole
Z press ought TO take 1t up as a duty"
The Federal Trade Commission Is sup
posed to be getting after the fake stock
( companies, but this member of the Stock
Exchange said he had not heard as yet
of any results worth mentioning. The
Department of Justice occasionally
makes an arrest and a few indictments
I have been obtained by the United States
Attorney. A sequel to one of these has
just come to light.
When Louis Roumagnac,' a distin-
! glished looking Frenchman. was arrested
last fall on a charge OF using the maill
to defraud In connection with the sale
\ of stock of the Tuxpam Star OIL Cor
poration the stockholders OF the defunci
corporation appointed a protective COM
mittee to see what could be saved out
OF the wreck.
Not n Cent I'm the Treasury.
This committee. consisting of j. c.
Hand, H. j. Blessing and e. Plat, re-
Gently made report, saying It had as
I certained:
! That the Tuxpam Star OIL Corpora.
tion has no properties OF any kind or de-
Z scription at the present time
That the corporation Is encountered
with Judgments amounting approx
1 mately to &26o.000.
That there are claims outstanding
against the corporation aggregatins
s3s1, 900.
That the entire capital stock OF tn.
corporation, viz. $4,000, 900, has beer
4 disposed of by the forn,ar ndoar. "a -