New-York tribune., 1922-10-18
State Prepares
TO Act Against
Bl1cketsllops
h
Newton Due Here To-day 10
Confer With Major Rich
on Immediate Enforce
naent of the Martin Law
Sweeping Power Provided
Two Complaints of Unfair
Practices in Brokerage
Received by The Tribune

Received by The Tribune
Charles D. Newton, State Attorney
General, Is expected in town to-day
for a conference with Frederick Il.
Rich, Special Deputy Attorney GEN
cral, at which time Major Rich will
lay before his superior the question
Of putting the Martin law into, i'm
mediate effect to stamp out the bucket
shop evil.
The Martin law gives the Attorney
general and his deputies power to
prosecute every person charged with
an indictable offense in the conduct of
stock brokerage houses and companies
that issue stocks, it was explained yes
terday. He may appear before any
court or grand jury. and exercise all
the powers. vested in the District At
torney. 1t also gives him the power
to put Investigations into the hands
of the grand jury without consulting
the District Attorney, and in such an
event, provides that the District At
torney ,"shall only exercise such pow
ers and perform such duties as are
required Of him by the Attorney Cen
eral or the Deputy Attorney General"
Brokers Books Open to State
One of the, most important provi-
sions of the law, it was announced
yesterday, is that which gives the state
authority to examine any brokers'
books if complaint is made against
him, and to put an end to his opera
tions by an injunction if an unlawful
state of affairs is found.
Two complaints have been received
by the Tribune in connection with
bucketshop exposures. One is from the
customer of concern that claimed to
be a member of the Cons solidated
Stock Exchange. A representative
tried to dynamite" s75 out of the
customer by promising immediate sale
Of some securities.
There was ready market for the
| stock at more than double the pur-
chase price, the customer was in
formed. The conversation developed a
| misunderstanding" as to the number
| OF shares held, the customer having
| bought and paid for only twenty-five
some months back, whereas the books
showed the customer held 100. Would
the customer send over $3.50 to take up
the other. seventy-fve shares and thus
put through the deal and make $500
| before the afternoon was over?
| The customer would not. A final
| agreement was made whereby the Gus
toner sent check for $75 by mes
senger, the, brokers' to put up the
other $75, and send the $500 over be-
fore s in the evening The $500 never
! came.
Payment Stopped on Check
The customer woke up in the night
with '""that guilty feeling" When
| morning came payment on the s75
check was stopped. Of course, the
brokers were indignant, for they had
tried to cash the check bright and
early. To all protests the customer
calmly replied:
"Send me the $500 and TIL send you
the s75," but the deal has never been
| consummated.
The other complaint SIS as to the
sort Of report made in regard to q
Consolidated firm that went into
bankruptcy last February, the com
plainant, creditor, asking why more
careful investigation of the character
of the bushes done should not be
made before a report was issued.
Both partners in this firm refused
to answer certain questions at the
bankruptcy examination "on the
ground that they would tend to in
crimlnate::" It was shown that an ac-
1 s,, <ha
relative of one partner, through which
| S250,000 passed without the relatives
knowledge, his only connection with it
having been to permit the use of his
name and to "sign q whole checkbook
full of checks" He also denied that
stock trading account on tho books
was actually his.
Agency Report Favorable
d. Of this concern the commercial
agency said:
| hey do only commission busi-
ness, and a good portion of 1t is said
to, begin stocks and bonds listed on the
New York Stock Exchange. They have
recently opened "a large office in
Chicago.
When they started their original
4 capital was $685. 900, most of it thei,
own money, some Of it from their rela-
tives. they are both married, are
comparatively young men, who have
the reputation of being quite success.
full in their several positions.
i 1T Is now stated that the firm capi.
tai account is about 100000, equally
i distributed, and their cash balance in
bankssis about s50,0O0Sto $60,000.'
This particular firm failed for $780,
4 Gsr.F r. D-sl Il ~ sss.s