New-York tribune., 1922-02-27
NewBucketshop
Indictments
Expected Soon
Several Cases in Addition
to Nineteen Already Re-
turned Probably Will
lie Reported This Week
81 Under Investigation
Banton Insist Is That Honest,
Brokers Are Safe; Office
Did Not Cause Failures

Several indictments in addition to
the nineteen that already have bsen
presented IN connection with the Dis
trlct Attorneys campaign against
oucketehops are expected to hc handed
down by the grand jury this week. it
was learned yesterday. Many Of the
thlrty-four firms now under inve,tira-
tion by the District Attorneys Office
are said to be involved
District Attorney Banton made an
sV'er yesterday to statements that re-
cont failures in the financial district
were due 70 his campaign Asserting
that this propaganda must not be al
lowed to SO unchsllenged," Mr.. Banton
added that il WAS hardly correct to ssv
that the investigation had been respon-
sibie for "the pancky feeling that pre-
walls in certain quarter Of Wall
Street"
The District Attorney declared he wa.
not making an investigation of Wall
Street conditions, but was only acting
on the complaints received by his office
alleging irregular stock transactions.
The 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 bnnkruptcv.'
said Mr.. Banton. Tho statements re-
veal that the assets Of the bankrunts
are often less than so per cent Of their
liabilities, and that these concerns
Shoulo not have been allowed to exist
and continue business In the financial
CONDITION shown at their failure.
Honest Concerns Safe
NO honest brokerage house or m
night business man has anything to fear
from the District Attorneys Office. II
man is conducting legitimate brok-
erage business he will receive the helm
of the District Attorney and not him
drance. AS | have explained on many
occasions, this Office for some davs has
been deluged with complaints A great
many OF them on investigation have
proved 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 compliance d
against have been kept secret.
The statement that the District At
torney's Office has been responsible for
some failures already has been rcfuted
by the Wall Street district itself
through the pres dents Of the New York
Stock Exchange, the Consolidated ID
Stock Exchange, the New York Cot
ton Exchange and the Curb Market
These exchanges have urged the lis
trict Attorney to be Thorough in this
investigation and have pledged him all
the help that they can afford
"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 col
lateral 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.
Forbidden By New York Law
"Another form Of larceny practic. d
trading against their customers or
ders. The principles of common hon
esty should have prevented this, for
the relationship of broker and Gus
toner is largely hduciary. The law OF
New York iorbids this practice and
makes it felony.
Not only should laws be enacted at
this session Of the Legislature which will
provide protection against the issuance
Of wildcat securities and for reg
istration and licensing of brokers, but
the law should go further and give to
the public frequent inspection of the
records of the business of brokers and
exchanges-the same protection that
now is accorded to depositors in banks
and holders OF insurance policic.
Whether this is done by the Secretary
Of State or whether new department
be created is a matter of detail"