The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1921-05-31
TOPEKA STATE JOURNAL
Information Bureau
FREDERIC j. HAsKIN, Director.
Washington, d. G.
A NEW PERIL TO swINDLERs.

of New York is now after the scalp |
of the fake stock promoter. By
new law, known as the Martin Anti
fraud Act, recently signed by the gov
ernor, the attorney general of the
state is authorized to investigate the
activities of all persons or concerns
suspected of foisting fraudulent Sc
curities upon the trusting public.
Said suspicious proving correct, he is
! further authorized to make arrests
| and proceed with the prosecution OF
i the offenders.
According to the latest estimate of
the federal trade commission, $780,
| 900, 900 is taken from the American
| public every year in the sale of
| worthless stocks. Clearly, the public
needs to be protected from its own
imbecility, but there is also another
! important angle to be considered.
| This enormous sum, which is lost to
! the public, is also lost to legitimate
| business. 1t represents large numbers
| of small savings accounts hastily
withdrawn from banks, as well as the
Vwaste of much capital that could be
used to float legitimate enterprises.
4 Swindling is becoming so successful
that it is having a disastrous effect
upon the business of reputable con-
| Germs.
In New York city this state of af-
fairs is particularly apparent. In the
| old days when the famous Inspector
Byrnes maintained his so-ca1led dead
line" at Fulton street, beyond which
few crooks dared pass, the large fl
nancial houses of Wall street operated
| in dignified seclusion. Their opera
lions might not be always regular,
but they were exclusive. Today, how
ever, the dead line is but a faded
memory, and the Old Guard of the
stock exchange finds itself surrounded
on every side by small fraudulent con-
Germs who launch their fake schemes
at slight expense and pick up most OF
/ their easy money along the curb.
/ Legitimate brokerage houses of the
district must sit by and see some of
their best clients snapped up by pro
motors who have nothing behind their
smooth talk but worthless paper. 1t
would be bad enough if the swindlers
stuck to small game and were content
: ITO fleece the very small investor of his
insignificant savings and life insur-
lance, but they are not so considerate.
Much~of their business is transacted
with the professional classes-laWyers,
! doctors established merchants,
; successful business women and even
bankers. For it is a curious fact, we'll
known in Wall street, that the easiest
: victims unusually those who have
: made a distinct success in their own
particular line of work.
The High Art of Fraud.
There have always been plenty of
4 laws against swindling in New York.
but great difficulty has always been
encountered in enforcing them. Swind-
, ling is an ancient art and has acquired
much valuable technique thru the cen
, turtles. Thus, over and over again it
has been shown that even tho every
thing may point to fake-stock-
D sellers guilt, it is impossible to obtain
= the necessary proofs to convict him.
| o
selling that goes on in the polished
! underworld of Wall street is done by
t means of the telephone Not thai
4 there are not many fraudulent firms
. still boldly using the mails, but the
t telephone is largely repla cling the bull
r of mail order business. Nothing def
e mite can be pinned on voice over the
!. wire, and a long distance call receive!
attention where nothing else will
: Promises made over the wire canno
r be reproduced in court-not unles!
: someone has a dfctaphone about.
\ The following bitter experience of g
= New York business man, the head OF
a large importing house, will illustrate
| the dizziness with which the phone
l. salesman works:
II The importer was greeted on the
; telephone one morning a few month;
L ago, by a pleasant, cultured voice
It which frankly admitted that it be
n longed to one of those annoying pest:
- "a stock salesman. The importer wa!
Il not pleased, and he minated as much
n Then the salesman secured his com
Il plete attention by giving him SOM
information about stock which he al
ready owned.
Eyes, I'm afraid you're right abou
that said the pleasant voice, con
firmng one of the importers wors
l. suspicious. tits due for drop. Nov
N about this other offering-you sim
- ply can't miss tits the chance of
~ lifetime. The oil is there; I've seen
X myself
ir Followed many oily details. an
= finally the importer agreed to take SO
l. shares at 81 a share, as much to ge
'y rid of the salesman as anything else
IS IF it doesn't go up to 81 a share
thirty days, / guarantee to return you
ie money" concluded the sales man, q
he finally relinqii1shed the receiver.
IS, A month later, much to the impor
-, ter's surprise, he actually did rece1v
:. a dividend check for $40. This wa
IL an immense relief as well as pro
1y to his dropping self-esteem. He ha
~, been remarka bly, astute in buying ths
= stock after all, he thought. This in
~ preston was strengthened the first
en- the next month when he received ar
hit other dividend check for So NO
:; he began to regret that he had NJ
81 taken more of the stock. Perhaps
p was not too late. He would find GU
at He called UP the office of the allege
anu dShSu 1Oi Inc
- No one of that name was associate
with the firm, he was told. That WE
ia, very strange, he thought. He did NJ
10 kno7e>~that the phone salesman neV'
gives his right name.
The CoInc-on.
~ But in a few minutes the sales1ns
re called him IN. Glib explanations fo
to lowed, together with additional sellil
~, facts. with the result that the import
= bought 5000 more shares of the stoc
Us The next month came check I
IN, $40, with letter explaining that t.
Ct stock had gone to So a share. II
importer was just in the right fran
rs of mind for the last choice bit of ba
by The salesman brought it, in a hurl
at in the form of telegram which