CHAPTER XXVI.

THE TIPSTER.

The novice in stock speculation, among his first inquiries, before making ventures, asks: "Is there any

information that I can buy which will help me to make profitable deals?" The reply is in the negative, without qualification. There are two types of tipsters before the public.

(1) The advertising tipster, man or woman, who advertises under fictitious names or assumes pretentious "information bureau" titles, and offers for sale advance information regarding stock market movements, and,

(2) The tipster news bureau appealing to private subscribers and distinguished from the first group only by the fact that it does not advertise.

The tipster is a comparatively new figure in Wall Street. Ten years ago he would have been an impossibility. The amazing increase in wealth, the love of speculation peculiar to every people and a foolishly credulous public combined to open a field for the adventurer. His development has been rapid. Reputable newspapers have freely sold him their advertising columns. The United States Government not only fails to prohibit the use of the mails to him but in New York he has no difficulty in renting postoffice boxes, and transacting business from a post-office box

under an assumed name. Naturally many of these rogues had no wish to see their patrons, and so they were safeguarded by their post-office box connections, which rendered it unnecessary to advertise street and number addresses. This in itself should have been sufficient to warn sensible persons that the tipsters were disreputable thieves, but, strange to say, individuals and so-called "bureaus" at times obtained as many as 1,500 subscribers who paid $5 and $10 a month each for illiterate market letters.

A Brooklyn youth of the name of Miller, employed as a tool by a group of gamblers, organized on paper, what he called the "Franklin Syndicate." With the aid of shabby stationery and advertising from a 2-story frame house in a remote and poor section of Brooklyn, this young man succeeded in collecting more than $800,000 on his simple promise that he had discovered a successful method of speculating in the stock market and one which would enable him to pay his clients 520 per cent. per annum. He was exposed as a fraud by the daily newspapers, and sentenced to a term of imprisonment in the State penitentiary, while those behind him succeeded in escaping to Europe with the bulk of the money. Men, women and children were among Miller's clients, while, curiously enough, the number of physicians was large. The desire to gamble at this time (1900) was intense. Many persons confessed that they knew Miller to be a fraud and that he could not honestly keep his promise, but they had hoped to be among the early investors who would have received all their original capital back and a profit, to, in weekly installments, before the crash arrived.

Another man who had a commonplace Irish name and was in every respect a most commonplace person, advertised under a high-sounding English name for subscribers to his tips. To each subscriber he sent a wonderful telegraphic code, which he used as a medium in telegraphing his tips. His methods were so original; his advertising so specious, and the gambling fever so prevalent, that on the eve of the second election of McKinley he had 1,500 to 1,600 subscribers to his so-called "service." He notified his subscribers prior to Mr. McKinley's re-election that stocks were a "short sale," as, in his opinion, Bryan would be the victor as the result of a landslide. His subscribers were compelled on the election of the Republican candidate to buy back their commitments at figures which represented losses, and the wail of condemnation was so great that the Irish tipster retired from the field with from $75,000 to $80,000 and later engaged in the then profitable business of selling worthless oil stocks.

Still another representative of this type was the man who having 100 subscribers advised 50 to sell a certain stock having 100 subscribers advised 50 to sell a certain stock. short and the remaining 50 to buy the same stock. If 50 lost, his argument was that 50 had to win-an erroneous deduction-but he did not experience long life in the

trade.

Another type included "confidential stenographers," "private wire telegraph operators," and "bookkeepers," who advertised inside information for cash in advance. Some of the tipsters were so crude and fraudulent in their methods that their advertisements became the laughing

stock of Wall Street and yet many persons were and are to-day deceived by them. All "information" disseminated by group one is valueless. It is nothing more nor less than haphazard "guessing" by men absolutely lacking in self-respect.

Upon one occasion a Western adventurer, on coming to New York, was exposed in the newspaper with which the writer was identified as a member of its financial staff. He called with a letter of introduction from a broker and a very earnest request that he be allowed to live in peace as he had reformed and had engaged in no illegitimate business since his arrival in Wall Street. He had been one of the most audacious of the Western men who coined money from "tip" and "discretionary brokerage" operations. He was a fine looking, amiable fellow, and his statements were so ingenuous, and his letter of introduction so strong that there was no hesitancy in informing him that he would get no further publicity if he lived up to his promises. Profuse in his thanks he was about to depart when the writer remarked that if he fancied there was any obligation, it could easily be repaid by imparting some information about his old business.

"There is very little to tell," explained the tipster. "It is such a simple proposition. You see it is like this: Assume that I offer the public a sound, safe and absolutely reliable 6 per cent. investment in the form of stocks or bonds for sale. I could advertise it through the newspapers or through the mails until I grew gray-headed before I could get rid of it to small investors-the class with which we do business, and always, preferably the man

in the small town or the country. But, let me offer the public 40, 50 or 100 per cent., give me a good start and the use of the mails, and I assure you that I would have to hire a wagon in which to cart down Broadway my money-laden mail. Appeal to the cupidity of the small investor and you can get his money and in no other way. And I don't mind telling you that one reason why I have reformed is that I can no longer use the mails, having been shut out by order of the authorities.".

In less than nine months a private detective who operates a bureau that is supposed to expose frauds called on the writer and made the statement that he represented the reformed tipster and had a proposition from him. He said: "Mr. has been engaged in a legitimate brokerage business, not under his own name, but with another It is a discretionary business, 'mail order,' and no one has been robbed. Reporters have told him that he is going to be written up in to-morrow's paper. I will pay you $1,000 now if you will agree to stop the story."

The detective was requested to depart and invited not to call again, in which event he was promised that he too would be "written up." The editor of the newspaper interested was informed of the proposition, and the exposure was published the following day. The reformed tipster defaulted with profits estimated to exceed $100,000 and two "firms" closed up-(1) the "discretionary pool" brokerage house he directed and (2) the exchange brokerage house through which the tipster alleged he transacted his orders. The money was secured from out-of-town speculators on promises of dividends at the rate of 40 per cent.