The New York herald., 1922-03-15
new COTTON BOARD
IS 90 P.C.BUCKETNG,
SAY EXPELLED MEN
American Exchange Trad
ers Gross Fingers to Cross
Their Orders
FEW BALES AVAILABLE
Boy Shows His Job Was to
Borrow Quotations From
Old Market.
PRICES ALWAYS HIGHER
Southern Customers Called
Chief Suckers for Pre-
arranged Deals.
PRICES ALWAYS HIGHER


The brokers of the American Cot
ton Exchange do 80 per cent. of their
business with their fingers crossed,
and usually on prices three. four or
five points in advance of the recog-
nized cotton market figures of the
New York Cotton Exchange, accord
ing to the testimony of witnesses yes
terday before Chief Magistrate Will
lam McAdoo at the John Doe inquiry
into the bucketing charges against the
American exchange.
The irony of the story told by those
witnesses was that a broket in making
trade on the floor Of the exchange
with his fingers crossed meant just
exactly what the gesture popularity
symbolizes-namely that he was not
really making a trade, but crossing
a sale, which is the lingo of the ex-
change for bucketing.
The finger crossing trick is not lim-
tied, but is the universal gesture Of the
entire membership Of the exchange, ac-
cording to the testimony, and that Is
the case not necessarily because broker
deliberately desires to bucket his rus
toner's order but for the reason also
that frequently it is impossible actually
10 buy bale of cotton In the American
exchange. though actual delivery Of cot
ton may be effected at any time on the
New York exchange. across the street.
why Ring Tried to buy.
The testimony revealed that It was that
inability to buy cotton on the American
exchange that brought about the pro-
posal, disclosed at Mondays. hearing, to
buy $4,000 bales through the New York
exchange for sale to American exchange
brokers when conditions made an ac-
tual purchase Of cotton imperative.
One concern--the Mathewson Trading
Corpora ton. financed by Randolph Rose
& Son--actually was created to have cot
ton available for delivery. 1t was when
that concern ceased TO function that
conditions became so terrible" on the
American exchange that the proposal to
b1y supply for the relief of short
brokers was made. The plan, however.
was never carried out
The sequel to the finger crossing deals
Of the American exchange brokers lies
south of Mason and Dixon line. Va
rous brokers, formerly members of the
American exchange, told of how the
American exchange specializes in South
ern clientele.
One broker said OF his hundreds Of
customers he had just two north of the
Potomac River. 1t was then described
how the chances of those clients to
escape the consequences of bucketing are
virtually nil. Glowing literature de-
signed to 'hook" the Southern trade was
introduced In evidence.
Roy Obtains Quotations.
TIL. hearing also solved the mystery
OF how the American exchange obtained
the New York and Liverpool quotations.
which IL marked up on its quotations
board in the ring room. 1t was brought
out that the American exchange had
negotiated In vain with the New York
exchange to obtain its quotation SER
vice.
Then Howard Thayer. a seventeen
year-old boy, now In the employ of A.
A. Housman & Co.. of the New York
exchange, but until a month ago board
boy of the American exchange, took
the stand and told how the trick was
turned.
That. he said. was by the simple ex-
pedieut OF calling over a telephone at
his elbow while he stood at the board.
chalk In hand, any one of number OF
New York Cotton Exchange brokers
who gave him the market" He said
he had a N,sw York Cotton Exchange
house on the wire getting quotations
virtually every minute of the trading
hours. so that the New York exchange
figures went on the American board
within few seconds after they ap-
peared on the New York board.
A tba tfrna a left the aaryira aF f1a
American exchange he had four houses
which he called regularly for quota
tions. he said. Thayer mentioned Le-
land e. Co, Clark a. Co and Peers as
among those from whom he got such
Information.
Witnesses Tell Same story.
The alleged bucketing methods preva-
lent in the American exchange were
described in virtually Identical detail by
samuel Landecker OF Ormsbee e. Lam
decker and William n. Wilson and ].
~ Watson, all formerly members of the
American exchange. who said they got
out of the exchange because they found
y impossible to do a legitimate commits
sion business in that exchange.
Wilson and Watson were partners in
business. All three said they resigned
after repeated protests 70 the officers
a. w. Graham. president. and q. w.
Pratt secretary-against the alleged
practices without avail. They said they
were always put off with promises OF
Improvement of conditions
One of the encouraging announce
ments.' according to Landecker was
that zone of the biggest brokers In the
street Is coming In and will put new life
In things That concern. hs said, later
proved 10 be J. y. Sugarman e Co.
which since has failed owing creditors
100000. Joseph y. Sugarman now Is
under indictment charged with the lar
ccny Of one Of his clients securities.
Landecker described Pratt as ."the
man who held the house OF cards to-
gcther." The witness said he and sew
Continued on Page Six.
Tr~afwtroy and yyofrI ana ur~tou~.ct.