from daily hazards in the stock market. He is, as might be expected, of the opinion that as an active trader he is free from disadvantages with which the outsider has to contend.

But it may be held that not all traders may become members of the Stock Exchange and that to become a "trader-broker" requires qualities of temperament not always to be found in successful speculators who are not Exchange members. And the outsider may hold that, given capable brokers, a quiet office, a ticker and the news of the day, and his advantages will more than offset those of the Exchange member. In the first place he will prefer a quiet office to the babel of voices and confusion of the Exchange floor. Absolute quiet may be to him a foremost consideration. Secondly, he sits alongside the ticker from which position he can study purchases and sales, supply and demand and market tones, factors that call for careful study by the professional trader. The time lost in the execution of his order he regards as more than offset by the condition which enables him to calmly read the tape and draw rapid conclusions as to the significance of the transactions so quickly printed.

Yet another consideration is that which comes from trading in an office receiving good market gossip, calculated to influence prices. Thus one office may possess very substantial advantages over another. It may be represented on the floor by brokers clever enough to keep the office informed of the Board Room gossip and news; it may possess superior sources of news information, such as newspaper financial writers occupying desk room therein

or close relationship with this or that powerful speculative or banking faction or clique. The successful outside trader knows that market activity on his part must be accompanied by quick decision, the possession of correct market judgment and the entire day at his disposal.

Men rather than markets differ. The experience of traders suggests the conclusion that as each trader has a different temperament, arriving at conclusions from entirely different points of view, and calling for different conditions, each position (1) trading on the Exchange floor and (2) trading from a New York office in a favorable environment, has advantages and disadvantages which almost balance.

In this consideration of the questions involved the point of view prevails that each of the two brokers is an Exchange member. One executes his own orders, after which it costs him $1.12 to clear each 100 shares of stock, while the other intrusts the execution to another member and the net cost is $3.12 per 100 shares. The floor trader, therefore, has a $2 advantage on each 100 share trade. Should the outside trader not be a member of the Exchange his commission bills will place him in this position: The board member holds a $75,000 membership. Money is, say, worth 5 per cent. and therefore his initial expense is $3,750 per annum. To be even with the game he must net that sum in any one year, plus his clearance bills. The outsider starts without any fixed charge of this character. Should, however, the outsider be a very active or heavy trader his commission bills would soon exceed the expenses of the Exchange member. The aver

age trader, however, does not pay $3,750 a year in commissions. This question of expense is one to be determined by the individual trader, who should have no difficulty in arriving at the proper course to pursue.

To compare the number of successful outside traders with the number of successful Exchange member traders does not lead to accurate conclusions. The number of traders in the 1,100 membership of the Stock Exchange is of necessity limited, and the number of outside traders is many times greater, consequently the outsiders can point to superior numbers. But in comparing the accounts of 25 members and 25 outside traders the figures would-favor the members.

Consideration of the questions involved will lead to the conclusion that the outside daily trader, dealing from a branch office in New York or in another city, is at a round disadvantage as compared with the floor-trading member or the office-trading member.

The experience of Wall Street men, legitimate brokers and bucket shop proprietors, is that the outside daily trader (not an Exchange member) is rarely successful. He is reduced to the position of a bettor, heavily handicapped, and obliged to pay a fee of $25 on each guess, plus the interest on his account. It must be conceded, however, that the chances of failure of the occasional trader, who deals from a distance, are obviously not so great as those of the trader making daily ventures. Where the latter is almost absolutely certain to fail in the long run, the occasional trader occupies a very much safer position.

CHAPTER XXII.

TEMPERAMENT AND EQUIPMENT.

The man of phlegmatic temperament, who can lose without feeling mental depression and who can win without corresponding elation, is the man who is best adapted for speculation, provided he possesses the other necessary qualifications. It should not be understood, however, that the nervous temperament is not represented by many successful speculators; in fact the majority of speculators are very nervous men. Many of them are troubled with nervous diseases. The most successful stock speculators of the day are sufferers from nervous indigestion, attributable to worry and irregular habits in eating and drinking during periods of active speculation. There are speculators who are unable to eat during the Stock Exchange session; others can digest only the lightest and most digestible foods; others smoke and drink freely and do not eat, and still others, win or lose, eat heartily with unimpaired digestive organs. The advantage is naturally with the latter group, for such a temperament, with regular habits, makes far stronger vitality than is possessed by the extremely nervous man. A sound body makes a sound mind, and good health is a factor of importance with the speculator. One of the cleverest of the younger speculators on the Stock Exchange inherited his membership from his father,

also a successful speculator, and who died of a nervous disease which was in all probability attributable to the uncertainty of his trade. The son, who is essentially a moneymaker, rivaling his father, suffers from nervousness to a greater degree than his father, and at frequent intervals is obliged to leave Wall Street and travel for rest and recreation.

An unknown writer, considering the qualities essential to the equipment of a speculator, names them in this order: (1) self-reliance; (2) judgment; (3) courage; (4) prudence; (5) pliability.

"1. Self-reliance. A man must think for himself; must follow his own convictions. George Macdonald says: 'A man cannot have another man's ideas any more than he can have another man's soul or another man's body.' Self-trust is the foundation of successful effort.

“2. Judgment. That EQUIPOISE, that nice adjustment of the faculties one to the other which is called good judgment, is an essential to the speculator.

"3. Courage. That is, confidence to act on the decisions of the mind. In speculation there is value in Mirabeau's dictum 'Be bold, still be bold, always be bold.'

"4. Prudence. The power of measuring the danger, together with a certain alertness and watchfulness, is very important. There should be a balance of these two, prudence and courage; prudence in contemplation, courage in execution. Lord Bacon says: 'In meditation all dangers should be seen; in execution none, unless very formidable.' Connected with these qualities, properly an outgrowth of them, is a third, viz., promptness. The mind