CHAPTER XVIII

THE BUCKET-SHOP

THE dealer in stocks and shares who is not a member of the Stock Exchange is sometimes called an outside broker, because he is outside the restraining influence of a governing committee, and, therefore, free to conduct his business as his fancy prompts him. The more opprobrious term of 'bucket-shop 'is, however, generally used to designate the peculiar nature of his business; and, as a rule, we shall see that the latter term describes to a nicety the species of gambling dens which are run, of course in the cloak of virtue, by certain Jews and shady Britishers, who have made the astounding discovery that a country with a population of over fortyone millions contains a large number of greedy persons, whose inexperience of the financial methods of the times in which we live makes them an easy prey to every trickster who will promise largely. That these greedy persons richly deserve the fate that always overtakes them nobody can deny; for they do not much care who toils so long as they themselves can live in idleness; and, as a rule, they are not entitled to much sympathy, seeing that their judgment is blinded by their own greed, and by their desperate haste to get rich at the expense of their fellows.

Perhaps, before discussing the wiles of the outside broker, it were better to explain why he is said to run a 'bucket-shop.' Clerks in the employ of the Exchange Telegraph Company collect the prices of the various stocks and shares which are dealt in on the Stock

Exchange, and take them to an operator, who transmits them to the company's subscribers, each of whom has a tape-machine or ticker' in his office. This uncanny little instrument ticks out the names of the stocks, their prices, and the time at which the bargains were made, upon a narrow strip of paper or tape, which falls in coils upon the floor. Hence we get the tape prices' of stocks and shares in the newspapers. In more primitive times, when people's taste was less fastidious, these coils of tape fell from the ticker into a bucket; so we get the word bucket-shop, which, in these days, is applied to the business premises of an outside broker, who, therefore, is a bucket-shop keeper. His customers, that is to say, gamble with him at tape prices.

We shall find the business of the outside broker a very simple one; and when my readers are initiated into his tricks, they will wonder at the folly of their kind. For these men are not even clever: they are simply rogues. Every company, once a year, makes a return of its shareholders to the registrar of joint-stock companies, and states thereupon the name of each member, his address, occupation, and the number of shares held by him. On payment of a fee a copy can be made of this return at Somerset House by any member of the public; and any person, by paying at the rate of sixpence for each one hundred words, is entitled to demand from the secretary of a company a list of its members.

Here another species of enterprising firm must be introduced to the reader. There is a fairly strong demand for these lists; and, in our competitive days, all demands, however peculiar, are soon perceived and supplied by certain needy persons, whose anxiety to succeed in the business of life stimulates their natural curiosity, and urges them to fresh and sustained endeavour in new fields of usefulness. So we get firms whose business it is to copy the lists of members of the various joint-stock companies; and, as every man who has been a secretary knows, these firms, directly a

company has been successfully floated, apply for a list of its shareholders.

The demand for these names comes principally from the outside broker and the company promoter; and the firms which collect them will, for a consideration, select his prospective victims from their lists, address his prospectuses, and so on. Some bucket-shop keepers send girls to Somerset House to copy names for them; but very many deal with these firms, whose managers are often to be seen in the offices of the outside brokers.

Now we come to the art of 'list splitting.' An outside broker, when markets are dull, brings down his lists, which may be called his capital, and sets his clerks to work upon them. As a rule, he prefers a company whose shares are not quoted on a Stock Exchange-one of those local companies, with local directors, whose shareholders reside in the neighbourhood, and who, the bucket-shop keeper thinks, are sleepy, unsophisticated folk, whose innocent minds never ponder on the wiles and the wickedness of the outside broker, but who imagine him to be a London stockbroker of eminence and position. A certain few will doubtless be foolish enough to buy him at his own price; but a Londoner's opinion of the countryman is always amusing, and seldom just, while it generally shows only too plainly that his mind is as narrow as his streets; for most countrymen are perfectly aware that the proper and only place for a broker's circular is the waste-paper basket.

Having selected his list, the outside broker, so to speak, splits' it in two. To one half of the shareholders he announces that he is a seller of, say, 'Yarmouth Steamboat' shares, and to the other half he declares himself a buyer. In reality he is neither the one nor the other, but just a species of financial wolf on the prowl. Sometimes he will say that he is a seller at 4, and a buyer at 3, thereby providing himself with a profit margin of 1 for his raid, or he will perhaps make the margin a little closer. He may, however, decide

not to name any price whatsoever, but simply to state that he is a buyer or a seller, as the case may be, and to ask the shareholders at what price they will buy and sell, in the earnest hope that he may catch a few on the hop, and reap his harvest.

In every probability our bucket-shop keeper will not possess a single share in the Yarmouth Steamboat Company'; but he does not want any, his aim being to buy from A at 3 and to sell to B at 4. Suppose he obtains a list of the company's shareholders, and splits it, and that he is lucky enough to get thirty offers from as many inexperienced persons, some of whom are ready to sell and others to buy. Then all he has to do is to buy from the sellers and to sell to the buyers. A will buy 100 shares at 4, and B is ready to sell 150 shares to the broker at 3; so the broker telegraphs to A that he will sell him 100, and asks him to wire back if he accept. Should A be foolish enough to reply in the affirmative, then the broker buys of B, and passes his 150 shares on to A and the rest of his dupes. He, in short, is a wolf between two flocks of silly sheep, whom he shears gaily, taking as many shares as he wants from the one, and passing them on to the other, occasionally netting a handsome profit by the deal.

The outside broker's expenses are the cost of his lists, clerical labour, postage stamps, stationery, and so on. Perhaps one of the most curious facts in connection with modern civilization is that the employé who loses his character must either starve or become a master; and nowhere is this fact more in evidence than in London and its numerous suburbs; so, in the natural order of things, hammered' Stock Exchange men, dishonest stockbrokers' clerks, German Jews, and other undesirables, join the ranks of the bucket-shop keepers, many of whom are blessed with pasts which they would like to bury in their suburban gardens, so unsavoury are the details.

A gentleman, having just escaped becoming a guest of royalty, and being acquainted with high finance,' as

practised in the city, determines, as a last resort, to split a list. Probably at the time he will have the use of a friend's office; and possibly he has embarked all his capital in the venture. Then indeed will he fervently utter the outside broker's prayer before he opens his letters of a morning:

O Lord! give us this day our daily fool-and many of them!'

He may not get a single reply; and, on the other hand, perhaps he has chosen a lucky list, with the result that he has a fairly large flock to shear. Then, lighting a cigar, and tilting his hat on the side of his head, he sallies forth with his telegrams, thinking that, after all, old England is not such a bad place to live in, despite the climate. If all goes well, he still has to pay for the shares he buys, unless he can persuade the sellers to part with them without first receiving payment; and he may not care to make the attempt; so he calls upon a money-lender, shows him his hand, and pays a usurious rate for a loan for a few days with which to buy the shares and carry through his deal.

Our bucket-shop keeper now has a little capital; so he takes an office of his own, and hires an office-boy. At first he keeps to the list-splitting dodge; and, if successful, he begins to advertise, and to deal on the 'cover system. His client, that is to say, deposits, as a rule, 2 per cent. of the price of the shares in which he gambles; and this deposit, of course, is the 'cover.' If he bet on the rise, the broker sells to him; and when he bets on the fall, he sells to the broker; though neither, in reality, intends delivering stock, the transaction being a gamble in differences, and the contract note a mere bookmaker's memorandum, which is not enforceable at law.

The broker generally professes to deal at tape prices; and he calls himself a jobber or dealer. He is, that is to say, a principal, who pretends to rely upon the jobber's turn for his profit; and he never tires of informing his prospective dupes that they will save them