The New York herald., 1922-02-17
Continued from FIRST Page.


pecteG to reveal more OF this sort o
thing.
Youngsters started With $4,000.
But Il liz not necessary to wait 70
those revelations Let us have a looI
at a transcript of the examination Il
the Bankruptcy case OF Daniels & Co
formerly OF 80 Broad street. whicl
failed last November 20 with $4,000
liabilities and $4,000 more or les
problematical assets, after nineteel
months OF operation.
Here were a couple OF youngsters
William Kclfnan and Harold Daniels
or Stravitz, as his real name was
who put up about $1,000 each an
opened bucket shop. kelman la
worked little In the financial district
and Daniels was In the film business
Still these young men--both under 3
soon became able to pay $4,000 an
$1,000 salaries to producers; pai
themselves salaries OF 5000 a week
and opened branches--one at 201 Yves
Twenty-third street, another at Phila
delphia, another at Pittsburgh and
fourth at Shamokin, Pa.
The following extract from the testi
mony OF Daniels shows the irresponsi
bility Of this outfit:
c. Is that (Daniels> your genuine
name? A. No, 1t Is not.
Q. 1t is rot? A. 1t Is right now. It
has been changed lately.
G. IT has been changed legally?
A. Yes sir.
@. Through an order OF the court?
A. Yes SIR.
Q. How long ago? A. In the latter
part Of 1890 .y
Q. What was your name origin
ally? A. Stravitz.
Changed Name for Business.
@. What prompted you to. change
your name about two years ago?
A. Just for business reasons.
q. What business were you in
then? A. My older brother happened
to be using the name Daniels for tho
past ten years. l though it was an
appropriate name for business and
changed it.
u. Wnat business were you IN
then? A. Motion picture business.
Q. When did you go into the COM
mission brokerage business? a. Two
years ago.
Q. When? A. At the time we
started.
Q. When was that?, A. May, 1920.
Q. Had you ever been in that BUSH
less before? A. No.
q. Had your partner ever been in
Ii before? a. Yes, sir.
q. How much did you contribute to
the capital of the firm? A. don't
remember offhand.
@. Give us an idea? A. / believe
the books win show that.
@. Kindly answer my question? A.,
say haven't any Idea right now.
Mr.. Emil (Daniels's lawyer)-Give
him an approximation? A. Oh, about
$500.
Q. How much did your partner
contribute? a. approximately the
Same.
Q. Were there any other members
OF the firm at that time. A. No.
@. Now did you gentlemen have
seats on any exchange? a. No.
@. You never had? A. No. sy
O. How did you do your business?
A. Through other houses. Through
members of the Exchange
q. Just describe the general cor
duct Of your business; which way
was it operated? A. didn't man
age the business. therefore / can't
tell you. had employees For that
purpose.
@. Well what general course OF
conduct did you lay down for your
employees? A. They were men hired
with experience. They were OF long
experience. They conducted the busi-
ness. ~
@. What did YOU instruct them to
90? a. I didn't give any instruc-
tons. 1 paid them salary for their
knowledge.
Another illustration of the fact tina.
no responsibility is required of person.
entering the brokerage business is thu
from the District Attor.
ney's office that another concern un.
der investigation started out withou,
any capital whatsoever. They actually
spotted two victims before they openet
their Offices: heeced them, md USED
the money thus obtained to set up ar
establishment to continue their swim
ding operations.
Stock Holding Law fsvaded.
There is to i,o taken into considera.
ton also the fact that tl-e present law
Is entirely Inadequate to enforce the
bona 'fide purchasing and holding OF
stock by brokers for customers. The
bucket shop purchases the stock
makes the transaction OF record. but
instead of holding the stock, as the
customer believes. Immediately sells
1t again, thus committing the cnm-
nonest offense of the bucket shop.
The District Attorney and other au-
thorities virtually are powerless to
trace such transactions without auto
granting immunity to the
guilty persons. The Martin law, oi
last years enactment, which is ad-
under the State Attorney
General, contains clause specifically
providing that seizure and cxamina-
ton OF books and records shall not be
gf'ound for immunity. The faith oi
prosecuting authorities in that law Is
Indicated by the fact that it never has
been exercised sufficiently to bring
that clause 10 a test OF constitution
ality.
About the best the District Attor-
ney can do is to wait for complaints
and then prosecute. But, just as Is
the circumstance when bankruptcy
begin. IL is too late to
save the money OF the victims when
tho rrinnc ic diqcovorad