I did it with two pads. Start the first level, go forward and take out the first two goons and bring back a dustbin or two to the start of the stage, where the screen won't scroll.
Now, have the dummy character hold the bin just in front of Knives, and try to get a rhythm down of pressing Y on the holder's pad, and B on the catcher's pad just after. It'll take a few goes and then it should click, and you can pass it back and forth.
You should be able to get the timing down by looking at the sprites. When I did it, they were just far enough apart that I could press B just as the trash can was leaving the other character.