three persons to organize a corporation; and as each body had at least that number of members, if not more, it would seem but natural that a certificate, or some other substantial muniment of title, should have been issued by the corporation to its respective members, in which the proportion of interest of each in the capital or corporate property of the association appeared. But whether a certificate was, in fact, issued, and, if so, was regarded as property capable of sale or other negotiation, and of vesting in the representatives of the owner, on his decease, or whether the corporations were all of the nature of guilds conferring upon the members mere personal rights-all of these questions seem now to be incapable of solution; and the Roman law, which sheds such floods of light upon commercial subjects apparently leaves the above matters in total darkness."

In England, in 1770, Lord Mansfield in a case wherein it was contended that stock certificates were money decided against that view, saying: "This is a new species of property arisen within the compass of a few years. It is not money."

The Stock Exchange or Bourse in its present use is a modern creation. Brokers and dealers in stocks and merchandise dealt together in an exchange in Cornhill, London, in 1670, or thereabouts. In 1698, the Stock-brokers of London obtained quarters for their exclusive use.

The first Stock Exchange formed in the United States was that of Philadelphia, where a Board of Stock-brokers formally organized and adopted a constitution in the early part of the eighteenth century.

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

fluctuations 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