Evening star., 1923-07-28
Exchanges Let Bucket Shops
Loot Years Before attacking
Vigorous Action Taken Only When
Wholesale System of Robbing Vas
Near Collapse From Troubles Within.

reached that point in its operations
which gave such plain indications to
the wiseacres of the street that a
bucket-shop crash was close at hand.
The street suddenly heard of investi-
cations by the New York Stock EN-
change on activities of some of the
houses which, according to the street
rumor. had long been classed as
, bucket shops, and following the re-
ports of these Investigations came
announcements that the tickers of
these concerns had been ordered re-
moved.
The Runs Begin.
Those announcements were suffi-
cient to start runs on the houses in
question. At about the same time
various publications enlightened the
public on conditions then prevailing
with regard to bucketing. and the run
on the bucket shops by scared GUS
toners grew rapidly.
Some customers went into the
bucket shops. put up enough money
to pay outright for stocks which they
mad been carrying on margin and
then demanded delivery of their
stocks. Others, who had margin ac-
counts. sold their holdings and called
for the money due them.
In either way the bucket shops
were hit. Paying out money to the
people who closed out accounts made
working capital" OF the bucketeers.
working capital" of the bucketeers.
In the case Of people who called for
delivery of their stocks. the bucket
shop men found 1t necessary, because
OF not carrying those stocks. to go
into the open market and buy them.
One after another the bucket shops
felI. Frantic efforts We're made by
some of the bucket shop men to last
through the run, but the persistency
with which the light of publicity was
thrown on the situation frustrated
their efforts.
The foundation for a vigorous
newspaper crusade had been laid by
some financial magazines, particularly
in the work done for one of those
publications by former newspaper
newspapers. The financial writer of
one evening newspaper directed his
attack in a manner which proved
probably one of the most effective
weapons against the bucketeers. the
constant tenor of his admonitions to
his readers being about like this:
Demand your stock. Don't be
bluffed. Pay no attention to any ex-
cuses or any suave talk. Get the
stock"
Curb Houses Hit.
These warnings served not only to
augment the run on those houses
which had been specializing in the
bucketing of orders on New York
Stock Exchange securities, but also
caused big run on houses which had
confined their soliciting of business
mainly to curb securities and were
suspected of being engaged in the
bucketing of orders on such stocks
The runs on some houses OF the lat
ter group made enormous inroads
into the funds of those institutions.
Inasmuch as curb securities had not
scored very large advances in favor
of the customers. but were instead in
most cases selling below the figures
at which customers had placed orders
for them. several of these houses were
able to hold out during that run.
After the run had subsided these
curb houses had very slim bank rolls,
compared with what they had some
weeks before. Nevertheless. the idea
seemed general among them that
with the storm over" public favor
for curb stocks would return. Con-
seQuently, these few houses thought
they saw a huge business ahead for
themselves. especially as there was
now removed the menace of competi-
tion from bucket shops of various
sorts which had gone down. in the
crash.
Public Stays Away.
However, whole year passed and
curb market to any encouraging ex-
tent. Meanwhile the curb bucket
shops were groaning under the bur-
den of heavy. overhead Also some old
customers, -belated in becoming
scared. were continually drifting into
the curb bucket shops to draw out
their equity or pay outright for
stocks which they had been carrying
on margin and to call for delivery of
the shares. AS a result the funds of
the curb bucket shops were reaching
such low marks that some of these
houses were in grave danger of bank
ruptcy should another big run de-
velop.
What they feared most of all was
another newspaper ,"blast"-which is
the financial underworld's term for
an expose. That blast" came a few
months ago, and the reader knows
the rest and how quickly a line of
curb houses CTumbled.
Active Mt Last.
The Curb Market Association be-
came very active with regard to NOV
Its membership at the time this year
when those houses were on the verge
of collapse, just as the New York
Stock Exchange authorities had be-
come similarly active with regard to
consolidated bucket shops and other
bucket shops Just a short while be-
fore the latter institutions crumbled
last year.
1t is presumed that the reader is
familiar with much of the recent ac-
tivity of the New York Curb Mar,
ket Association in that regard, and
that also he is familiar with the
manner in which the New York Stock
~. :.