The Rock Island Argus and daily union. (Rock Island, Ill.) 1920-1923, 1921-05-28
Frederic Haslkin's Letter
A Ne.O Peril to Swindlers.

New York City. May 37-The
state Of New York II now aftsr the
scalp Of the fake stock promoter
! BY I new law; known - the MAI.
tin auti-fraud act, recently signed
By the governor, the attorney gen
leral Of the state IL authorized to
Investigate the activities OF all per
Sons or concerns suspected OF foist-
ing fraudulent securities upon the
trusting public. Said suspicions
proving correct, he 10 further An
thorized to make arrests and pro
coed with the prosecution OF the
offenders.
According to the latest estimate
Of the federal trade commission.
$500. 00o. 900 10 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 rep
resents large numbers Of small
savings accounts hastily with
drawn from banks, g we'll ~ the
waste Of much capital that could
be used to float legitimate enter
prises. Swindling is becoming SO
successful that it Is having q dis
thn hr,u n ut
| reputable concerns.
In New York city this state Of
affairs lie particularly apparent. In
the old days when the famous In
spector Byrnes maintained his So
called dead line" at Fulton street.
beyond which few crooks dared
pass, the large financial houses Of
Wall street operated in dignified
seclusion. Their operations might
not be always regular, but they
were exclusive. Today, however,
the dead line" is but faded men,
DRY, and the old guard of the stock
exchange finds itself surrounded
on every side by. small fraudulent
concerns 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 promoters who have nothing
behind their smooth talk but worth
less paper. 1t would be bad enough
IL the swindlers stuck to small
game and we're content to fleece
the very small investor of his in
significant savings and life insur-
ance. but they are not 20 consid-
crate. Much Of their business il
transacted with the professional
classes--lawyers, doctors, well-es-
tablished merchants, successful
business women, and even bank
ers. For It is a curious fact, well
known in Wall street. that the cas-
lest victims are 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 laws against swindling in New
York, but great difficulty has al
ways been encountered in enforc-
ing them. Swindling is an ancient
art and has acquired much valua-
BILE technique through the centur-
les. Thus over and over again it
has been shown that even though
everything may point to . fake
stock sellers guilt, it is impossible
to obtain necessary proofs to con-
Wet him.
For example, most Of the stock
selling that goes on in the polished
underworld of Wall street is done
by means Of the telephone. Not
that there are not many fraudulent
firms still boldly using the mails.
but the telephone is largely replac-
ing the bulk of mail order business.
Nothing definite can be pinned on
voice over the wire, and . long
distance call receives attention
where nothing else will. Promises
made over the wire cannot be re-
produced in court-not unless
someone has q dictaphone about.
The following bitter experience
Of New York business man, the
head of q large importing house,
will illustrate the dizziness with
which the phone salesman works:
The importer was greeted on the
telephone one morning q few
months ago by pleasant, cultured
voice, which frankly admitted that
it belonged to one Of those annoy
ing pests-a stock salesman. The
importer was not pleased, and he
initmated as much. Then the sales
man secured his complete attention