Evening star., 1922-03-15
SAY COTTON MART
|. IS BUCKET SHOP
Brokers Testify New York
! Exchange Openly Exploit
! ed Southern Traders.
RI the Assoc!at ted Pre4s.

Hr the Assoc!a ted Press.
NEW YORK, March 1J.--Charges
that the American Cotton Exchange
Is huge bucket shop. where actuai
Grading is rare and where the south
ern speculator is at the mercy OF the
New York broker. were made by for
s'John Doe" investigation conducted
by the district attorneys office before
Ehiet City Magistrate McAdoo.
{ Witnesses testified to numerous In
stances OF cross trading" fictitious
orders, dummy accounts, "scalpinS
secret manipulation OF unrecorded
transactions, sensational Advertising
designed to WOO the accounts OF small
speculators in the south and unois-
guised bucketins OF orders.
Expelled Members Testify.
! w b, Wilson and J. II. Watson.
members of the firm OF Wilson & Co..
Nhch was expelled from the ex-
change last February :s on charges
that they had warned their clients
stitution. were. principal witnesses
for the prosecution.
when there was cotton for Gale in
the ring ~e made bona fde sales Tor
our clients. MIR. Wilson testified.
-Rut the southerner. who is an op-
most invariably bought. As a result
there seldom was any cotton for sale
and brokers simply .bucketed' the or
aers. taking a chance on r,ei,s: covering
themselves when cotton eventually
was offered In the ring
Orders Bucketed Outright.
The witness declared that he with
LA rhn q Ar e
ed complaints to officials that ut had
become absolutely impossible to trans
act business without bucketinE. At
the time of his resignation in Febru-
AIRY. he declared. conditions were such
that little trading was done on the
door of the exchange. most OF the
orders from customers being bucket
cd outright.
! A score Of the most prominent mem.
bers of the exchange. some OF them
tuting the "inner circle" Of the trad
ing ring.
81 II. Watson. partner In Wilson &
Co. testified he first entered the moor
OF the exchange as "scalper for
u. l.. Du;ton & Co. with instructions
trading was INDUCED in.
I Finally they caught me short OF
the market and then took the market
for a walk. not bringing II back Tor
He then ceased "scalping" for Dut-
ton and became a member of the tx-
change. "bucketing" orders On his
own account.
Admits Bucketinx Orders.
<"Do you say you bucketed orders.
them" asked Magistrate McAdoo.
who Is sitting as q grand Jury ip the
Investigation.
. call it what you want the wit
ness replied. 1T Is just plain bucket
"During the big rush last Septem-
Der, when every soItherner was
speculating in cotton and we were
flooded with buying orders. brokers
seldom went to the exchange to do
their trading. they didn't have time.
They simply marked prices on the
sales contracts, sent them. out for
the signature of the broker with
whom they had prearranged to COM
plete the transaction OF fictitious
sale. and entered it on their books.
Everybody was bucketing.
Z Several gilt-embossed pamphlets.
distributed through the south by
New York brokers', were introduced
as evidence.
Pamphlets as Lure.
"These should be called to the at
Magistrate McAdoo told the prosecut-
ing attorneys.
: The pamphlets were entitled:
rSoutherners Not Slow-A Human
Interest story That Every Red-blood-
ed Southerner Should Know" How
Srains@sy nsaoe IN Randolph ipR' Rose" % and and
:Methods of Successful Cotton
Traders"
J Mr. Rose was cited by each Of the
Witnesses as q member of the big
Sest firm connected with the Amor
rN<t ho nd
bucketshop methods.
. Efforts of counsel for the American
Cotton Exchange were baked In
their attempts to cross-examihe wit.
lesses by Magistrate McAdoo.
: :,