The Lancaster news. [volume] (Lancaster, S.C.) 1905-current, 1922-03-17
COTTON EXCHANGE
HUGE BUCKET SHOP
So Former Members Declare in
Court In John Doe
Investigation.
AT MERCY OF BROKER
southern Sp~ulatOr Ha. No Chance
And Witnesses Trs,if, TO Numcr-
"ts Instances of "tross Trading"
Fictitious Orders, Dummy Ac-
counts and Other Practices.


New York. March 16 Charyes
| that the American Cotton exchange
Is huge bucket shop. where actual
trading Is rare and where the
southern speculator is at the mercy
| OF the New York broker. were made
by former members OF the ex-
| change. at a John Doe investiga-
tion conducted by the district at
torney's Office before Chief City Mag
istrate McAdoo.
Witnesses testified TO numerous
instances OF Gross trading" feti-
tious orders. dummy accounts,
'scalping." secret manipulation OF
..unrecorded transactions, sensational
advertising designed to WOO the ac-
counts OF small spectators In the
south and undtsguised bueketing Of
orders.
w. B. Wilson and J. H. Watson,
| members OF the nrm of Wilson &
Company. which was expelled from
the exchange last February 2s on
charges that they had warned their
clients against further dealings with
the institution. were principal wit
nesses for the prosecution.
| Orders "Bucketetl."
When there was cotton for sale
In the ring. we made bona fide sales
for our clients Mr.. Wilson testi-
fed. But the southerner, who is
an optimist about the cotton market,
almost invariably bought AS a re-
suit there seldom was any cotton for
sale and brokers simply 'bucketed'
the orders taking a chance on COW
ering themselves when cotton even
tually was offered in the ring -
The witness declared that he with
drew from the exchange after re-
peated complaints to officials that
lit had become absolutely impossi-
bic 10 transact business without
hucketinS Al the time OF his res
ignation in February he declared
conditions were such that little trad
ing was done on the floor OF the ex-
change. most OF the orders from
customers being huckcted outright
|. \ score OF the most promincn,
members Of the American exchange
some OF them its directors were
named az constituting the inner
circle" OF the trading ring
Only last January. the witness
testified. George w. Pratt. secretary
OF the exchange. sought to pacIfy
complaints with an announcement
that the district attorney had ex.
amined our books and given us q
clean bill OF health. Eve-ythips
has been fixed"
On Floor as "S~alprr''
J. II. Watson testified he fr.t en-.
tered the floor OF the exchang. Hs q
"scalper' for F.. l.. Dutton 4 GO
with instructions TO force the
market" when actual trade was in.
dulged in
Finally they caught me- shcr, OF
the market and then took the
! market for walk not bringing il
back for several weeks" tho witness
declared He then ceased "scalpinr
for Dutton and became a member of
the exchange. "bucking" orders on
his own account.
| DO you say YOU bucketed orders.
them asked Magistrate McAdoo.
who is sitting as a grand jury in the
Investigation
| Call IL what YOU want" The wit
ness replied. lit is just plain bucket
] inr -
During the big rush last Sep
temher when every southerner was
sneculating in cotton and we were
flooded with buying orders. hrok-
| "rs seldom went to the exchange to
do their trading They didn't have
time.
They simply marked prices on
the sales contracts. sent them out
for the signature OF the broker with
whom they had pre-arranred to
| complete the transaction OF a 6cti-
tious sale and entered il on their
books. Everybody was hucketinS."
tCSntineud on Page Four)