The New York herald., 1922-03-15
HAND OF POLITICIANS
BEHIND BUCKETEERS
S. L. CromUeu Says Public Is
Often Careless.

Special Dispatch to THE New York HERALD
BOSTON, March 1.-Two principal
reasons why bucket shops and stock
swindlers have been able to operate
SO safely In the past are the ease with
which they obtain political influence and
Gilt-edgcd bank references, said Sey-
mour l.. Cromwell, president of the New
York Stock Exchange, here to-day in
an address before the members OF the
Boston Stock Exchange.
Mr.. Cromwell asserted that In some
OF the recent fragrant failures of bucket
shops, men who had held public Office
were partners or directors in the firms
involved. Some OF the most active de-
tenders OF the most offensive bucket
shops. he added, have been men in pub
lie life who have Sought through their
political and legal influence to prevent
the stock exchange from exercising its
powers to shut OFF quotations from
them"
Bank references, Mr.. Cromwell went
on. are not always conclusive evidence
either OF the character of a customer or
OF hrm. Some bucket shops in the
Street. no asserted, have been able to
obtain Tho finest kind OF bank refer
cnces. and prominent men have been
inveigied into giving introductions 70
practically chance acquaintances and
IN many eases these references have
been utilized to promote swindling In
the Street and out of it.
'tNo Substitute for Character.v
Another obstacle in the way OF SUD-
pressing irregular practices in the Street
II was said, Is the willingness of the
public to buy securities through ire
sponsible dealers. The licensing OF
brokers, he declared, will not meet the
~ Ex~
substitute for high character and stand
Ing In matters of credit and business.
Tho stock exchange, said Mr.. Crom-
well, has most rigid rules STIMULATING
conditions under which securities NAV
be listed, but the exchange car not in any
manner whatever regulate the prices
nj which purchases or sales shall bs
made. The rules of the New York Stock
, Exchange attempting to curb the evil OF
ioisting worthless securities on the pub
lie he characterized as ''ahead of the
laws OF the State and OF the nation"
The recent wholesale failure of broker
age houses engaged In bucleting prac-
tices was taken up by Mr.. Cromwell.
Against this practice. he said, the whole
force Of the New York Stock Exchange
effort has been exerted for many years.
"safeGuards Sometimes FafI.v
lt ~ the business or brokerage firm
10 accept legitimate accounts and 10 do
business for Its clients" said Mr.. Crom-
well. 1T Is the rule OF our members to
know the character OF men or firms for
which they deal, but from time to time
II has been revealed that despite the fact
that customers have been accepted on
what appeared TO be substantial refer
cnce, there have been disclosed i'm
little while facts which tended to show
sSst they were in some way connected
or related TO concerns doing an illegal
business and maybe to bucket shops.
What is, needed primarily is vigorous
enforcement Of existing laws. The pub
lie and all reputable dealers in sceur-
ties and all exchanges which are not
masking fraud under seeming respec-
liability should associate themselves with
officials who may now recognize their
duty IN cleaning up this condition. The
New York Stock Exchange will. as Il
has always in the past, cooperate to the
utmost