The New York herald., 1922-02-14
THOUSANDS ARE SWINDLED
BY BUCKET SHOPS HERE

under the Martin law, the case of
| New York concern whose speciality,
according to the committees report. is
that of investing the savings of for
eigners in a certain stock.
The stock is sold on the installment
plan for payments as small as SIS down
and So a week The continued pay
ment of installments is guaranteed
through persuading or bulldozing the
depositors to take their savings ac-
count books to the stock selling outfit
and make over the deposits to that
concern.
The principal complaint against this
concern, so far, is not so much the
worthlessness of the Stockton that
| has not been determined-as the high
pressure craftsmanship methods used.
| Observe:
The company's activities came TO
the attention of the authorities
through an italian barber at one of
the largest and most fashionable ho-
tells in the city. One of the statesmen
of the concern made habit of going
into the barber shop of this hotel and
patronizing this same barber on each
visit, always rewarding him with
liberal tip. He finally conveyed to
the barber that he was able to be
liberal because he made a great deal
of money, and the barber was sur
prised to learn that it was possible for
even a barber to make money the
same way.
The barber confided to the salesman
that he had saved up $3.50 to transport
his wife TO America. 1t was explained
TO the barber that If he bought $500
worth of stock-S250 down and the
rest by instaiment-the stock would
be worth $4,000 within year.
Persuadng the barber 10 part with
his savings account included an invi-
| tation of tire barber to the home of
! the president of the company last
Christmas, when he was wined and
dined quite literally. That turned the
trick. But it was designed to do
good deal more than that. This bar
ber, being connected with one of the
| big hotels, a good dresser and intelli-
gent. was in position of valuable
prestige among his Italian friends,
and capitalization of that prestige
was the real purpose of the lavish
entertainment.
When the barber became uneasy
and asked for his money back he was
told he was foolish to think of such
thing, whereas if he put it back in a
savings bank it would earn only per
cent. at the most. But being unable
to get the principle or the 36 per cent.
the barber created sufficient of a STIR
to start the present investigation. No
action has been taken in the case so
! far.
Statesmen Taught I'm School.
| 1t might be of interest to record that
! this concern-and it is not an uncom-
| mon thing for a bucket shop-main-
tains school at which it's statesmen
learn the fine art of finding savings
depositor and talking him out of the
deposit.
other tricks by which the bucket shop
takes the money away from a savings
depositor.
What is not so generally known
probably is that some bucket shops,
being short on ready savings deposit
tors to fleece, create their own saw
lngs ldepositors. Many legitimate
brokerage houses. eof course, encour-
age the purchase of stock on the in.
stallment plan, which is thoroughly
legitimate practice, providing the stock
is legitimate and gives full value to
the purchaser
The bucket shop in creating it's own
savings depositors, pursues about the
same methods as the legitimate house,
except that its promises are rather
more colorful. until the purchaser has
built up an equity worth the consider
alton of the bucketeer. Then comes the
suggestion that purchasing stock in
such fashion is slow and laborious
means of making money. when a great
deal of money might be made through
speculation. Thereupon the INSTALL
ment purchaser is persuaded to turn
his payments already, made into
margin account for speculation. The
story of what happens then las been
told already too often in this carries of
articles to be repeated.
The next article. on the bucket
shop evil will appear tomorrow.