The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1921-12-22
Fin
AND


New York stock Exchange and by
the Consolidated Stock Exchange
than the public yet realizes.
1t is an old saying that an organi.
ration gradually takes on the char
acter of the man at the head OF It.
Ii this be 80, the stock exchanges In
New York are headed in the right
direction.
Seymour L. Cromwell, the present
president Of the New York Stock Elk
change, is an ideal man for the OF.
flee. He q old enough to have had
mature experience, yet young enough
to be full of dynamic energy. His
reputation is as notable as his COM
handing physique. He takes his re-
sponsibilities as head Of the stock
exchange very seriously. In fact, he
gives up a very large part OF his
time to these duties. Moreover, he
is tremendously anxious to have the
institution and Its operations abso-
lutely above reproach. Unlike GER
tain former regimes, President Crom-
well is not too narrow nor too bump
tious to listen to suggestions. nor
too mossbound to investigate and act
on those deemed wise.
The following incident win Illustrate
the kind Of man at the head OF the
Consolidated Exchange. A friend OF
mine received q communication from
Il certain Consolidated Echange firm
which led him to suspect that the
house was "bucketing' its orders; that
is, not actually buying shares ordered
by customers. He took the communi-
cation down to President Silkworth.
had a talk with him and received a
promise that the firms books would
be examined the following morning.
Investigators were duly put on the
job the following morning. The firm
made excuses that its books were not
posted right up to date and requested
the investigators return the following
day. They did. but were again given
-evasive replies. Permission to make
the desired examination being thus re-
fused the firms wires were Immediate
N ripped out and the firm drummed
out Of the exchange. ...
Although the most notorius and
most powerful bucketshops. controlled
by men Of wealth, were driven out of
business some time ago, the bucketing
evil has not been eradicated by any
means. Indeed, the qualifications of
the bucketshoppers extend over vir-
tually the whole continent. 1t Is easy
enough to have suspicion Of improper
dealings by brokers, but 1t Ia often very
difficult to obtain conclusive. black
and-white proof Of the wrongdoing.
= However, the Stock Exchange eau-
4;horities have tssn spending much
far-reaching evil. and I understand that
they are hopeful Of being able to clean
house more thoroughly than has ever
been possible In the past. An indlca-
ton of what is brewing was afforded
this week, when quite q number Of
shady firms had their wire connections
torn out, and thus branded az break
ers of the law.
The evils of bucketshopping are both
serious and numerous.
For example. when a bucketshop
finds that most Of the stocks bought
On margin by its customers-but not
actually bought by the bucketshop-
have advanced substantially in market
value, thus entailing heavy losses were
the bucketshop compelled to go into
the market and obtain certificates for
delivery, It is not unusual for GUS
toners to find one day that the broker
has quietly disappeared over night,
, leaving no address. His victims thus
lose every dollar they had put up for
the purchase OF securities.
Another trick Of powerful bucket
ehops-and many Of them are in league
lis to make a concerted raid on q
stock largely held by their customers.
BY acting suddenly and decisively, the
uo'ation can sometimes be depressed
90 sharply that the margin put up- by
customers Is entirely wiped out. Then
the customers receive note Of regret
ehatit was necessary to sell them out.
interruptions brokers Of this stripe
are also given to urging customers to
buy trashy stocks which are sus-
ceptible of being manipulated when
ever 1t suits the purpose of the buck
etshoppers. Thus a large amount of
money Ia, In course Of a year, put
into worthless stocks, which, under the
, pdvice Of legitimate firms, would have
'een invested in more Trustworthy
'ecurities.
Some Of the brokers who were run
nut of business this week were found
guilty of having rugged" stock quo.
'ations. Instead OF recording the
b. rtual prices prevailing on the ex.
change. they faxed quotations so as
20 enable them to cheat their Gus
toners. One cast-iron rule of the
Stock Exchange is that every mem
her and every concern connected
with Stock Exchange firms shall re
r,ort to every customer the name OF
he Stock Exchange firm from whom
stock is bought. or sold, and also
'.he price. A customer can thus check
up to ascertain II such sale or pur
hase was actually made. The exact
F~;hae of the purchase or sale Is alsc
lisen. In this way the customer car
Zee whether the price he Is charged
in accordance with the quotation
uling on the Stock Exchange at thai