Yorkville enquirer. [volume] (Yorkville, S.C.) 1855-2006, 1922-01-27
dence of bucket shop methods. and
fraudulent operations.

Oence OF DuckeI SnOp lnetHOuS, ant
fraudulent operations.
Yesterday an old and we'll known A.
I.ancial house ran its head against the
stone wall; today another. And so Il
will continue until Wall Street au'
thorities say, all of these fakirs will
have been forced to end their mali
cious practices.
Taking advantage of this condition
campaign is being launched by a
ring of legitimate bankers and brokers
backed by the New York stock ex-
change, the American Association and
the New York Bankers Association to
blot out this cancer in the financial
system of the country.
An investigation of Wall Street
which will throw every house under
the scrutiny of legitimate financial
wizards, will be started in the imme-
diate future. Steps will be taken to
force those regarded with suspicion to
close their doors.
The method of the bucket shops are
varied and interesting. The story Of
their activities as told me by the H.
nancial expert today disclosed adven-
lures with other peoples money as ro-
mantle as fiction. He sud:
"a bucket shop is financial house
which conducts fictitious business In
securing securities, stocks or bonds
which are seldom purcl ased, on orders
from a client. The fake broker merely
makes bookkeeping entry to that ef-
feet. Wnen this entry shows the GUS
toner's money has bean lost, accord
ing to market quotations. the client is
notified to put up moro for margin or
is wiped out.
Professional bucket shoppers cal
culate that investors wilIs usually lose
their original deposits in from six to
nine months. If this does not occur
the broker advises the client to sell out
and take his money somewhere else.
If he can't get it quick he doesn't want
1t.
'In an advancing market, such as
now exists, the bucket shops have a
hard battle as the public is usually on
the long side of the market. Unless
clients can be induced to over-specu-
late there is but cne expedient for the
broker. That is bankruptcy. ,
"a bucket shop is seldom connected
with the New York stock exchange. TO
buy stocks listed on the exchange the
bucketeer has to give an order to en-
exchange member. This means that
nc sacrifices all commissions on the
deal. Therefore, as an inducement to
the public a per cent on debit balances
growing out of the marginal purchases
no matter how high the call money
rate goes. They are able to do this be-
cause the customer has never held any
stock or he'd debit balance.
"They also usually inform investors
they have no securities for sale, being
merely in business to buy or sell Sc
ourities for investors. Most of these
firms, however, at one time or another,
float fake mining or oil shares.
Zone good indication that O broker
age firm is a bucketshop is the refusal
of the stock exchange to grant per-
nit for a stock ticker. When IL brok-
erage firm wants stock ticker appli-
cation must be made to the quotation
committee Of the exchange. IT they
show clean bill of financial health
and are considered above suspicion,
they are granted permission to use
ticker. Otherwise they are refused,
and a refusal generally means that
something is wrong somewhere.
Where house is granted a ticker
ard the exchange later learns business
is not being conducted OH the level, the
machine is ripped out without delay
Some bucket shops have policy OF
buying about oEe-third of the cecurl-;
ties expected by customers. This is
dcre for protection in case of an un-
expected visit by the authorities. In
case securities, they are supposed 10
be holding for clients, are demanded,
they can, in this way, show parts OF
them and claim the remainder have
been placed as collateral on loars.'