The New York herald., 1922-02-22

q furDeloWS or SuOStdnIlal anu Stapio
forwarded to the customer as evidence
of the purchase having been made
But what the customer Is not told
and does not know Is that at approx
imately the same time the bucket shop
bought his stock for him it sold a
similar number of shares of the same
stock through a dummy account, SO
that actually there was only techni-
cal purchase of stock and the bucket
shop actually holds no securities what
ever In view Of that circumstance the
customers money remains with the
bucket shop and the bucket shop is not
put to the necessity Of releasing that
money for the intended investment.
With the customer thus misled the
next step, as has been shown in nearly
every case going before the District
Attorney of New York county and as
has been illustrated again in the bank
ruptcy court, is for the bucket shop to
appropriate outright the money re-
ceived in good faith for investment or
speculation. Thus we see that the
basic swindle of the modern bucket
shop Is nothing more than coldblooded
larceny.
Almost the sole variation from that
instant vanishing of funds is the trick,
frequently used, of allowing a GUS
toner to appear to win small profits
and occasionally to draw them down
to induce him to plunge more heavily,
thus permitting the bucket shop OPP
orator to get control of a large amount
Of money before stealing it.
Braxen Larceny of 1900.
Now, bearing in mind the basic
swindle of the modern bucketeer and
stripping it of the convolutions i'm
posed by modern law. let us have a
look at New York bucket shop of
about 1900 as described in Mr. Hills
volume, and see whether, fundamen-
tally, the swindle to-day is not exactly
the same as then, despite the curbing
efforts Of lawmakers. Says Mr.. Hill:
Most of the bucket shops occasion
ally allow a customer who is known
to have money to make something, in
order to encourage him to blow 1t in
more freely. But bucket shop which
was overhauled in New York appeared
to have varied a little from the ordi-
nary methods of business This con-
Germ. according to the sworn testi-
mony of one Of the partners who
turned States evidence, simply took
all the money it could get and boldly
divided it among the members of the
firm and its agents. The following is
part of the testimony of the partner,
Troy. of Tobin. Troy & Co.:
1.-THE arrangement between us was
that David (the agent) was to have
half of all the money he brought into
the Office and that Tobin. Troy Sc Co.
were to have the other half
You mean half the profits, don't
your asked Magistrate Crane
No, sir; / mean half of the money. >
replied Troy.
"'Do you mean to say that If Davis
brought a customer to you who had
$4,000 he would get $4,000 and that
you and Tobin would get the other
s5,000?' asked the Magistrate, incred-
ulously.
That's exactly what I mean said
Troy. And what is more, that is ex-
actly what was done
"T should have thought said the
Magistrate, that the victims would
have discovered your game
1--WE simply gave them the toss,
said Troy. They had no way Of de-
tecting us. We never made a stock
transaction in such a case as Mrs.
Wheatons. We would wait until
~ ~ xx,1,n 4ta
were closed, and then make out dupli-
cate slips, both buying and selling.
and then the following day chose the
one that would cause our customer to
lose and destroy the other one. In
this way 1t did not take long to wipe
out any amount of margins
How was Mrs. wheaton's money
(s2,000) divided?
at got $500: Davis took 500; Tobin
got $500. and we spent the other s4oo
on the office, was the answer"
This was written twenty years ago,
yet it. would fit right into the middle
of any of this series OF articles on
modern bucket shops as snugly as If
it had happened yesterday.
Same scheme Used Now.
Apropos of the manner in which the
unfortunate Mrs. Wheaton seems to
have been dealt with by Messrs. Tobin
and Troy. ard that transactions par
allel in to-day's bucket shops. there
comes to mind an apt illustration
which the writer of this article saw
yesterday.
The exhibit consists OF two COM
munications from a certain New York
bucket shop to n customer. One of
the communications was call for
additional margin on 100 shares of a
certain stock. That communication
was in an envelope, on which APP
peared the post offico date stamp of
"7 =. NJ. Feb. a." The call stated
that the additional margin would have
to be in the hands of the broker by
10 A. M. February Is.
The second communication was a
notice that the customer had been
sold out because of lack OF margin.
The post Office date stamp on the en-
velope bearing that information read:
"12 r. NJ. Feb. H."
:. ~'her words the bucket shop had