The New York herald., 1922-04-01
AMERICAN EXCHANGE |
HEADS INDICTED FOR
COTTON BUCKETING'
Secretary and Four Others
Accused of Allowing Fic-
= titiOus Trading.
SIX MEN SUPPLY BAIL
Disclosures Are Expected in
Bitter Internal Strife
Among Brokers.
PRISON CAN BE PENALTY
Thirty Brokerage Failures and
Fifty Indictments Fruit of
Crusade So Far.
PRISON CAN BE PENALTY


Thomas c. 4. Grain in General Ses-
sions yesterday indictments against
the American Cotton Exchange, it.
secretary. who also is director; four
other directors and one former di-
rector, charging them and the cx-
change with keeping, conducting OF
operating a bucket shop
A second indictment was returned
against two brokers as members of the
exchange, charging permitting and
inducing the bucketing of orders" The
individuals named are.
RANDOLPH ROSE, Sr., 622 West
Hath street, formerly vice. president
and director.
GEORGE w. PRATT. 6s West Sew
cnty-scventh street, secretary and
treasurer and director.
ANGELO. r.. JENNINGS, 372 Fair
mount avenue, Jersey City. director
MARTIN GOULkO, Ola Riverside
Drive. director.
EDWARD L. PATTON, Mountain
Lakes, Nj. director.
RAYMOND PALMER, S45 Union
street, Brooklyn, director.
The foregoing are indicted under the
general allegation that since January
1921, the practice Of bucketing orders,
or cross sales, has existed in the
American Cotton Exchange.
patton and Jenniuss arc indicted also
under a. separate Indictment, mailing the
specific allegation that cn October .,
1921. they entered into a contract for
the purchase OF 800 bales Of cotton on
the basis of the market at tnat time
without intending a bona fide purchase,
or. in other words. that they crossed
their orders.
Some Results of Exposures.
The Indictment of the American Cot
ton Excha nge Is the latest development
In the movement to shed light on prac-
tces in stock dealings. Since THE NEW
YORK HERALD published its first article
on bucket shops in New York. February
.. there have been these developments:
Thirty stock brokerage houses and
one cotton brokerage firm have gone
Approximately fifty individuals
have been indicted on charges or
bucketing or grand larceny rs re-
suit OF having buckcted customers
orders. Numerous complaints are yet
to be presented to the Grand Jury.
Two indicted stock brokers have
plesded guilty and charges against
others are being rushed to trial.
Hundreds OF complaints have been
filed with the District Attorney, out
OF which he expects bona fide cases
against at least so per cent. Of the
bankrupt brokers.
Nearly p dozen brokers have been
either suspended or expelled from the
Consolidated Stock Exchange and two
have been suspended from the New
York stock Exchange.
The indictments against the American
Cotton Exchange are under subdivision
g. section 800, OF the penal laws, which
relates to bucket shops.
The maximum penalty which may be
imposed upon the exchange as cor
poration, upon conviction, is a fine OF
5000 for each offense. Each individual
upon conviction, Is subject to maxi
mum fine OF $1,000, or maximum term
OF Imprisonment OF five years, or both.
All Of the indicted individuals ap-
psarcd with their counsel at the office
OF the District Attorney and were re-
leased in $1,000 bail each. They are or
dered to appear before Judge Otto A.
Rosalsky in General Sessions next Mon
day for arraignment.
nj Hau n s.xls
The formidable array of counsel which
accompanied the indicted cotton brokers
TO the District Attorneys office indl.
Gated a determination to put up hard
fight, and statement issued later by
a. w. Graham. president of the cx-
change, showed that the fight would
include an effort to turn tho tables upon
The witnesses who testified against the
brokers before the Grand Jury.
Mr.. Graham stated flatly his belief
that the charges we're the result of u-
terror motivcs that the exchange Off
cials knew what those motives we're,
and that no pains would be spared to
reveal the whole seethng background
Of anin1us upon which the defense al
legcs the fight against the exchange ID
established.
The counsel for the various defendants
are Albert Massey, for the exchange;
George Gordon Battle and Peter r..
Smith, for tho brokers: Frederick L.
Klein. for Pratt: Thomas r. Fielder and
William Chorosch. for Rose. and A. A.
Raphael, for Gouko.
Mr.. Grghar,'s statement. which was
telegraphed 10 leading newspapers of
the Southern States, where virtually all
Or the patronage of the American Cot
ton Exchange II located Is as follows:
After an investigation extending over
period OF ten days or the charges
against the American Cotton Exchange
and various Of its brokers the Grand
Jury returned bill OF indictment for
bucketlng against the exchange and six
Continued on PAGE Seven.
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