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.

CHAPTER III.

STOCK SPECULATION AND GAMBLING.

Is there any difference between speculation and gambling? The terms are often used interchangeably, but speculation pre-supposes intellectual effort; gambling blind chance. Accurately to define the two is difficult; all definitions are difficult. Wit and humor, for instance, can be defined; but notwithstanding the most subtle distinction, wit and humor blend, run into each other. This is true of speculation and gambling. The reform has some elements of chance; the latter some of the elements of reason. We define as best we can. Speculation is a venture based upon calculation. Gambling is a venture without calculation. The law makes this distinction: it sustains speculation, and condemns gambling. All business is more or less speculative. The term speculation, however, is commonly restricted to business of exceptional uncertainty. The uninitiated believe that chance is so large a part of speculation that it is subject to no rules, is governed by no laws. This is a serious error.-Unknown writer.

Is a broker a trader, a speculator or a manipulator a gambler? Or are all four gamblers? An old speculator takes this somewhat humorous view of the question: "I am not a gambler-the broker is the gambler-I am the lamb, unshorn it's true, but nevertheless the victim of a

bad habit. If I enter a gambling house and make a few wagers I would resent the imputation that I was a gambler. I am not a gambler or at the worst only an amateur at the game and then for a few minutes only. The man who backs the game and runs the gambling house is the professional gambler. Now the broker occupies much the same relationship to the stock gambling game that the man with the cards and wheel does to his peculiar trade. Of course behind the stock broker there is the manipulator and the game itself. The broker does not lose out his own money unless he 'buckets' his orders (when he is a gambler as is every bucket shop operator) so he is only a 'croupier' so to speak, for the game. A stock speculator whose only source of income is stock speculation on a margin may fairly call himself a gambler."

Speculation and gambling, as the words are used to-day, are substantially interchangeable, but nevertheless there is a marked distinction between the two. All speculators are not necessarily gamblers, although all stock gamblers (traders) are speculators. When speculation in stocks becomes gambling in stocks, the operations are usually confined to transactions made on a margin.

For example: A walks in a broker's office and asks: "What do you think of the market?" "We hear," is the reply, "that St. Paul is a purchase at the opening for a rise of several points." "Very well, buy me 100 shares, sell at 2 points profit and stop the loss at 1 point." Obviously this is a wager in which the gambling factor is very strong and the maker regards himself as a gambler.

Example No. 2. B enters the same office, asks the same

question, receives the same reply and says: "Very well, buy me 100 shares, send the certificate to my office and I will give you a check for it." B buys his stock outright and would not buy a single share on a margin. He will admit that he is a speculator, but will be insulted if you call him a gambler.

Example No. 3. C is a trader and an Exchange member. Ask him his business and he will reply that he is a trader. Ask him to define a trader and he will say: "As far as I am concerned a trader is a gambler. I never go home long or short a share of stock. I take advantage of the smallest changes in the market limiting my losses to the minimum-1gs and 14s-and take equally small profits, although I am glad to get larger ones. I excel at calling the successive changes, trade on either side, and have no pronounced views as to whether it is a bull or bear market."

All bucket shop operators and traders are gamblers.
Investors are not gamblers.

Brokers and manipulators are not necessarily gamblers, the circumstances governing individual cases.

The case of B will doubtless cause discussion, but his view is that he is no more a gambler than the man who buys a parcel of real estate on a 10 per cent. equity or the merchant who buys and sells goods in expectation of a rise or fall.

But stock speculation does not owe its importance to the classes of speculators enumerated as closely allied to the gambler. On the contrary they are in the minority. Gambling may at times be an unavoidable accompaniment of

stock speculation, but stock speculation is so interwoven with the money market and the commerce of the country that to eliminate it from the world of business would be for civilization to take a long backward step.

Criticism of stock speculation as of other trades, arts and sciences, to be intelligent, should be discriminating. Pulpit and press at times denounce stock speculation as if the Stock Exchange and Wall Street were hotbeds of corruption.

No well-informed man questions the usefulness of the Stock Exchange or stock speculator. Stock Exchange prices register values and the state of trade, precisely as a thermometer registers heat or cold. The stock market is the most highly organized and delicately adjusted market in the world. It offers to the public at large securities which are good collaterals at any bank and securities which on any business day can be sold for cash. It gives the money market great elasticity. It is a safeguard provided for unexpected demands upon the money market, and furnishes a medium of exchange that minimizes the use of gold in international operations. It is a most important part of the modern system of credit. Eliminate the stock market and transferable securities from the life of the country to-day and contemplate if good can be the result of a demand from Europe for its credit balances to be paid in gold. The result would paralyze industrial progress. The Stock Exchange facilitates the employment of capital, adds to its productiveness, is an accurately registering machinery of credit indispensable to the banks of the country, and is a guiding force for the merchant and financier.