The New York Stock Exchange, framed on the plan of the one in Philadelphia, was organized in 1817, but curiously enough this institution is in possession of a document bearing date May 17, 1792, signed by a number of Brokers, in which it is stated: "We, the subscribers, Brokers for the purchase and sale of public business, agree to do business at not less than one-fourth of one per cent." Medberry, in his "Men and Mysteries of Wall Street," describes early stock speculation in this country as follows: "When Washington was President, and Continental money was worth a trifle more as currency than as waste paper, some twenty New York dealers in public stock met together in a Broker's office and signed their names in the bold, strong hand of their generation, to an agreement of the nature of a protective league. The date of this paper is May 17, 1792. The volume of business of all these primitive New York Brokers could not have been much above that of even the poorest first-class Wall Street house in our time (1870). The Revolutionary shinplasters, as the irreverent already styled them, were spread over the land in such plenty that there were $100 to each inhabitant. Something was to be made, therefore, from the fluctuations to which they were liable. Indeed, one of the greatest Broker firms of subsequent years derived its capital from the lucky speculations of its senior member in this currency.

"The war of 1812 gave the first genuine impulse to stock speculation. The Government issued sixteen millions in Treasury notes, and put loans amounting to one hundred and nine millions on the market. There were endless

Aluctuations and the lazy-going capitalists of the time managed to gain or lose handsome fortunes. Bank stock was also a favorite investment. An illustration of one of the sources of money-making to Brokers at this period is found in the fact that United States 6s of 1814 were at 50 in specie and 70 in New York bank currency.

"In 1816 one could count up two hundred banks with a capital of $82,000,000. One day in 1817, the New York stock dealers met in the room of an associate and voted to send a 'delegate' over on the stage line to investigate the system adopted in the rival city (Philadelphia). The Philadelphia visit was successful; and the draft of a constitution and by-laws, framed from that of the Philadelphia Board, received the final approbation of a sufficient number of Brokers to enable the New York Stock Exchange to become a definite fact. Three years after, on the 21st of February, 1820, this preliminary code of rules received a thorough revision and the organization was strengthened by the accession of some of the heaviest capitalists in the city. Indeed, with 1820, the real history of the Exchange may properly be said to commence."

In Europe stock speculation historically was marked with white stones by the "Tulip. Craze," the South Sea Bubble, the John Law inflation in France, and later by the wild speculation in Kaffirs.

In this country for more than half a century stock speculation had its basis in the securities of the steam railroad. It has ebbed and flowed with the promotion, construction, decline, and reorganization of that industry.

In the last decade speculation has been fostered by the

"industrial proposition," which has resulted in offering to the public shares of industrial corporations. Not an industry has been passed by. Like the railroad the industrial corporation is destined to have its periods of promotion, construction, decline and reorganization. It will not be difficult for the reader to determine which period he has under immediate consideration.

CHAPTER II.

STOCK SPECULATION.

For many years stock speculation has been of national and absorbing importance. During the period from 1896 to 1902 investment and speculation in corporate securities attained an unprecedented importance, owing to the general movement to combine and incorporate industrial companies with a consequent change of ownership. Ownership which had been vested in small groups of individuals now became widely distributed. Where an industry had been controlled and owned by 10 persons the number multiplied and increased by 10 and 1,000-fold through the medium of share ownership. The mine and the factory owned by the individual were merged into a joint corporation, the shares of which were listed on the Stock Exchange, and offered to the public for investment or speculation. The United States Steel Corporation has more than 40,000 stockholders; the American Sugar Refining, 11,000; while other corporations, notably those representing the railroad, are relatively as widely distributed. Stock speculation in the United States in the period named was also inspired by the rehabilitation of the railroad industry, the stocks of which have always been favorite speculative fuel, and the basis for the intense public interest and activity was the general prosperity and wealth of the country. A vari

ety of causes contributed to the tremendous increase in national wealth. To-day, speculation in the shares listed on the New York Stock Exchange is not only confined to New York but extends to California on the West, Canada on the North, Texas on the South and London, Paris and Berlin on the East. The telegraph, telephone and cable wire transmits quotations to facilitate speculation to-day with a speed and perfection of method that would have been regarded as marvelous by the founders of the New York Stock Exchange, and quite impossible by the great manipulators who dominated the arena a quarter of a century ago. Millions of dollars are consumed annually in order to keep the machinery of Wall Street in working order. It is estimated that the annual expenses of 300 leading Wall Street stock firms approximate $15,000,000. In view of the commercial and economic tendencies of the times, the indications are that stock speculation will continue to play a highly important part in the country's trade. In 1901 there were days when dealings on the Stock Exchange exceeded 3,000,000 shares and the machinery of speculation threatened to break down under the intensity of the strain to which it was subjected. Whether the records of that year will ever be broken no man can foretell, but it is reasonable to say that not for a long time will interest in the daily changes of the stock market be confined solely to the ranks of the professional stock speculator who conducts his operations within stone's throw of the Stock Exchange, for there has arisen a vast army of investors and speculators who are deeply interested in the day's price fluctuations.