Sheriff E. Russell Trathen

1931

In April 1931, the month after the new, liberal gambling law went into effect (March 19), Washoe County Sheriff E. Russell Trathen, per his job description, collected $20,000 (about $330,000 today) in gambling license fees for the month of April from operators in Northern Nevada.

Seeking Piece Of The Pie

First, Trathen went to the Washoe County Commission (WCC) and demanded 6 percent of the total in commission, which amounted to about $720 ($11,800 today). He argued he was entitled to it based on the state’s license tax act of 1915, which afforded sheriffs a 6 percent cut of the proceeds of all business licenses (and 20% of grazing licenses) sold.

The commissioners sought a legal opinion from District Attorney Melvin Jepson, who advised them that according to the law, Trathen wasn’t owed or due any compensation for the collection of license fees. The WCC told the sheriff no.

Next Course Of Action

Trathen then retained Attorney Lester D. Summerfield. In early May, the two filed for a writ of mandamus, which is an order from a superior court to a lower court, government entity, corporation or public entity to take or not take an action, as required by law. Summerfield/Trathen asked the Nevada Supreme Court to order the county treasurer to  accept the license fees Trathen had collected minus 6 percent becuase the treasurer had refused to do so the prior month, April. (Another mandamus action related to the new gambling law was taken earlier in the month in Las Vegas.)

“The case attracted wide interest through the state, as sheriffs of other counties might be able to collect a commission on gambling licenses” the Reno Evening Gazette noted (July 8, 1931).

Not Like The Others

On July 8, 1931, the higher court dismissed the writ of mandamus and issued its ruling, which was unanimous: Nevada sheriffs aren’t authorized to retain any part of the gambling license fees they collect. They said the 1931 gambling act, unlike the 1915 law, lacked a provision for such a commission.

What the new legislation did spell out was that sheriffs were responsible for unpaid fees; they were “held liable on [their] official bond for all moneys due for such licenses remaining uncollected by reason of [their] negligence,” reported the Nevada State Journal (July 9, 1931).

Sources

Photo from Police Motor Units

Chicago Board of Trade

1870s-1920s

“I want to go short 1,000 bushels of December wheat, 1 cent on the bushel.”

This $10 bet was typical back in the heyday of bucket shops in the United States, between 1870 and 1920. People wagered on the future prices of stocks, securities and commodities — grains, cotton, oil, etc. — without actually purchasing the goods.

“The [price] quotations are used as basis of this species of betting as a gambler uses dice to decide the bet [in games like craps],” wrote John Hill in Gold Bricks of Speculation.

How It Worked

In the bucket shop, prices for various commodities were listed and updated on a blackboard as they changed according to the Chicago Board of Trade or whatever exchange was used. The shops often obtained the price quotes via telegraph.

The customer bet the shop that on a certain day or in a given month in the future a commodity would be worth a specific amount. If, at that time, it was, the wagerer won minus the shop’s commission. If it wasn’t, the shop profited. Because of the commission, which the customer paid whether they won or lost, however, the disparity between the amounts the customer and the shop made on a bet was significant, clearly favoring the house.

Say in the example above, the price of wheat was $1 a bushel, and the customer bet it would drop 3/4 of a cent. If it did, he made $5 — 3/4 of a cent minus 1/4 of a cent commission (equaling 1/2 cent), times 1,000 bushels.

But if it went up that much, the bettor lost and the house made $10 — 3/4 of a cent plus 1/4 of a cent for commission (equaling 1 cent), times 1,000 bushels.

“These ‘bucket shops’ flourish for the most part upon the patronage of men and women of small means who imbued with the get rich quick idea, venture or risk that which they can ill afford to and which, once being deprived of, entails hardship and privation upon themselves and their families,” noted the San Francisco Call (Jan. 4, 1911).

Bucket shoppers, or owners of these gambling businesses, often cheated by fabricating the exchange’s price quotes to their advantage to garner profits because patrons couldn’t or wouldn’t try to verify them. Some capitalized on their clients’ naiveté, encouraging them to repeatedly add money to their original stake. Others welched on paying out winnings.

One such San Francisco, California bucket shopper who found himself frequently in the news was Henry A. Moss. 

Eradication Efforts

In the late 1800s/early 1900s, numerous city and state governments banned bucket shops, including those of Chicago, Los Angeles, Missouri, New York and North Carolina. San Francisco outlawed them in 1911. In 1909, the U.S. Congress passed amendments — an Act to Prohibit Bucketing and Bucket Shopping and to Abolish Bucket Shops — to the 1901 Act to Establish a Code of Law for the District of Washington, D.C.

The federal statute “was enacted as a part of President William Taft’s war on the meanest of all the sure thing gambling systems,” reported the San Francisco Call (March 18, 1911).

Not only were bucket shops considered to be a gambling evil, but they also were blamed for contributing to the 1870s agricultural depression and the 1901 and 1907 U.S. stock market crashes because they created “a powerful concentrated interest for the depression of values,” (San Francisco Call, Feb. 4, 1892).

Sources

Photo from Acme Newspapers