Evening star., 1923-07-28
tCl Wheeler Syn Inc.
By H. II. TREVOR.

By X. II. TREVOR.
Copyright, 1923. by New York Commercially
Toward the close of 1921 and early
in 1922 the bucket shops saw them
selves facing a desperate situation.
Especially was this true with regard
soliciting business almost wholly in
stocks listed on the New York Stock
Exchange. There were a few houses
which were confining themselves
mainly to curb securities, and some
which were soliciting nothing but
buying orders on curb issues.
The latter houses had obtained a
whiphand in the curb market and
some of them. as will be shown later.
were able to weather the terrific runs
on the bucket shops which developed
early in 1922. Some OF the curb
bucket shops were able to keep going
for a year longer. The main point
in their favor. as compared with
houses which had been bucketing New
York Stock Exchange securities on
virtually controlled the market in
various curb stocks and most of their
soliciting of buying orders had been
for these securities. Inasmuch as
they controlled the markets in the
issues on which had been placed the
them. these houses were not in fear
of any such big advances against
them in prices for stocks as were the
houses which had bucketed stocks
listed on the New York Stock Ex-
change.
1t was only a prolonged run which
was apt to smash some of the big
curb bucket shops, and incidentally
it was that sort of prolonged run
which eventually proved the undoing
of those houses
PerilOus Position.
Attention was drawn in the preced-
ing article Of this series to the fact
that the houses which specialized in
the bucketing of stocks listed ON the
New York Stock Exchange had
bucketed large buying orders for
those stocks in a period of depressed
market prices. Attention was also
houses had engaged on such a prof
ligate line of expenditures to obtain
new customers. and had otherwise
thrown away their funds so reck-
lessly that they had comparatively
little reserve with which to pay off
customers should a run on their
houses develop. Naturally. the higher
prices might go the fewer the num-
ber of people who could be paid off.
Some of those houses had in fact been
so very reckless with the money sent
in to them for the purchase of Sc
curities that their overhead alone was
sufficient to put them into bankruptcy
even without run being made on
them-once they should find them
selves unable to get new accounts.
Collapse Foreseen.
Many people who had been watch
ing the bucket-shop situation closely
We're aware that such was the case,
lapse of bucket shops was nearing.
These observers had all the more
reason to believe such was the case
because of the fact that there had
been the sort or stock market which
means SO much peril to bucket shop
the market that goes upward very
steadily over prolonged period OF
time without the public being at
tracted to any large extent, however,
to the buying side on the advance.
That sort of market means that
houses which have bucketed large
buying orders at low marks will find
themselves. because of the lack of
new buying orders entering the mar
ket on the advance, unable to pay off
old customers who want to take down
their profits by handing out to those
customers the money coming in from
new customers who enter new buying
orders
Crash Was Apparent.
1t can easily be surmised that such
astute students of market conditions
as the governors of the New York
Stock Exchange should have per-
ceived that a crash was impending.
Oddly enough. however. the New
York Stock Exchange did not out
wardly make any big move until that
time against the ring of houses which
brazenly stealing millions of dollars
from the American people by bucket
ing orders for stocks listed on the
New York Stock Exchange.
In fact, the New York Stock Ex-
change had provided one of the most
convenient mediums for the operation
of those houses. This medium was
it's sanction for several Of those
houses to install what are generally
known as the Outside" tickers. The
street had presumed that the New
York Stock Exchange was maintain-
ing the utmost vigilance in supervis-
ing what houses might or might not
have the use Of such tickers.
This outside" ticker system, al
though under supervision of the New
York Stock Exchange authorities. is
not operated directly by the exchange.
but 1t means virtually the same sort
of. ticker service to a house as mem,
bers Of the New York Stock Ex-
change have in the ticker system OF
the exchange itself.
The New York Stock Exchange be-
came suddenly active at the time
when the bucket-shop system had