Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1922-02-16
LET THE RICH FOOLS
FEED THE PROMOTERS
The Wise Men Of Moderate Means viii
Not Risk Their Money on Get.
Rich Quick Schemes

f1NllE first impulse of many persons will be
l. to demand that law be passed which
will make such swindcs impossible when
they read Attorney General Daugherty's
statement that within five or six years
stock swindcrs who have mulcted the public
out Of 10000. 900 have been arraigned in
the United States courts.
1t might as well be admitted. however,
that no law would accomplish this end save
one which would cut out OF the hearts of
men the desire to get rich quick. No way
has yet been found to protect men from the
consequences Of their folly. Ponzi raked in
millions In Boston by promising enormous
returns on an investment. SO long rs the
money kept coming in he could make good
his promise by paying out to the early In
vestors the money contributed by the late,
ones. ... .....
The Ponz game has recently been played
in Chicago by three men, who have collected
S7,OOO,O00 from the savings of workingmen
on the promise of rich returns. Their en-.
terprise, like that Of Ponzi, was an elab-
crate system of pocket picking. and It was
easy because of the Irrepressibility OF human
gullibleness.
The cases in the Federal courts to which
the Attorney General has referred are OF
different kind. Promoters have offered for
sale shares of stock in oil and land COM
panies with no assets save a prospectus.
They have sold their shares to clcrgymen.
school teachers, farmers and little business
men who have made no inquiries about the
value OF the property. The investors have
been dazzled by the biz figures in the
prospectuses and by the story Of successful
oil and mining companies which had n small
beginning but made great fortunes for those
who got In on the prouOd floor when tho
companies were organized.
These deluded people need not have lost
their money if they had taken the advice of
experienced investors. Such advice can be
had for the asking. The banks are always
glad to give it and they will always cau-
tion the person with small means against
specializing
Yet there is a feeling that the States
ought TO pass laws which will forbid the
capitalization Of the blue sky, as the phrase
goes, and the offer Of the shares to the in
nocent and unsuspecting investors. Attor.
ney General Daugherty saws that If such
laws were passed and rigidly enforced the
fleeing of the public could be prevented.
He is unduly optimistic. Such laws would
help. but they would not prevent a fool from
parting with his money to the first man
with plausible story who asked for it.
An informal meeting Of brokers already
has been held to consider the situation in
one Of Its phases. They are directing their
attention to the bucket shops. Now
bucket shop is seemingly brokers' office.
It has all the pnraphcrnalia of such an
office. but II does not deal in stocks and
bonds, save as q side issue. Its main bust
ness is placing bets on the rise or fall of
the market. The customer does not buy
anything and the broker does not deliver
anything. The customer in effect bets that
a certain security will go up and the broker
bets that 1t will not. The bets nre settled
according to the record Of quotations at the
time agreed upon. This business is illegal
in some States. No member of the stock
exchange is allowed to engage in it. If
he is found guilty he is punished.
1t Is said that there are $50 of these
establishments on one street in this city,
and that on one square Of street near the
stock exchange there are fifteen of them.
They are nm excrescence on the legitimate
brokerage business. They are a constant
temptation to do llegitmate business. And
they are used to float phony securities.
They can be suppressed II the legitimate
brokers combine to drive them out of town,
even il there should be no law in this State
Against the kind of business they carry on.
The stock gambler needs no sympathy.
He can look out for himself. The sophisti-
Gated investor knows enough to beware Of
promoters Of wildcat companies and ex-
ploiters of untried inventions. And the
plain citizen with few hundred or few
thousand dollars to invest should be wise
enough to put his money in Government
bonds or the securities Of corporations with
record Of successful operation. and let
the shyster promoters feed on the rich fools
who have money to lose