Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1922-02-11
j., W. SPARKS
On Protection Of Investors

On Protection OF investors
TVIIE elimination Of the dealers in worth
i. less securities is one of the greatest
financial problems of the present day. to the
solution Of which the best efforts OF those
agencies most interested should be made:
according to J. w. Sparks head OF one OF
the largest brokerage houses OF Phlladel-
phia.
1.-THE sale of worthless securities" said
Mr.. Sparks. "is one of the most formidable
menaccs of the public today. The amount
Of money secured in this manner annually Is
large. and it is a business which should be
wiped out by those agencies most directly
affected. and who are best able, to do it.
''These agencies are the banks and trust
companies. the newspapers. the stock ex-
change, the telephone companies, the owners
of the properties in which this business is
transacted and the law. If these interests
would combine the evil could be eliminated
in short time.
''The banks and trust companies could
aid by refusing to handle the accounts of
persons whom they suspected Of being i'm
plicated In this kind of business, the news
papers by exposing it wherever it occurs,
and the stock exchange by placing any in
formation which it might obtain in the
hands Of the papers. The telephone COM
panics play an important IT unconscious
part in this business, for most of the solici-
tation is now done over the phone, and l
have heard that certain of these houses have
directory for prospective customers. Then
again, the phone gives quicker results and
there is no documentary evidence in the
matter as Is the case with letter or cir
cular.
Landlords Could Help
The property owners could do their part
by refusing permission to such tenants to
remain in their buildings and the law would
play its natural role In quick and thorough
prosecutions If these several agencies could
and would unite in an effort to wipe out this
business, the market in worthless securities
would suffer fatal slump in very short
time.
that this dealing in worthless stocks and
bonds is done by persons who are not mem
bers of the stock exchange and over whose
actions the exchange has no jurisdicton
but large percentage OF the public is not
acquainted with the facts in these cases. and
in the minds OF large number of persons
the exchange Is unjustly held responsible for
transa actions for which it is not only not
responsible, but which 1t would gladly end
forever II it could be DONE
"Anothcr element which enters largely
into the sale of worthless securities Is the
Ignorance of the public as to the stocks and
bonds which they purchase. a great many
persons buy first and investigate afterward,
when it is too late and when their money
has gone. Many persons will take the un-
supported word OF man who calls them up
on the telephone and recommends certain
stocks as good, and will place an order TO
buy them without any further effort on their
part.
1.-THE remedy for this is to consult n bank
or a trust company or brokerage firm in
which absolute confidence may be placed.
This is Just as effective a remedy for these
conditions as it is possible to get. and it lies
in the hands of the public itself But the
history Of the worthless securities market
ho< hpv " -
ple continue to buy securities without tbc
as they do this there will be worthless ones
sold 1t is difficult, indeed, to protect Deo.
ple against their own incinations and
actions.
Bucket. Shop Evil
EVERY stock exchange has waged war for
wears on the bucket shops in their own
cities, but the evil is stil with us. philo.
dclphia is particularly bad in this resnoct
and the bucket shops appear to honriob
here to an unusual degree. a new devico
has come into existence among this class ~
dealers A sale of stock will be made 70
customer and the stock actually purcbasaJ
Then it will be Immediately sold nv so,,n
one, generally member Of the buckct J','o S,nr
firm. trading under another name. '"'p
Son the face OF 1t the transaction ,oo,.s
perfectly legitimate, but It, is buckotiun.' n'
just the same, because the stock is nams, s,
delivered to the customer who maid ,or ~
But the apparent legitimacy Of IL. ~. ~ ~
action makes It ditacuN 10 des, CItk
eAuss. Y the method dsss not actusiIv .on. wc.