The New York herald., 1922-02-27
Some Letter Writers Not
Victims but Wielders
of Spite Pens.
NEED FOR WILDCAT LAW
Grand Jury Is Making Rapid
Progress and Indictment of
Swindlers Is Near.

that have occurred within the last
week among brokerage concerns in
the financial district. The firms that
failed were of all sorts, large and
small, members Of exchanges and out
slders, companies against which COM
plant had been made to Mr.. Banton
and firms against which there had
list OF firms follows:
Kohlcr. Bremen & Co.. f.. Open
lneimer Kardos & Burke, s. 8. Euskay
& Co.. James W. Ball Rasmussen &
Co. Rodney & Co., Higgins & Dias
Retze & Sullivan, Heatley, Robles &
Smith, A. r. Smith & Co. and Thomas
IL. Cowley & Co..
The three very important firms in
ibis list are Kardos g. Burke, s. S.
Euskay & Co. and Thomas I ! Cowley
& Co. All had membership, in the
Consolidated Exchange factIthat has
caused comment. The wagnee failure
OF sc,cral weeks ago was the i, st fail
ure involving member of the New
York Stock Exchange, and even in the
District Attorneys office it is matter
OF comment that the Stock Exchange
houses have not Jared so we'll
In his statement Mr.. Banton said:
Some interested persons have sought
10 convey the impression that the re-.
cent failures in the financial district
are. in a mcasure. due to the activities
OF the District Attorneys office. This
propa ganda must not be allowed TO go
rnchsllenged The District Attorney has
not been and is not making an inves-
cation of Wall Street conditions. The
only activities of the District Attorney s
office arc such as arise from actual
complaints made TO the District At
torrey
should Have Bccn Suppressed.
1T is hardly correct to say that tho
investigation of complaints has been
responsible for the panicky feeling that
prevails in certain quarter Of Wall
Street That panicky feeling no doubt
Is arising from the great difference be-
tween assets and liabilities shown in
statements made by receivers Of con-
Germs that have gone into bankruptcy
The statements reveal that the assets
of the bankrupts are often less than so
per cent of their liabilities and that
these concerns should not have been
allowed to exist and continue business
in tho financial condition shown at
their failure.
mo honest brokerage house or up
right business man has anything to fear
from the District Attorneys office II
man is conducting a legitimate brok-
crage business he will receive the helr
OF the District ATTORNEY and not him
drance. AS I have explained on many
occasions. this office for some days has
been deiuged with complaints A grea.
many OF them on Investigation have
nroved Of no merit that Is to saw an
Investigation established that no crime
had been committed In cases Of this
kind not the slightest Inconvenience has
been caused to the brokerage house
and the names Of those complained
against have been kept secret.
The statements that the District
attorneys Office has been responsible
for some failures has already been
refuted by the Wall Street district
itself. through the presidents of the
New York Stock Exchange. the Con-
sofidated Stock Exchange, the Cotton
Exchange and the Curb Market These
exchanges have urged the District At
torney to be thorough IN this investiga-
tion and have pledged him all the
help that they can afford him
"One trouble with many Of these
concerns has been that when their GUS
toners called for the stock which they
had purchased or had deposited as
collateral the brokers did not have the
stock. In other words. the order had
been bucketed,' or the collateral sold
or hypothecated. In one case the Gus
TONER'S money and in the other his
stock was stolen. 'Bucketing' is a
polite word for stealing.
One Practice Is a Felony,
Another form of larceny practiced
by interruptions brokers Is that OF
trading against their customers orders,
The principles OF common honesty shou, d
have prevented this, for the relation
ship Of broker and customer is largely
fduciary The law OF New York for
bids this practice and makes IL felony.
mot only should laws be enacted at
this session of the Legislature which
VIII provide protection against the issue
of wildcat securities and for regis
tration and licensing of brols RS but the
law should go further and Give to the
, public frequent inspection or the records
~ or the business OF brokers and ex-
h.hanges, the same protection that now Is
orded to depositors in banks and
ajcrs Of insurance policies. Whether
N th,ss done by the Secretary OF State
-aefr,'Ver rev department DC created
90 s-'tter of detail"
-aay ythc last few days the assista nts
SIr Banton have been following the
ficy of taking Up only such complaints
are made In person. 1t Is very much
sier TO learn from talking TO persons
gnan from letters whether they have
frea grievances and are actually VIC
"A Tins or simply bad losers"
Tavulnerable indictments are being
sought In the bucketing cases. Jerome
Simmons. the Assistant District At
torney who has been In charge Of this
particular work, has resigned and prob
ably viii not try any OF the cases In
.,1fch indictments are found. Notu-
rally he desires TO have each case so
strong and SO we'll presented TO the
y Grand Jury that whoever tries the case
lster will have no trouble.
Evidence has been completed before
the Grand Jury in more than one case,
IL was learned yesterday. 1t would
appear probable, therefore, that there
may be developments to-day in the
neirhborhood Of the Criminal Courts
Building.