Atlanta tri-weekly journal. [volume] (Atlanta, Ga.) 1920-19??, 1923-07-21
GOTHAM AUTHORITIES TURN
SCREWS ON LEADERS IN
BILLION-DOLLAR SWINDLE
Amazing Tale UnfoIded as
Bucket Shop-BIue Sky
Probe Is PuShed-Wom-
en- Among Victims
BY ROBERT r. SMALL
Ueased Wire Service to The Journal
DOWNRIGHT. 1921


NEW YORK, July 1S.-What is
described now as a "billion-dollar
swin1le ring" has been operating in
the financial district of New York
for the last three years. The activ-
tiles of this ring are being unearthed
day by day and as the amazing tale
unfolds the state authorities are be-
ing spurred to still greater efforts
to wipe this blot from the escutcheon
of the country's financial center.
1t was estimated today that the
bucket shop failures of the last few
years have involved 500, 100000 in
losses to the innocent traders in
Wall street securities instead of the
$50 100000 announced a few days
ago.
For the second time within a week
the state authorities have applied
the new Martin law against a stock
promotion enterprise. This law pro-
vides for injunctions to stop the
sale of stocks believed to be fraudu-
lent. Is the latest development in
dealing with blue sky" promoters.
1t was applied today against the
Motion Picture Producing Company
of America, Inc, and the National!
Exchange, Inc, as we'll as against
Johnson & Hopkins, and Walter L..
Johnson, president Of the three con.
Germs.
Money Gone:No Pictures
1t is charged that $75O,OOO worth
of stock has been sold in the various
companies without the production of
single picture, and today, instead
of being able to operate, the motion
picture concern is $4,000 in debt
The state claims in it's petition that
Johnson pocketed $475,000 of the
S750,000 paid into the concern and
that the remaining $275,000 went for
salaries, office rent, furniture and
commissions to selling agents.
The total amount of money lost
in these stock promotion concerns
which never got beyond the organ
izing point cannot be estimated even
at this time. That it has reached
into the hundreds of millions there
is no doubt. The surface has only
been scratched as yet. The state
authorities have many concerns on
the suspected" list, and as rapidly
as the necessary evidence can be
obtained they, too, will be stopped
from the further sale of worthless
stock. The authorities regret that
they cannot reach all the suspected
houses at once and use the Martin
law for the protection of those who
are continuing to fall victims to the
Wlles of the sleek stock statesmen,
but 1t is necessary to proceed with
caution lest some legitimate concern
be damaged.
The various stock exchanges in
the city are cooperating with the
authorities to the fullest extent. The
consolidated exchange is particularly
active. 1t is making a sweeping
investigation and, in addition to ex-
polling a member firm and throw
ing it into bankruptcy within the
last few days, also has stopped
ticker service to suspected broker
age offices.
Many Women Victims
Women have been largely the vic
TINS of the spurious stock selling cor
porations in which the entire capital
invested has been wiped out by the
expenses of promotion and the "com
missions" taken by the organizers
Many women also have been caught
in the bucket shop crashes, but the
supposedly stronger and wiser sex
has fallen just as hard or even hard
err in other instances.
A phase of the wholesale swindling
which is giving the financial district
as much concern as the attack upon
the integrity of the legitimate brok'
err is the tremendous loss to indus
try in this country in the last three
years by the bucket shop failures
The money turned into the broker.
age houses was in many cases in
tended for permanent investment
in legitimate and high class stocks
and bonds. OF course it never went
into these securities, but was gobblod
up by the members of the firm and
used eitEer in their own specuIations
or to maintain the automobiles, the
multiple living establishments ind
LllC S1I1 - WCCt1lCdL ID VI lIAc
Fleeing and sometimes fleeing gam.
blers.
Legitimate stock market and bond
values might have been increased
many fold with the inflow of the
money squaldered by an all toe
trusting public in the bucket houses
where they had no chance from the
moment they stepped within the
door. The financial loss to the
country through the commercial di
version Of this money is another ele.
ment in the swindle situation which
cannot even be appropriated, but
old brokerage houses today said it
was tremendous.
New York is struggling hard to
clean its Augean stables, but day
by day in every way the task grows
greater and greater.