Macon beacon. [volume] (Macon, Miss.) 1859-1995, 1922-01-27
MEN AND BUSINESS

Rain was pouring through many leaks
in the roof.
why don't you mend your roof"
the peon was asked,
Cant now; raining too hard" he
answered.
But why didn't you mend it before
the rainy season.
No use then; it wasn't raining,
he replied.
What essential difference is there
between the attitude of the Mexican
peon toward the leak in his roof and
that of the American people toward
leaks in our financial methods?
Leading bankers of the Middle
West declare the greatest swindle ever
perpetrated on the people of this
country was that of a few years ago
when a horde of tget-rich-quick"
operators spread out yer the Middle
West selling to ag~riculturists oil stock
in companies that never produced oil,
packing house shares in concerns
that never packed meat, stock in
photograph corporations that v
made monographs, land speculations,
etc. 1t is estimated the farmers were
robbed of $4,000, 000, 900, The estimate
might seem high but for the fact that
it comes from those best qualified to
know the magnitude of the robbery. y
If the farmers had two billions to-
day with which to buy tractors fer
tilizers, build silos, purchase agrlcul-
tural implements, clothes and no end
of furnishings and supplies they need
it would be to their advantage and
a great aid to general industry. BY
reason of that robbery the farmers
buying power is impaired. The
plundering of the farmer affects every
branch of American business, yet
while it was under way little atten-
ton was given to it.
Recently there have been failures
of various so-called brokerage houses.
A better term to apply to most OF
them would be bucket shops. 1t would
not be surprising if others closed their
doors. !,
There is little reason why a stock
brokerage house honestly and prop
erlv conducted should fail. The busi-
ness is as safe and sound as any
business can be. The function of the
broker is to buy or sell for cash OF
on margin such securities as ordered
bv the customer. The broker runs
little or no risk. His commission Is
established by the rules of the eX'
charge.
If the customer is purchasing out
right, he pays in full IN advance
Jf he is operating on margin he mus
denosit a sum deemed sufficient u
cover the widest f%luctuation of tn
market. Ii the market goes agalns
the Spectator, the broker may de
mand further margin, and, If 1t is no
forthcoming, close the account. 70
the difference between the sum pu
up as margin and the market value 0
a security purchased the buyer
charged interest at the ruling rate
There is a clearance between a.
legitimate brokerage bouses daily
and every establishment settles II
obligations with every other estao
lishment. :,
, The costs of conducting a broker
; age business are large and the con
:. missions moderate. The principal eS
changes exercise rigid strutlny owe
members, %suspending or expelllnI
them for questionable practices. Var
ious of the smaller exchanges are nc
so careful. To many persons all eS
changes look alike. This latter tas
:. gives opportunity to the dishonest brok
err to bucket orders that is charge Tn
: commission but not buy or sell tn
security. In fact he bets against tn
: customer, and when he does SO charge
for service not performed, and ais
, charges interest on the difference Dc
: tween the customers money deposlte
, : as margin and the quoted price
: value of the security, although he hs
:, not purchased the security. he swif
, dies the customer in both cases an
not infreouently adds to this by falls
. flying quotations.
= Against the broker who buckets
= orders the market player has a heav
! handicap, but occasionally luck seem
to be with him, but not infrequentl
when he has big paper profits tt
b~ro'~o~ "hlovs up.
This whole country is speckled wit
a hrcl.o+ shops. Some concerns hay
! branches in a dozen or more cite
: 1t may seem because of the receI
+ failures that the losses of the pull
! lie are unusually heavy. 1t is pr'
lkble that the los SEES are create
when there are no failures.
There was a time when bucket shor
were drab and mean looking. To-da
! they are, as a rule handsomely flu
{ rished and with every sign of distin'
{ ton. But however they are gilde'
the game is to swindle the public.
, Bankers, if they refused to hay
any dealings with any brokerage cor
: Germs of questionable character, woul
! make it difficult if not impossible
!, for them to flourish. Some buckle
! shop men, branded as such by stoc
: exchanges, have had their account
= with banks of the highest respects
: bility. -,
: When will the banks repair tn
. leaks in the roof Richard Spillar