The New York herald., 1922-02-15
j.. S. TO join STATES
IN BUCKET SHOP WAR
All Federal Agencies Will
Strive to End Wild Cat
Stock Evils.
CONGRESS- AID SEEN
Blue Sky Laws Will Be In
vOked in Nationwide
Campaign.
480 CASES ARE PENDING
Victims Have Been Mulcted
Out of S14O,OOO,OOO in
Last Five Years.
480 CASES ARE PENDING
Special Dispatch to TIE NEW YORK HERALD.
New York Herald Bureau.
Was EAh Ia

Specdt DtSpdtch to THE NEW YORK HERALD
New York Herald Bureau.
Washington. ID. C.. Feb. IL.
Attorney General Daugherty an
make war upon wildcat" stock pro-
moters and statesmen. The Department
OF Justice plan is to bring about more
unified action among States having
"bue sky" laws. and possibly suggest
legislation which will supplement penal
ties provided in the postal laws and thus
strengthen the hands of Government
prosecutors.
The American people have been filched
of $140,011,231 in the last five years by
worthless stock boosters. The sufferers
have been largely the poorer classes
who can least afford to lose their saw
ings in fraudulent schemes.
The huge sum mentioned by the At
torney-General was based on revelations
made by Federal Attorneys all over the
United States In 4S0 stock swindling
cases which are pending in the Federal
courts. These cases include a large
number of bucket shop cases.
Attorney General Daugherty said
bucket shop operations represent only a
part of the stock swindlng conspiracies
in which thousands now are falling VIC
times. The Government. he said, has
left to the States the prosecution of the
larger number of cases of swindling of
this kind. The cases mentioned by the
Attorney General are those which the
Department of Justice has recorded as
coming under the Federal postal laws.
those of stock promoters who have used
the mails to disseminate high sounding
literature as a means OF inducing in
vestors to buy stocks that are not worth
the paper on which they are written.
Praises "HeraIdv Expose.
Attorney General Daugherty was i'm
pressed with THE NEW YORK HERALp's
expose Of bucket shop operations in
New York and steps now being taken to
abolish. such operations. But prosecu-
tions Of such offenders, Mr.. Daugherty
said. is solely under the New York
State laws. So far District Attorney
Hayward has. not consulted the Attor-
ney-General relative to any of these
cases. but the Government, 1t was said.
is following the Investigations closely
and stands ready to cooperate with the
State authorities.
The attitude of the Department of
Justice as outlined by the Attorney
General is that more uniform State
laws dealing with blue sky operations
should be enacted.
Mr.. Daugherty suggested that blue
sky Commissioners of the various States
having such statutes should get to-
gether and act under a unified plan
effectively to check schemers who set
out deliberately to mulct the public by
dumping issues of worthless securities
of all kinds
The Attorney-General said he de-
plored the fact so few persons have
been convicted under the blue sky laws.
He said there now is enough shown by
the facts to justify Governors and At
torney Generals of the States in taking
action to stamp out offenses.
Records Of the Attorney General
showed in the cases of stock swindling
now in Federal courts awaiting trial
SIS persons arrested or indicted are at
liberty on bond. In numerous cases the
accused are being released on nominal
bonds. Most of the cases have been
on the dockets five years or more.
Made "kiIIingv Here.
In New York State. the Attorney
General said, stock swindlers have made
killing" In the 81 cases awaiting
trial involving the arrest or indictment
Of 23S persons in. New York he esti-
mated the losses OF investors at s15,-
4S2,110. Mir. Daugherty said the
Southern District of New York State
has been one Of the most fruitful fields
for bogus stock statesmen.
Reports from the District Attorneys
Office in Kansas City. Mo-. show that IA
L..
volved losses to the people amounting to
S31.779.200. In northern Illinois the
District Attorney in Chicago reported
losses were s17.000.000 in 43 cases still
pending.
In the eastern district of Texas re-
ports showed losses In bad stock invest
nents amounting to s7,797,000.
The Attorney General estimated that
$3.50. 900 had been sunk in the Florida
Everglades land scheme, in which most
of the investors bought water instead of
earth for their cash outlays.
Ringleaders in the Everglades scheme
were indicted I'm the Federai court AZ
Chicago and their cases are still pend
ing.
The Attorney General said there
should be more thorough cooperation
among the State authorities, and IL this
legislation by Congress. though he sug-
gested that the latter course was pos
sible IL State authorities are lax IN
prosecuting offenders in this class.
Backing up Acknowledgement Daugh-
erty in prosecuting bucket shop opera
tors are the Treasury Department. the
Federal Trade Commission and the Post
Office Department.
Through appeals signed by Secretary
Mellon. the Treasury Department is con-
Quoting nationwide campaign of edu-
cation in the lore OF Government bonds.
the registration methods of selling aud
buying them and how to borrow money
on them.
First. Secretary Mellon and Secretary
Houston before him urged every holder
OF Government security TO retain Il
even II that could be accomplished Only
through borrowing money on the security
as collateral They practically guarnn.
teed that all the bonds issued by the
Government during the great war would
eventually go TO par. Victory notes
already have made good this guaranty.
selling from one to one and one-half
points above par
An advance of between 10 and IL per
cent has occurred in the last twelve
months In the market value Of all Lib