Evening star. [volume] (Washington, D.C.) 1854-1972, 1923-08-04


tion as 1t exists. and to do something
themselves to supplement the work
or the public authorities.
And that is what honest finance and
honest business is doing today
throughout the country there have
sprung up. especially in the larger
cities, crusading business organiza-
tions. directed by public spirited men,
working for the eradication of fraud
In nnance and business methods In
a way these are outgrowths Of the
systems which the newspapers de-
Nised for the protection of their ad-
vertlsing columns from bogus offer
ings.
These organizations have ',ean aoIc
TO spread a dragnet of in Sesrigatipn
over the field OF crooked stock promo
ton and to gather a mass of evidence
which the public authorities, because
or limited appropriations and because
or the necessit" in many cases of
belng forced to await complaints be-
fore being able 20 proceed on a prose-
cution, could not obtain.
Stopping the Sales.
The private crusaders have been
able to move against the sellers of
bogus securities in the early stages
OF operations of those individuals
These organizations have proved par
t'cularly valuable in taking up cases
against the swarm of swindling pro-
motors who have piled their trade
telephone system. and the various
other methods of personal solicita-
ton of prospects in which use of the
mails has been so studiously avoided
In some cases the private crusading
organizations have been able to place
evidence before the authorities. fed
eral or state. under which the latter
could prosecute the offenders. In
other cases it has been possible to
drive the swpdlers out of business by
they were employing
meanwhile the public authorities
reach the swindlers. The United
United States Department of Justice.
while Waging tie most aggressive
campaign of their long battle against
the swindling promoters. are also de-
ylslng what are expected to prove eff
fective methods for prosecution of
bucket shop practices. The attorney
general of New York state has been
able to proceed against bogus stock
sales under new legislation early
enough to nip the stock selling cam
palgns in the bud. and other states
are expected to adopt similar legisla-
ton.
Publicity the Cure.
The New York Stock Exchange and
the New York Curb Market have both
been aiding in the crusade against
the bucketeers during the past few
months in a manner suggesting that
the present administrations of those
institutions are sincere in their eX-
pressed determin ation to help stamp
out the bucketing evil and to work
vigorously against a re-eSta blishing
of A bucket shop system.
Not least important is the fact that
these officials seem to have come to a
realization of the extent to which
publicity can aid those efforts. Eff
forts to belittle stories on the ex-
tent of the bucket shop evil a few
years ago did not serve 70 curb that
evil. as was shown SO plainly later.
but really proved of immense aid to
the bucketeers.
The more the public learns about
the manner in which bucket shops OPP
crate, and the sooner it is told the
truth whenever there is any real in
dication that bucket shops are be-
coming active, the quicker the public
itself will put the bucket shops out of
business by refusing to give them
business. The bucketeer. like any
other criminal. works best in the
dark. He thrives on the ignorance of
his victim. He cannot stand the light
of publicity.
Liberty Bonds.
The same is true of the vender of
years the seller of fraudulent securi-
ties has been able to ply a larger
trade in this country than ever before
because OF the hundreds of thousands
of people who had had their appetites
whetted for securities through pur-
chases OF liberty bonds. Most of
these people had never bought any
securities until they purchased the
government issues.
The money which was stolen from
"a
chasers by crooked financiers went
the countless ways that stolen money
always follows. 1t went into insane
overhead, into speculation and gam
bling by the thieves and into riotous
living.
The work of the big thieves was
no more constructive than was that
Of the little thieveS-even for them
selves. The house of cards built by
the bucketeers and the crooked pro-
motors in this country tumbled in
upon them, leaving most of them
fiat broke" at the end. The swim
ding bankers in Berlin who made
markets throughout the world for the
German marks. which they knew that
they themselves were going to make
worthless. apparently are faring not
one iota better. The terrific smash
in the mark in the past few weeks
to be left for the swindlers of the
vast line of enterprises which they
were trying to build up at the expense
of the people in this country and
other countries whom they swindled.
The revelation of the truth about
the bucket shops and the crooked pro-
motors as it is now being revealed
proves a terrible shock to the new
army of securities buyers which this
country had gathered together
through it's liberty loan campaigns.
But one of the lessons it has taught
them is the lesson of the real oppor-
tunities which lie in legitimate
finance. Also it has taught the Sc
curities buyer to look before he leaps
1t has taught him the lesson of Civ
ing his investments in securities the
most careful sort of study.
Outlook for Industry.
When this army of buyers again
turns to the purchase of securities it
will be a larger army of discerning
buyers than the securities markets
have ever known. Its potential buy
ing power for legitimate securities
will be enormous. This buying power
will mean a real financing for the
companies represented by those Sc
curities, and not a mammoth rake-off
for swindling promoters and for
bucketeers. That buying power is to
make the wheels of American indus
try spin as they have never spun be-
fore.
The stock market has been cratic.
following the shock of recent revela-
tons. The public has been hesitant.
Industry is puzzled.
Slowly, but surely, however, the
stage is setting for the stock market,
the public and industry to get to-
gether-the stock market with it's
conscience thoroughly awakened. the
public with a sense of thorough con-
fdence and trust, and industry with
it's pulse throbbing to reach out to new
endeavors.
There are big times ahead