The New York herald., 1922-02-25

CHduce OL speculation. In OJner VIC
cially If the prospect appears not to
be inclined to taking a chance, to
make an investment" rather than a
speculation"
Bucketeer Hns Two Appeals.
Now the great handicap involved in
an outright purchase of stock rather
than marginal transaction is that
the latter requires only small per-
while the former involves complete
payment Of the full amount of the
face value. Therefore, the bucketeer
finds it much easier to persuade a
prospect to buy on margin than he
does to inveigle a man or woman into
paid up purchase. The money re-
quired is less and for that reason
easier to get.
In order to evade that difficulty we
find the bucketeer inventing the in
stallment purchasing plan. BY that
means, not only does the producer
have the advantage of a double appeal
that of speculation and permanent
investment-but also when he lands
his victim he gets more money.
On the face of it, that scheme would
appear to be one in which the buc-
keteer could hardly get away with the
customers money. The theory of the
plan is that on payment of the first
installment the stock ordered is bought
on margin, the difference between the
marginal payment and the full pur-
chase price being made up by loan
for which the purchased share is
pledged as security. Subsequent pay
ments are supposedly applied to the
reduction of the loan. When the loan
is fully paid up by the installments the
purchaser calls and receives the shares
he thus has bought.y
Approx chcd with Schemes.
But the slick tongued bucketeer is
not out to let money get away from
him in any such fashion. The in
stallment purchaser of stock has not
had his account long with the bucket
shop before he is informed of any one
or q number of attractive schemes
wherein 1t appears he has come in the
way Of making lot of money in a
hurry.
The stock he is buying has gone up
and 1t would be a good idea to sell
and take the profit. That looks rea-
sonable. The purchaser sells, makes a
profit, which is added to the INSTALL
ment beyond margin. But the buci
keteer has allowed the customer to
make the profit for a purpose. That
purpose is to infect the customer with
the virus Of making quick profits. He
has tried 1t once and found 1t could
be done. Moreover. he likes 1t. Hav-
ing thus started his erstwhile conser-
vative !nstallment plan investor on the
path of speculation the rest usually is
easy. Thousands of people in New
York can testify as to how easy IL
really is.
The victim now is persuaded to
leave his money with the bucketeer
for another investment or speculation
Sooner or later, sad to relate, the GUS
toner ceases to be lucky and the
whole of his credit is wiped out be-
cause he has no more money with
which to put up margin.
Stealings Pyramfded.
Another way In which this game is
worked is to keep dragging from the
victim the installments until the stock
though never really bought-is paid
for. Then the customer is persuaded
to put UP the supposedly paid-in-full
shares as collateral for a loan on
which to start buying more, the ad-
ditional shares, In turn, never being
bought either. Thus the scheme is
carried on endlessly as long as the
customer can be persuaded to pay in
stallmepts.
After that come the excuses, plaus-
ible enough, regarding why delivery
cannot be effected at once, and pres
emily the purchaser finds a sign on the
door where his broker" once did busi-
ness. It is bankruptcy. His broker
simply has fed between suns. or for
some reason, not disclosed to the Gus
toner, his brokers'" business has
been transferred to another house.
The customer usually then is as
founded beyond measure to find the
record Of his affairs, as transferred to
the new house. is entirely different
from what their status was in the old
concern. Frequently he finds that ac-
cording to the new books he Is owing
much more money than all his paid up
stock is worth. He cannot find his old
broker" and endless litigation makes
recovery a more or less futile under
taking.
Two signs OF warning.
OF course, the first question a person
considering buying stock on the in
stallment plan naturally asks Is. How
am I going TO know whether am buy
What I Think OF the Girl with the lip
stick.--E. Phillips Oppe0heim. Sunday In The
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