Bucketshop Arrests.

Horowhenua Chronicle, 8 June 1910, Page 4

Bucketshop Arrests.

PROSECUTION QF EtVE RE I'I'TED MILLIONAIRES.

One of the most surprising prosecutions ever begun by the Federa Government was imuiguraited whei; orders were telegraphed from Wellington for the arrest simultaneously of thirty men in Boston, New York, Jersey City, Baltimore, Pitts'burg, Cincina-tti, Chicago and St, Louis on duarges of conducting "bucket shops."

Tho 'term "bucket shop" has its origin in tho jocular remark that a working man carrying a dinner-pail could trade in stocks just as well as a millionaire wfth a large bankiwg account. The American buokeit-shop is very different from the "outsido shop" in England, whioli deals in stocks lor customers through some recognised firm. Ft is here simply a gambling establishment, whore customers sit 'before a blackboard with quotations and be't a few dollars that the quotations will either rise of 'fall. The betiting is generally on a 1 per cent margin in ten-share lots.

The broker is supposed actually to buy 'tilto stocks, borrowing 99 per cent, of the value of the stocks from the bankers and giving tho stocks as security. But as a matter of fact he does not'buy anything, merely pocketing the imoney of ! t'he customers as soon as the quotations go against the better or paying tlie difference, as long as he is able, if the better wins. To maintain the fiction of legitimate business most of the bucket-shops have connection with a reputable firm o<f stockbrokers represented on thte hig exchanges, where the orders arc supposed to be executed.

Tliev have also a fast leased wire wit it'll furnishes them wM'h information as to tho state of the market a riuarter of an hour Ahead of the ordinary tape machine 'from which the blackboard quotations are takon. Most of the men arrested are members o-f thie Consolidated Stock Exchange o'f Philadelphia. The Government officials, im the course of their investigations, resorted to the illegal practice of tapping tlie wires running from the i bucket-shops to the Exchange, and learned that trot a twentieth of tho commissions accepted are actually oxecutod They describe the consolidated exehance .as a i>lace where some oighit members ,mat daily and played cards, the game 'being on.lv interrupted on the arrival of some grangers, when tho card taWe would be hapbly closed, while loud cries o,f Jen 'Koadm.fr for sale" would fill the budding. Tli'e profits of many or the bucket simps 'averaged as much as .£OOO and £1000 a day. There is no nntronal law against bucket shops, I>ut Congress passed an act .pmhiibitino: them in tlie'district of Columbia, and iall the accused. Iliad offices in Washington. A grand jury re.tnj'ni&d /indictments Against. th Q m, but the news Wins snptill th<? arrests hhdi been made. Five of the accuse*'! are nut-1 millionaires, and the firms bad 250 offices though nut 'tlie country. ' *