New-York tribune., 1922-02-10
Begun
Into Bucket
Shops in City
tCcntirurd from pase sre)

had with other brokers or firms that
such purchases and sales we're no.
bona tide, but were to be considered
rs cross trades. and would 40 appear
on the Clearing House sheets Of the
members.
"Thc manner in which such irregular
trades were identified was for the
broker to purchase or sell crossing
his fingers. and tho same sign would
be given by the broker accepting the
offer to buy or sell. thereby indicating,
as above stated. that the trade was to
be cross trade and would 50 appear
on the sheets.
Several Southern acquaintances
have reported to me that when orders
to buy or sell cotton in units Of less
than 100 bales were rendered to rep
resentatIves of the members Of the
American Cotton Exchange it was rep
resented that said orders would be
executed on the big exchange and
that orders so given would be cx-
ecuted and reported to them in less
than one minute.
Calls Promise Impossible
"lf an actual purchase or sale had
been made, it would be a physical i'm
possibility with the facilities at the
command OF the American Cotton Ex-
change to have executed and reported
the execution Of such an order In that
space Of time"
Mr.. Graham, in his denial Of these
charges. said he did not believe the
NewS Nork Cotton Exchange had any
part in the instigation OF the investiga-
cation and that the public would be
very much amused to learn the real
names and motives of the chief actors
Gin the incident'
Mr.. Graham said that on Tuesday. at
the request of the District Attorney ii,
office, he called on Assistant District
Attorney James J. Wilson, accompanied
by Mr. Pratt, the secretary Of tho cx-
change. and Albert Massey. an attor-
ney, and had full and free discussion
of the affairs Of the exchange.
He assured Mr.. Wilson. he said. that
there was nothing mysterious or secret
about its operation and that the book 8
of the exchange were open at all times
for any Investigation the state or Fed
eral authorities might see fit to insti-
tutc.
He said also that the exchange was
organized to fill what had long been
felt to be want in the cotton world
and. if conducted honestly and eff
ciently, would prove Of great benefit to
the small merchant, mill man and
farmer throughout the South.
Defends Its Organization
Mr.. Graham said the exchange was
conducted along tines similar to those
Of the larger exchanges, with the ex-
ception that while on other exchanges
the unit of trade was 100 bales and
New York or New Orleans the sole
point of delivery. on the American Cot
tor Exchange the unit Of trade was
ten bales and the point Of delivery New
York and the spot cotton markets des-
igrated by the United States Board OF
Agriculture.
MIR. Graham was for four and a halt
years United States cotton futures at
torney in charge of the enforcement
of the Smith-Lever bill and for sew.
eral years in charge Of the enforcement
OF the collection OF the United States
stamp tax on the issue and transfer
OF stock.
T.. A. Pierce, managing partner OF
A. A. Housman & Co., and Louis
brooks, q governor of the New Yorl
Cotton Exchange. said yesterday they
attention of the District Attorneys Of
fec to the American Cotton Exchange.
Mr.. Brooks said he had been stirred
into action "by tho fact that the meth
cds pursued by the American Cottor
Exchange were beginning to be of gen
cral knowledge and that their acts were
being charged up in the minds Of the
public throughout the Southern states
against all exchanged"
Promises Big Disclosures
Assistant District Attorney Simmons
referring to the general Investigation
and not to that of the American Cot
ton Exchange in particular, said
We have only scratched the surface
so far. The Wall Street investigation
is going to be bigger than you have
any idea of"
District Attorney Banton said that
not only alleged financial frauds in
Wal! Street but financial frauds in the
mercantile field as we'll were under
close scrutiny. and that, where JUST
fed by the facts, their investigation
would be pressed vigorously
An official of the Stock Exchange De.
c'ared yesterday that the authorities
of that institution stood ready to CO.
operate with the District Attorneys
office in any campaign waged to elimi-
nate the bucket shop. This Official
pointed out that the exchange fo,
years has been working diligently tc
that end and only recently had removed
its ticker serice from number Of non
member firms which had connections
, u ,,r,v, Hr, lN,