The New York herald., 1922-02-10

ference, between the actual value Oh I
a bank will lend on that security. Ii
will lend $50 on 1t, the margin Is 81
outright by the broker for his client'sg
account, the money being lent for
the borrowing value of the security.
When tho value of the stock de-
creases on the market, of course, the
margin becomes larger and the lender
of the money would demand more
margin money for his own protection.
On rise in the market the buyer on
margin would win through his mar
gin being reduced.
Stock Now Has to he Bought.
In the big bucket shop epidemics Of
other years nc bucket shop ever
thought for one minute of actually
going through the red tape of. buying
securities thus ordered. The margin
was placed and gambled on, and some
bucketeers were not averse to paying
light losses on legitimate turn of the
market, though usually it was his
client who got stuck. And back
room or any old place would do for
the business, which was frankly a
gambling house. 1t had some element
Of sportsmanship about it--some-
times.
But the bucket shop Of to-day, due
TO laws and restrictions which have
been thrown around it and to the ad-
vantages of pomp and show. Is no
more the bucket shop of a decade ago
than the 1922 model automobile is to
the one horse shay. 1t is highly tech
nical business, frequently employing
thousands Of persons in elaborate
offices and with telephone systems
whose bills would have looked like a
fortune to the old time bucketeer. The
modern operator must have a good
technical knowledge of finance and
legal restrictions to do business.
And so, when law was passed
making 1t felony for the bucketeers
to neglect the minor detail of buying
the stock for their clients did they
throw up their hands and go out of
business? They did not. They inn
mediately devised the scheme of buy
ing the stock to put the transaction
on record and turning right around
and selling 1t again.
Links with Exchange Members.
Not only does the bucketeer buy the
stock as ordered, but through connec-
tions he has built up with members OF
the big exchanges he is able to send
ON to mis- intended victim a bona fide,
confirmation of the execution of his
order right on the floor of the ex-
change. The sale of a similar amount
of stock takes place Immediately. un-
less the bucketeer sees an opportunity
to gamble with his victims purchase
and make n profit for himself but the
record of the sale is of a separate
transaction, and nine times out of ten
the strictest examination into the or
iginal purchase would not reveal the
fraud that has been committed.
In fact, that revelation comes only
when the purchaser of the stock be-
comes uneasy and demands either the
stock or his money. Then comes from
the bucketeers an endless string of ex-
plantations as to why the stock cannot
be delivered. or of how II the money
is left a little longer. the customer will
make a fortune, and in an astonishing
number of cases the bucketeer is able
to get away with it. II demands are
too insistent. the bucketeer will pay
to keep the complainant quiet.
But finally comes the day when there
arc too many demands to be met or
some victim becomes too suspicious,
and the District Attorney and bank
ruptcy court take charge. Then. the
victim learns for the first time. that
he cannot get his stock because the
stock was never for more than an hour
in the possession OF his "brolSer"-for
all along he has not dreamed he is not
dealing with legitimate broker-and
that he cannot get his money back. for
the reason that the bucketeer never
had any intention that he should get
Il back.
The District Attorneys office and
the bankruptcy courts hear that story
over and over again.
An elderly woman sat in the Office of
James j. Wilson. Assistant District
Attorney. yesterday afternoon and
told OF how a slick tongued young
man who had got into her confidence
and that of her husband because he
said he "came from the same part of
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