Evening star., 1923-07-30
By II. X. TREVOR.


The bucket shop swindle in the past
decade was essentially a Wall street
swindle. There were various chains
Of bucket shops that had their head
quarters in places other than New
York, some with headquarters in Chi
cago, some with headquarters on the
Pacific coast. etc. but the people who
effected the largest loot in bucketing
had their headquarters in New York
and were graduates Of Wall streets
schools of crooked finance.
In the case of crooked stock pro-
motions Of the present decade, more par
ticularly those Of the past Ave years,
the case Is very different. Wall street
had its crooked stock promotions and
many of them. But the heaviest In
road into the savings of honest people
was not made from wall street. 1t did
not have it's origin in Wall street.
Generally, the crooks who directed
it were but little familiar with Wall
streets ways either good or bad. A
surprisingly large proportion of them,
in fact, knew almost nothing about
stock market operations. even most
of those who operated out from New
York city itself. They wrre unknown
TO Wall street and Wal street was
unknown TO tneIn. 1ney uluu c
the faintest idea of how to max e
markets for their stocks. even IL they
had desired to make such markets.
However, there were mighty feW or
them who seemed to have such de-
SireS.
Could Not stand Light.
A main reason for this was the fact
that the securities which they pro-
NOTED could never have stood up
under the pitiless searchlight that Is
thrown on a stock which has broad
active trading. particularly on Sc
curities exchange.
A rank stock promotion swindle
can be put across through the me-
dunn of a big market operation for
a short while, but generally for only
a short while. There have been few
instances in which sponsors for
fraudulent securities active in the
big trading markets were able to
hoodwink the market year In and
year out into believing there are some
enormous potentialities on earnings
for those securities when the sponsors
knew absolutely those potentialities
did not exist. However, there are
two sides to a big trading market i'll
securities-a short side as well as a
long side. There are always lot of
people anxious to play the short side,
particularly among the dyed-in-t :
wool professionals. Some of the
short side operators are keen statis-
ticians and securities analysts who
are willing to back their own money
on playing short against the judg-
ment of people whose buying may be
advancing the stocks.
Source OF Danger.
With these vigilants on the job. it
can easily be seen that the promoter
market or attempts to push such an
issue of questionable merit to a price
level much beyond what IT can rea-
sonably be considered entitled to. GER
! tainly does not have things all his
own way.
Such a promoter may, in short
period Of frenzied speculation, sue
ceed in selling a huge amount of his
securities at widely inflated prices.
But generally 1t is question of only
a short time when his own unwilling
ness to take back stock at the levels
around which he knows the stock Is
not entitled to sell and the continued
hammer of the market by outside
| interests who have decided views as
to the worthlessness or near worth
lessness Of the stock, cause a big
, break In the issue. Also 1t is to be
noted that periods Of frenzied specu-
lative markets are few and far be-
tween.
However, thousands of promoters
of fraudulent securities who were
neyer anywhere near Wall street
have been able to sell their wares In
large volume almost steadily over the
course of several yearS-with no bids
| made on the issues.
Look back over the arrests that
have been made for the, sale of fraud
u1ent securities by the United States
nssne .eEithe aveE It the t,f Sopse p e es
| that, in the cases thus involved, the
number Of fraudulent securities fol
which any big market was attempted
| for any length of time is very small
as compared with the number of Is.
sues for which no market was at
tempted.
! Use OF Mails.
The promoters of the bogus securi-
! ties Of the period of twelve or f1fteeT
years ago had been using two great
avenues for reaching the populace
| One was the United States mails
which were flooded with tons Of
f.; literature on these securities. Th,
other was the advertising columns oi
the newspapers. At that time there
| were many newspapers Throughout
| the country, some of them leaEn2
newspapers in big cities, which &C
cepted page after page Of famboyan
advertisements for the sale of weirt
line Of stocks-advertisem which
were fakes on the face Of them.
The promoters OF these stocks SOLE
I to people who had far less knowledge
Of securities and securities values
than the people who were accustomed
to trading In even the flimsiest o.
stock market promotions. Most o