Evening star., 1923-07-31
BY r.. n. TREVOR.
q ,arefuI about tine mails."


stantly heard in conversation ih
bogus securities circles ever since the
time of the vigorous crusade by the
post Office authorities against crook
ed promoters In the reform wave of
1908-l911, which sent so many crook
ed promoters to federal prisons for
long terms.
What has particularly impressed
the criminal element, SO far as fed
eral prosecution was concerned. is
the, determined manner in which the
federal authorities keep on the job
once they start a prosecution. 1t is
entirely different from the lacka-
daisical manner in which state prose-
cutions are too often conducted. The
wholesome fear which was thrown
into the criminal element, lasting for
years after the big raids made by the
government during the reform wave
of 190S1911, seems in fact to speak
volumes in support of the theory ad-
vanCed by some criminologists that ii
Is not so much punishment which de-
ters. crime as it is the certainty Of
punishment.
Afraid to use the mails in soliciting
business. and shut cut from news
of those stock promoters who special
ICED in selling stocks for which there
was no trading market found that
the only way left for them to do
business was through direct solicita-
tion of a prospect" by statesmen.
Tkey had developed fair-sized organ
iZations for such work by the time of
the war shares boom of 1915-1916.
Chnncc to Entice Buyers.
AS the news of big profits by some
people in the stock market in the war
shares boom spread through the
country these organizations saw a
splendid chance to entice buyers into
their own stocks. Naturally. they
had to make misrepresentation re-
garding opportunity for prohts for
the buyer in their stocks marketwise
The prospect would be informed
that the sponsors for the stock had
the intention OF starting market
for the issue later and that they mad
every expectation that in the trading
market the stock would sell at prices
much beyond those which the sales
men were then asking.
There We're few OF these cases in
which the promoters had any intep-
tion of eventually establishing d
trading market.
In order to reach a great number
of prospects through the methods of
personal solicitation" 1T became nee
essary for the sales organizations to
increase the number of their sales
men. So many statesmen were wanted
that il was necessary to train new
men. The sales organizations es-
tabliShed schools that were a classic
in buncombe.
Some of the foremost mercantile
statesmen believe that statesmen are
born. not made. 1t may be that men
who ran these stock selling schools
,,l. %.
did. they certainly did not let the
statesmen recruits know that they had
any such idea.
Their entire line Of talk to these
recruits was to the effect that any
body could be salesman. All that
is necessary is for some one else to
help bring out that sales ability.
Picture of Steel Magnate.
Newspapers were referring at that
time TO Charles NJ. Schwab as Ameri-
cas- greatest salesman. this picture
of the steel magnate having been
drawn because of the enormous mu-
nitions sales which he had closed with
the allies.
You are as good salesman as
Charles NJ. Schwab! Get out and
prove it to yourSelfi
Such was the gist of the informa-
tion impaired to the recruits. Those
recruits were obtained generally
through the help wanted" columns
of the newspapers. An advertisement
might be inserted under the classifi-
cation of clerks" and that advertise
ment would ask clerks why they
should be laboring along year after
year under a mere pittance of sal
airy as clerks when fortune lay be-
fore them in commissions on sales of
securities.
Similarly, advertisements might be
placed under the classification of
"bookkeeperS" or "stenographers''
or "machinists" or "tailors." asking
men in each of these lines of occupa-
tion why they were wasting away
that meant no satisfactory returns
when wealth, and peace of mind, and
easy living lay right before them via
the path of securities-selling.
Called Form of Rascality.
Some of these sales organizations
which were selling stocks at prices
absurdly high for what the stocks
represented-in some cases stocks
which to any one even slightly fa-
frauds on the face of them-were
careful not to hire professional stock
statesmen. For one thing, the pro-
fessional stock salesman, even
to attempt the selling of such
through that kind of rascality opm-
mission much higher than the sales
organizations were paying to the
guileless recruits.
Another reason was that the pro-
fessional stock salesman might very
easily break up the morale" of the
schools through a natural propensity
to ridicule the recruits because of the
absurd manner in which the latter
were being hoodwinked. For, the
sales organizations. while imbuing
the recruits with the idea that the
latter were to be salesmen, were in
effect virtually selling the bogus
stocks to the statesmen themselves.
To be exact, they were using the re-
oruits merely for the purpose of
reaching the relatives and close
friends of the recruits. Here is the
| explanation of that:
"SeIiing' His Friends.
, The recruit lacking real sales abiI-
| ity would find himself unable to sell
! stock when he went among strangers.
| The most natural thing for him to
! do when that happened was to turn
! to his relatives and close friends
and try to sell to them Naturally
he would not be apt to attempt the