The New York herald., 1922-08-25
75O,OOO,OOO STOCK
LOSSES REPORTED
Banton Says Crooked Brokers
Have Created Grave Prob
lem Since War;,
RLAMES WALL STREET
Says Legislators Listen to
Masters Voice From New
York Exchange.
BLAMEs WALL STREET

Declaring that the people of the
United States had lost more than $780,
100000 OF their savings since the var
through dealings with crooked stock
brokers and that as a result grave
economic problem faces the country Dis
trict Attorney Joab III. Banton in an
address before the Rotary Club OF
Brooklyn, at the Hotel Bossert, yester-
day urged the passage of legislation to
curb bucketshop brokers and himian
investment schemes.
Wall street influence so far had pre-
vented the passage of legislation to com
bat this situation. he said, and he em-
phasized the Importance to the Legis-
lature of men who would turn deaf
ear to he powerful moneyed interests.
Earlier in the day Mr.. Banton announced
that he had instructed Assistant District
Attorney Benjamin +. Schneider, in
charge of the Wall Street investigations,
to appear tomorrow before Judge
Charles G. Mott. Jr., in Part ~, Cen
eral Sessions, and request that dates be
fixed during September for the trial OF
Wall Street brokers indicted for bucket
ing and grand larceny.
/ When reached at Bernardsville by
telephone last night, Seymour l.. Crom-
wen. president of the New York Stock
Exchange. would make no comment on
Mr.. Banton's statement
shame of New York.
In his address Mr.. Banton said in
part:
"A grave economic problem faces the
country. 1t is not one relating to either
national or State politics. but to the
financial welfare or orr citizens Dur
Ing the war inten' I'VE campaigns for
the sale of Liberty bonds taught the
people that there were other invest
ments for their savings besides the
usual deposit accounts in savings banks.
Taking advantage Of this fact. plausi-
BILE statesmen have extended the argu-
ments used during the various Liberty
loan drives. and have induced the peo-
pie Of the United States since the close
Of the war to part with more than
$3.50. 100000 of their savings. In ex-
change for this large sum the people
have received certificates of stock which
have no more value than the PAPER
upon which they are printed. Re II
said to the shame Of New York that
the largest part of this larceny from
the people of their savings has taken
place in New York.
There is no protection In New YORK
by legislation against the exploitation OF
curities. Time and again legislation look
ing toward such protection has been de-
feated. At the recent session of the
Legislature, when a blue sky bill of q
very mild character was pending In the
Senate and the Assembly, the president
of the New York Stock Exchange ap-
peared before joint committee in OPP
position to this bill. and It was killed in
the committee.
BucketinE Thcfts.
''rhe people have been stirred By
these iossess and taking advantage OF
this fact the crooks who marketed fake
securities, and other crooks. began ia
advertise to the people that they should
not buy fake securities, but should buy
standard securities on an installment
plan. The money of the people began
to pour into the brokerage offices of
New York. and these so-called brokers
bucketed the orders and stole from the
people over s50.oo0,00o. Eighty-five brok-
erage houses have failed. The assets of
many are less than 2 per cent. of their
liabilities
There Is no more reason for an honest
broker to fail then there is for a ticket
agent or any one else who does business
on a commission basis. There are a few
honest failures among brokers These
are the result of large overhead and a
decline in the income from commissions.
But honest failures of brokers are as
rare in the financial world as white
blackbirds among the fowl of the
heavens. A broker fails because ne
takes his customers money and does not
buy what the customer orders, but uses i.
in riotous living.
"A bin was introduced az the last ses-
sion Of the Legislature. which would tend
to protect the people against such Grim
inal practices. This bill provided that
the brokerage business should be put
upon the same footing as our laws have
placed banks, bankers and trust com
panies. That is. the State Department
would supervise the brokerage busne So
and brokers should be licensed as are
banks, bankers and trust companies.
EVERY State Senator except the SEN
ator who introduced the bill received
a long telegram from the president OF
the New York Stock Exchange, opposing
the bill. and a majority OF the Senator's
hearing their masters voice. voted "a
recommit the bill"
CT DrL EDC DnADn 1An