The Washington times., 1925-06-08
BILLIONS LOST
IN BOGUS
STOCKS
National Credit Men and
Other Organizations Fight
ing swindling
HATTON.


The amazing loss to the Ameri-
can investing public through fake
stock selling schemes and invest
ment in fraudulent securities is
one of. the astounding features OF
our economic life and one which.
According to bankers and brokers,
Is one of the hardest financial
problems which they have to face
in dealing with those who come to
them for advice.
Many people with money to in
vest are 1ured by the brilliant pic
lures painted by fake stock sales
men and turn over their dollars
without question.
Others ask the. advice of re-
liable banker before investing. A
few, far too few, take the advice Of
the banker and are thus saved from
serious loss.
The tremendous total Of losses
through public investment in fake
securities, crimes against banks,
check manipulations. credit swim
dies and dissipation Of insurance
funds is estimated by the protec-
tive department OF the American
Bankers Association to have been
over So, 500, ,O0O. 900 in 1924.
All of this tremendous sum was
not taken from the investing pub
lie, but q very large per cent or
Il came from the pockets Of those
who had q few thousand dollars
60 invest ana, without knowledge
of finance or OF the quality of
the investment offered, purchased
stocks upon the representations Of
some smooth-tongued promoter.
Credit Men Fighting It.
Every effort Is being made to
check the operation OF fake stock
and other schemes for swindling the
public. The National Association of
tion in washington is an active
agent working against financial
crime.
The American Bankers Associa-
ton and the Investment Bankers
Association are engaged in similar
campaigns to protect the public and
the District OF Columbia Bankers
Association is actively engaged in
efforts to prevent clients and Gus
toners OF local banks from being
robbed.
In an article dealing with the
present war against the crime and
fraud plague Trust Companies"
says: TO direct wage earnings
u.
I.els into bank deposits. the Ameri
can Bankers Association is broad
casting thrift messages.
To teach the people the value OF
property conservatism and fidu.
ciary protection for the family. the
trust companies have for several
years waged a national educational
campaign and are now closing ranks
with life insurance underwriters
to popularize life insurance trusts.
one Of the mime objectives Of which
II to protect widows and benefi.
ciaries. who now receive annually
nearly $500. 900 900 in cash on policy
payments and 80 per cent Of which
IL lost Ia seven years, mainly
through fake investments"
A canvas OF the local banking
institutions and trust companies
discloses that the bankers can
point to case after case which has
come to their notice wherein
widow or other beneficiary under a
VIII has been led to serious loss
through investment in fake schemes
without taking the precaution of
consulting q banker before making
the investment.
It is cheering to note. however,
that there are available a great
many instances wherein the bank
or trust company, when consulted
before the investment Is madh, has
saved the individuals capital from
depletion or entire loss and directed
II into profitable and safe invest
ment channels.
There are several instances Of
recent occurrence wherein a bank
has been the means Of so In
creasing the income upon a small
amount Of capital through wise
investment and reinvestment as to
secure from a very small original
amount a comfortable living.
The present sessions OF the Ma
donal Association OF Credit Men
Will undoubtedly deal with in some
aspects Of the serious problem of
worthless securities.
While these discussions will be
mainly for the benefit Of those ell
gagged in credit business they should
prove OF equal interest to bankers
and to the investing public for the
enormous losses to the American
people annually because Of foolish
investment has become one Of the
serious problems Of the day and ole
which, IL seems, cannot be met and
solved by the enactment OF laws or
statutory safeguards.
The thrift campaigns carried on
oy banking institutions are having
their effect to the extent that moro
people than ever are carrying saw.
ings accounts and laying aside a
certain part OF the income for the
purpose of making income -produc.
ing investments.
All OF this thrift and all of this
saving. however, will avail the in