Yorkville enquirer. [volume] (Yorkville, S.C.) 1855-2006, 1922-03-21
GANG OF THIEVES.
Operation of So-calIed Exchanges Full
ly Exposed.

ly Exposed. s
Officials Of the American Cotton Ex-
change claim that the investigation
of that institution in progress has been
brought about by it's enemies, including
the New York Cotton Exchange and
the New Orleans Cotton Exchange.
However this may be, the inquiry be-
fore Chief Magistrate William McAdoo
in New York has resulted already in
some exceedingly interesting disclos-.
ures. The conclusion is inescapable-if
the witnesses are to be believed at all
that the transactions in cotton which
took place among the members of the
American Cotton Exchange reeked with
fraud and that customers were fleeced
in the most wholesale manner. Magis-
trate McAdoo asked one witnesses
whether the customer at a distance
ever won. He might with an honest
broker" was the answer, "but he al
ways lost twice as much. The broker
always figures his customer as wrong"
1t was testified that when cotton was
90 cents last September one concern
received such a flood of buying orders
that they did not have time to go
through the formality Of putting their
trades across the ring, but a member
Of the firm simply sorted out the or
ders, filled in prices and sent confirma-
ton to the customers. Ninety per cent
OF the business, witnesses said. was
done by brokers with their fingers
crossed. The New York Herald thus
summarizes what is meant by this fin
ger crossing system:
"An order comes in from the South
to an American exchange broker Tor
the purchase of cotton. The broker
goes into the ring and looks at the New
York Cotton Exchange quotations and
offers to buy at the last posted figure.
Getting no offer to sell he raises his bid
successfully until he feels he has gone
as high as he dare on his customers
money-four or five points above the
New York quotations-and on his next
bid holds aloft his crossed fore ana
middle fingers. Another broker with
whom he has specific or standing pre-
arrangement catches that signal and in
response holds up his crossed fingers
and cries 'Sold!'
"At the end of the days business the
crossed orders are made out in
bought and sold slips, one transac-
ton going into the brokers' books as
the execution Of his customers order
and the offsetting transaction being re-
corded in q dummy account. These
.t.,,. q
right in the records of the American
Cotton and Grain Clearing House, so
that the customer hasn't chance to
discover the bucketing Of the order.
mo cotton is actually bought, and,
according to testimony, none can be
bought except in small quantities on
rare occasions
The New York Globe declares that
undoubtedly the criminal aspects Of the
situation which has been disclosed will
be adequately dealt with by the district
attorney and in the courts. However,
while the law is inadequate to punish
such abuses as have been shown to eX-
st this is not the only phase which is
of Importance. "The economic menace
Of the recent growth Of houses special
izing in petty cotton speculation is
very great" says the Globe, even when
the law is being technically observed.
An inquiry conducted by the Globe has
shown that the South is hOneycombed
with agencies of firms which appeal to
the gambling instinct of persons Of
small means. Speculation of that ma
ture is doomed from the start"
Denunciation Of the cotton exchanges
has been favorite pastime in the
South for a great many years. Yet now
we are told that it is the South which
has supported the crooked brokers.
The sequel of the fingercrossing deals
of the American Exchange brokers lies
south of the Mason and Dixon line"
says the Herald. Various brokers,
formerly of the American Exchange,