Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-02-10


ding Is practiced only by
those thieves whose methods
have kept up with the development OF
! modern financing AS the financial
structure becomes more complicated, the
! plots of these schemers become increaS-
ingly shrewd, and their takings corre-
F; spondingly greater They must be
| combated by Nationwide groups inter-
ested in preserving honesty in business,
! or the faith of investors in all types
of securities will be shaken.
Upon this platform the National Asso-
citation of Securities Commissioners,
thr 1ugh its president, Jesse v. Craig of
Lincoln, Neb., is now undertaking the
organization of the forces opposed to
stock frauds, in an attempt to drive out
grafterS and confidence men OF all
kinds who prey upon the uniformed
Already many powerful financial in
situations and associations OF flnanc1ers
have Joined the movement and 1t is ex-
pected that a permanent committee soon
| will be formed to direct the work.
Swindlers Defy State Laws.
The time has come, according to Mr.
Craig, when some such rallying OF the
| forces against swindling must occur.
Fraud is being practiced in the United
States on larger scale today than ever
before. despite The existence in at least
| as States of legislation designed to pre-
| vent 1t. How much money people lose
every year through foolish investments,
made upon the representations OF
swindlers, is impossible to estimate, Mr.
Craig says, but it is safe to assume that
| it amounts into millions, and perhaps
| billions Of dollars.
Stock swindlerS are, in general, of two
| I.;..As. ttaco xr,t,o coll dirort RI tha in
| weston in person, and those who use long
distance methods. About IS States now
/ have effective blue sky" laws which
control the direct salesman. Several
others Lave laws which prevent his ac-
| tiyities to a certain extent.
The result is that the high-pressure
| salesman. who calls from door to door,
| is fast disappearing. But his place is
| being taken by crooks who have found
| that the telephone, the telegraph and
Itlle mail offer way for him to carry on
| his promotions from safe distance,
| and often more cheaply and effectively
! than by the old methods.
| It is against this group Of swindlers,
| who operate usually from State such
as New York, where sellers of stock are
not required to register. that the ma
| tional organization must act, says Mr..
| Craig. While the laws Of various West
! ern States appear to have saved local
| investors millions of dollars by keeping
| out direct statesmen of questionable
securities, their work is now being Offset
to a large degree by operators of tipster
sheets and long distance selling schemes.
Thievery Practiced by Mail.
! within the last two months I have
made survey of this situation through
the various executive officers of State
blue sky laws" he said. II have re-
ceived answers from 80 States, praising
| the operation of their laws, but COM
planning in many instances that boiler
Shop operators in New York, Chicago
and other large cities had been vitiating
these performances by campaigns car
ried on through the mall, by telegraph
and telephone.
New York is an especially bad cen
ter for such operators, and more than
100 of them operate from the Wall
Street district alone, according to esti-
mates furnished by persons who have
looked into the matter. The trouble
Is that there is no law in New York
State requiring them to register, and
even though they are traced and To-
Gated It Is often impossible to prose.
fciite and drive them 6est