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Author: 
 
 Quick, M.W. 
 
 Title: 
 
 Modern speculation, its 
 methods and effects in. 
 
 Place: 
 
 Titusville 
 
 Date: 
 
 [1 888] 
 
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 Business 
 DE55a 
 
 Q4 
 
 Quick, M W 
 
 Modem speculation, its methods and effects 
 in destroying values ^an address before the 
 New York state grange at Jamestown, Jan. 24, 
 1888 3 Titufiville, Pa. ^ 1888 3 
 
 cover-title, 34 p. 
 
 At head of title: Gambling in the products 
 of land and labor. 
 
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 GAMBLING IN THE PRODUCTS OF LAND AMD LABOR. 
 
 Qu^^Mj M. W 
 
 Modern Speculation 
 
 ITS METHODS AND EFFECTS TN DESTROYING 
 
 VALUES. 
 
 The only freedom I care about is the freedom to do 
 right; the freedom to do wrong I am ready to part with 
 on the cheapest terms to any one who will take it. 
 
 HUXLEY. 
 
 PRESS AMERICAN CITIZEN. TITUSVILLE. PA. 
 
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 MODERN SPECULATION. 
 
 An Address by M. W. Quick of Titusville, Pa., 
 
 Before the New York State Grange 
 
 AT Jamestown, January 24, 1888. 
 
 Speculation, as it is known to-daj^, is a creature 
 of American birth, and most of you have seen it grow 
 from a mere threat of existence, to the development 
 of a strength that enables it to reach out and exact 
 tribute from every branch of trade. 
 
 When I was asked to present this subject to you 
 it seemed but a task of an hour, but when T thumbed 
 the pages of its record the work before me assumed 
 proportions too vast to allow of comprehensive dis- 
 cussion in so brief a time. I have therefore confined 
 myself to turning a leaf now and then for the purpose 
 of giving you a hasty glance, and I hesitate at the re- 
 sponsibility which rests upon me, for I can unfold so 
 small a portion of the whole record to voiir vision 
 that I fear I shall not be able even to indicate many 
 of the darker pages which this record contains. 
 
 I shall make no effort to go into the moral aspect 
 of this subject, and that which I shall present for 
 your consideration will be confined strictly to the ef- 
 fect of this so called speculation upon the commercial 
 position occupied by the productive industries and 
 tlieir auxiliaries. 
 
 Soon after the failure of Grant & Ward, in May, 
 1884, and while the mutterings of the coming panic 
 were filling the air, a young man came to me request- 
 ing a loan of one hundred dollars, and offered as se- 
 
 t 
 
2 MODERN SPECULATION. 
 
 curity his diamond shirt studs. He had already spent 
 his inheritance in the oil exchanges, and now desired 
 the funds necessary to secure liis broker in the execu- 
 tion of an order to sell short, that he might thereby 
 be benefited by the decline in oil which he believed 
 was sure to follow. Failing to enlist my sympathies 
 in his effort to thus sell what belonged to others, he 
 went elsewhere and found a Kood ''Samaritan" who 
 bound up his— diamonds, and I next heard of him as a 
 heavy and successful operator in the ranks of those, 
 who, as shown by the oil exchange clearances, bought 
 and sold 44,000,000 of barrels of ^'oil" per day during 
 that month— an aggregate of 1,200,000,000 l)arrels— 
 more than live times the entire output from Ameiican 
 fields since the striking of the I )rake well in 1859, gave 
 the world a new light and a new industry. 
 
 In 1882 a system of cancellation was adopted by 
 the oil exchanges, through which clearance-house 
 sheets took the place of oil certificates, and these once 
 necessary representatives of value became useful only 
 in times when the balance of rrade between the ex- 
 changes and the outside world made it necessary to 
 receive and deliver oil certificates, and even this was, 
 to a certain extent, done away with by a custom of bor- 
 rowing and lending. Millions of barrels of so called oil 
 were, through this system, sold and bought by opera- 
 tors who had no property to sell, and no money to 
 pay for their purchases, and when the panic which was 
 precipitated upon the country during that eventful 
 May actuated operators with one desire to sell, a temp- 
 est swept the oil fields and the value of producing 
 property was so depressed that for nearly four yearg 
 the oil producers have been struggling to overcome 
 the effects of that storm. 
 
 The fact that the young man, whom I have 
 
 MODERN SPECULATION. 3 
 
 mentioned, soon leturned without money or dia- 
 monds to his legitimate vocation, may be of passing 
 interest; that lie was able, through such an invest- 
 ment, to sell oil without thought of delivery, and thus 
 to aid in crippling an industry which was at that time 
 unable to support its own burdens, is a condition 
 worthy of thought. No crime can be laid at his door; 
 he availed himself of the privilege which is open to 
 all, of operating without property; a system which 
 fosters and encourages uncommercial transactions; 
 one which nurtures panic and chaos, and carries a 
 blighting influence to the very base on which it rests. 
 But I am not invited here to t^ll you of the bur- 
 dens which producers of oil are called upon to bear, 
 but rather to call your attention to similar burdens 
 which you, as agriculturists, are supporting by your 
 industry. 
 
 In doing this I will show you as fully as time will 
 permit: 1st, the important position which your in- 
 dustry occupies in the commerce of the world; 2d, 
 the great enemy with which you have to contend; and 
 3d, the direction to which you must look for relief. 
 
 First of all, the impoitance of receiving a just and 
 fair compensation for the products of the soil, cannot 
 be overestimated. It is a matter of vital importance, 
 not only to the producer, but to every legitimat^^ fac- 
 tor in coujuierce throughout the land. No person en- 
 gaged in a vocation the pursuit of which tends to ele- 
 vate and better the condition of mankind, should for 
 a moment tliink that he is above the consideration of 
 this subject; and I may safely say that none of those 
 who have given due attention to the foundation on 
 which civilization rests can be indifferent to this im- 
 portant consideration. 
 
 •4 
 
 .4 
 
 This 
 
 is a commercial age, and the great 
 
4 MODERN SPECULATION. 
 
 question to you, as tillers of the soil, is: How 
 shall we obtain a just reward for our toil -an honest 
 market for the produce of that soil which our fathers 
 wrested from the wilderness? You want nothing 
 more; you will be content with nothing less! To answer 
 . these questions was the purpose of your organization, 
 and you are gathered here as representative produceis 
 of the Empire State, hoping to have some light thrown 
 upon this subject, and to be able to repc^rt to your 
 constituents that progress has been made towards its 
 solution. 
 
 The value of American produce gauges the circu- 
 lation of money among the American people. Not 
 only this; it decides the balance for or against us as a 
 nation in our commerce with foreign lands. Accord- 
 ing as this value is high or low, the avenues of trade 
 are crowded or deserted. It decides what luxuries - 
 yes! even what necessaries may be enjoyed around 
 four million farm firesides. By this value more than 
 three hundred millions of acres of cultivated lands are 
 made profitable or worthless, and the amount of com- 
 pensation for the labor of fully three fourths of our 
 population engaged in all the industrial pursuits, is 
 directly determined. 
 
 The pric^ received for your produce deterujines 
 what kind of food, what quality of clothing, what 
 nourishment for the sick, and what pleasure's you 
 can provide for yourself and for your loved ones at 
 home. It is this that marks the line beyond which 
 the merchant cannot advance; it defines fhe demand 
 for manufactured wares; it metes out the wages for the 
 mechanic's toil; it deter mines the traffic on the rail- 
 roads which pass your doors, and is indeed the very 
 heart's blood of commerce. 
 
 What is your condition as agriculturists, to-day ? 
 
 MODERN SPECULATION. 5 
 
 You have gone through years of depression, and have 
 seen them followed by years of greater depression. You 
 have entertained hopes of a brighter future, and have 
 seen the clouds gather with increasing darkness. The 
 tendency of your store has been to shrink year by 
 year. Your farms are declining in value; your hours 
 of leisure are shortening, and your ability to furnish 
 recreation for the mind and body, by travel and asso- 
 ciation with the people of the world, is constantly be- 
 ing curtailed. 
 
 In this depressed condition you find many other 
 branches of industry. By reason of your narrowed 
 incomes, one branch of commerce— the most import- 
 ant of all the branches— is in a state of partial paral- 
 ysis, and all the other branches, through this, are de- 
 prived of vigor. 
 
 Why is this ? Can you answer by merely refer- 
 ring to protection or free trade theories i By simply 
 pointing to statistics of over-production and under- 
 consumption ? By arguing upon the scarcity of money 
 or excessive coinage ( By deploring the excesses of 
 luxury or by writing sonnets on the sufferings of 
 want ? I do not hesitate to answer, No! This course 
 of reasoning may serve to divert the attention or 
 arouse the sympathies, but it cannot solve the prob- 
 lem. 
 
 Believing that I will find no opposition . among 
 (Grangers in the importance which I attach to this 
 class of producers, and the necessity of obtaining a 
 remuneiative price for their labor, I will proceed to 
 an investigation of the artificial systems which dictate 
 prices, and in go doing I am brought to the considera- 
 tion of what I stated to be the second division of my 
 subject, namely: the enemy which is, in my opinion 
 not only threatening, but destroying our commercial 
 
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>'*'•>-'*•• •'•«■■ 
 
 ^ MODERN SPECULATION. 
 
 life. That enemy I believe to be Modern Speculation 
 l^est, however. I may not be nnderstcul I wisli in the 
 
 eZZT V *"''•' ''' """" '"^ ^«"«^ "-^ *■--» 1^- 
 
 and Tt ,^"^'*"««*^ «I>««»Iation luis peopled 
 and developed o„r country. It bus tunnelled 
 our mountains and bridged our rivers. It has gone 
 forth and returned with the produce of all climes It 
 ha.s distributed abundant harvests throu.di succeeding 
 penods ot want. It has brought the antipodes to a 
 common center, and has been to commerce what steam 
 foTtW T ""-f^'''^^- ^ also believe in providing 
 for the future by purchases and sales un.ler contra,.ts 
 maturmg at a specified time. I can see n.any ways in 
 which such contracts may very properly be an infpor- 
 tant feature of legitimate commerce, and I would un- 
 der no circumstances ham,>er the sale of property for 
 speculative purposes, whether done by spot transac 
 tions, or by agreements f„r fut.ire delivery [ have 
 done and am willing to continue doing all in mv 
 power to promote, protect, and perpetuate such spe,?. 
 ula^on, and I claim that th.ie is nothing inconsistent 
 n following this by saying, that of speculation as it 
 IS known to-day I cannot find words to express my 
 condemnation I am here, however, for the purpose 
 of expressmg my views on , he subject, yet I fear that 
 my time is too short to enabl.- me to lay them before you 
 Ui such a n.anner as to insure your complete compre- 
 
 You all know that exchanges exclusively for 
 d«ihng in the principal products of th. soil " hav« 
 arisen m all the leading cities, and that '-bran h of 
 h es and "bucket shops" are swinging their signs i^^i 
 the smaler cities, and in nearly all , he villages th.tugh- 
 outthe land. The larger and more ostentatious of 
 
 MODERN SPECULATION. J 
 
 these institutions have assumed to dictate to the world 
 the price at which your products sliall be bought and 
 sold, while the smaller ones hold themselves in readi- 
 ness to execute orders through the regular exchanges, 
 or to become bankers in a commercial-gambling haz- 
 ard on the fluctuations. So irnixjrtant have these 
 exchanges become that whole pages of the daily 
 press are given to a nairation of their transactions, 
 while there are peiiodicals which are entirely devoted 
 to the interests of tliese speculative centres. 
 
 Before we go further let us see what are the nature 
 and purposes of an exchange. We may thus arrive 
 at intelligent conclusions founded upon analysis. 
 
 An exchange is a close coiporation-monopoly- 
 combinaiion. You have a voice in the administration 
 of the town, county, State, and National Government, 
 but you have none in the exchanges. They hold daily 
 sessions in which your i)ropeity is at stake, yet you 
 are not recognized as having even the right of peti- 
 tion. You represent the soil and its produce, yet the 
 exchanges monopolize the (commerce growing out of 
 your industry. Their doors are (closed against the 
 producers, the transporters, the exporters, and the 
 consumers. The autocrats who hold this business in 
 their hands would as soon think of asking you as to 
 the quality of wines which they shall serve at dinner, 
 as of consulting your interests in the transactions 
 founded upon your products. An exchange is sepa- 
 rate and distinct from the balance of the community, 
 making its own laws, rules, and regulations of trade. 
 It has power to enforce these rules and laws among 
 members, but no court has yet been found that will 
 enforce contracts of this nature. So far as the statute 
 laws are concerned they are evaded or rendered inop- 
 erative. The very existence of property can be, and 
 
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 o MODERN SPECULATION. 
 
 W ^?*/***°* '"' '^•"^ '"^ their buying and sell- 
 ing and If you are an aggrieved party in one of these 
 transactions, the one in default can "defy the courts. 
 
 JMow an association of this kind becomes a petty 
 monarchy in itself, which, within its province, exerts 'a 
 greater power than the Government under whi<.h it 
 exists. Do you aslc me how 'i In the power to make 
 laws which are more potent than common law, com- 
 naercial law, and the laws of equity an.l justice. In 
 the power to make laws which protect those who are 
 members of the association, but to whi.A no other 
 portion of the community have an appeal. 
 
 I say an exchange can do all this and prohibit 
 from becoming members all who do not sign its com- 
 pact. I do not say that it does make .such laws- I 
 say It can. By its work let us judge it. 
 
 It would take too much time for me to give you 
 an adequate idea of the whole speculative business :ts 
 conducted under exchange rules, and I will therefore 
 confine myself to its influence on one .ommodity- 
 wheat. When I have told you how these close-corpo- 
 ration laws have by their influence degraded the traffic 
 in this one great food staple, you will have heard the 
 story of modem speculation, not only in wheat but in 
 cotton, corn, pork, and all the leading products of a-- 
 ncultural industry, as well as in shares of mining an.l 
 railroad stocks, petroleum, metals, and last, but not 
 least, in silver bullion. 
 
 ^ I learn from the New York papers that the sales 
 of wheat in the Produce Exchange of that <itv, during 
 
 ^ Z^^u"' ?'''^'"'^^'' ^^'' ^^gregated abm.t 260,- 
 000,000 of bushels. Of this amount 3,600,(kjo busheLs 
 were cash wheat, or sales for immediate delivery, the 
 balance, 166,400,000, were sales on future contracts. 
 Wow this is li per cent, of the real to 9^per cent, of 
 
 MODERN SPECULATION. 9 
 
 the unreal. There was an election day, Thanksgiving 
 day, and four Sundays in this month, leaving twenty- 
 four business days. The figures given, then, sliow 
 sales eaoh day equal to the yearly product of the Em 
 pire State, and more than twenty times the average 
 monthly exports from all our ports, including tiour 
 reduced to wheat equivalent. 
 
 This, understand me, exhibits the operations of 
 one exchange in the wheat business and includes no 
 branches or bucket shops. 
 
 The 3,600,000 bushels reported as the actual cash 
 transactions for the month, weiv equal to 9 j^tr r(-nt. 
 of the visible supply, and when we take into consider- 
 ation the widespread distribution of this supply, and 
 the equally wide distribution of the exchanges, this 9 
 j}er cent, would not seem to be far from indicating the 
 true relation which the Produce Exchange occupies, 
 as among all the exchanges, in the gene?al speculative 
 business. As these figures furnish the onlv basis for 
 calculating the whole business. I will use them as they 
 are presented. Now if this 256 400,000 bushels sold 
 on future contracts is but 9 per cent, of the whole 
 sales of this nature, we are to make an effort to com- 
 prehend 2,800,000,000 of bushels as the sales foi- one 
 month in the regular exchanges. Multiply this one 
 month by twelve, and if every person in the United 
 States should quit eating wdieat, and if our ports were 
 closed against the export of wheat, it would take the 
 whole product— about 50(),00(),000 bushels per year— 
 for the next lifty-six years to terminate these contracts 
 in the property sold. 
 
 I need not ask you whether this is legitimate busi- 
 ness. The figures may be divided and sub divided 
 many times and still you would answer-impossibJ^^I 
 
 Now, there has been some legitimate buying and 
 
 2 
 
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 ^^ MODERN SPECULATION. 
 
 selling, as is shown by tliese statements. The 3 - 
 600,000 bushels were sales for cash, and some evidence 
 of property, no doubt, pa^s^ed from seller to buyer 
 This is trade, -business! And right here comes the il- 
 lusion to the great army of buyers. Their line of ar- 
 gument may be supposed to run like this: The wheat 
 business of the country is done in the exchanges, and 
 great quantities of wheat are bought and sold within 
 them. Ergo; all transactions in wheat are for wheat 
 But I think that I have shi.wn you by the foregoing 
 hgures that all transactions in wheat are not for wheat 
 and I now ask you to consider three propositions. 
 
 First. That future cotitructs neither begin nor 
 end in receipt or delivery of actual wheat; 
 
 Second. That future contracts are, in effect, an 
 increase m the apparent supply; and 
 
 Third. That future contracts are all-powerful in 
 fixing values. 
 
 To the first proposition- that future contracts 
 neither begin nor end in actual wheat-there may be 
 and no doubt are, exceptions, but in the overwhelm^ 
 ing majority of cases this is undoubtedly true 
 
 I- chanced to look at a New York Times of De- 
 cember 7th last, and there were sales recorded for th« 
 previous day of about 32,00o,000 bushels of wheat for 
 future delivery, nearly 26,000,0(10 bushels of which 
 v^ere for delivery next May. The same issue gave the 
 whole visible supply as about 40,000,000 bushels The 
 sales of this 26,000,000 were for JS^ew York delivery 
 yet New York never held that amount of wheat and 
 will lack many millions of bushels of having 'that 
 amount next May. Still we have the authority of the 
 ^ew York Times that this amount was sold for deliv- 
 ery during next May. These options certainly did 
 not begin with actual wheat. It is equally certain 
 
 MODERN SPECULATION. 11 
 
 that they will not end in actual wheat. To assert it 
 would be absurd. 
 
 There will be a settlement day in May; simply a 
 settlement day. If the sellers of wheat options control 
 actual wheat on that day, they will receive the differ- 
 ence in adjustment. If the buyers can buy enough 
 actual wheat to control the market, and to advance it 
 above the price named in their contracts, they will 
 dictate the price of settlement. You have no part in 
 this deal. The millions of sales are founded on the 
 idea of wheat, and are called wheat, yet they are not 
 actual wheat. The growers of this grain are to-day, 
 and have been for years, doing the hard work necessary 
 to furnish a foundation for the greatest farce known 
 to the woild, and for the support of an aristocracy 
 who conduct a travesty on commerce, the depressing 
 influence of which is felt in all branches of industry! 
 
 To the second proposition— that future contracts 
 are, in efi'ect, an increase of the apparent supply— I 
 ask your close attention, for hidden in this fact I see 
 the worm that has been blighting your prosperity. To 
 thoroughly trace the workings of this worm I would 
 be required to take you through all the avenues of in- 
 dustry; but this my limited time will not permit. 
 
 You know that it costs money to carry wheat. 
 Now the middle-men must carry this surplus of forty 
 millions of bushels in sight, and you are as much in- 
 terested in protecting this store in their hands as you 
 are in procuring a good crop, for the traffic between 
 them fixes the price for the product of your harvest. 
 The burdens borne by them are your burdens, for 
 your interests are advanced and depressed by the same 
 influences that advance or depress the value of the 
 surplus held between your granaries and the table of 
 the consumer. 
 
 I 
 
■i^mm^m a *«««*«k 
 
 ^^ MOBERN SPECULATION. 
 
 The legitimate expenses of carrviiiir the acti.al 
 wheat in sight are, the interest on the iiioner valiip. 
 the insurance, and the storage on 40,()()().(I(K) of bush- 
 els. On the bases of values now ruling, this aygregate 
 
 expense is about li cents per month/or 15 cents'^per 
 bushel per year. 
 
 The present apparent supply cannot be carried (or 
 less than .^500,000 per niontli. That is a burden that 
 will under all circumstances press down on the shoul- 
 ders of those who hold wheat; and when the sliouldt^s 
 get tired, the effort to get other shoulders to < ouie to 
 the relief of the aching ones tends to deprt^ss thn sell- 
 ing price. Now, if I can show you that future con 
 tracts increase the cost of holding wheat to the f„il 
 extent of the amount sold, I think you will have no 
 difficulty in coming to the conclusion that wheat 
 futures are as much of a burden on the shoulders <»f 
 the legitimate factors in th.' wheat business as though 
 they were actual wheat. 
 
 On De('< mbei (Jth, vNhen the 26,()(0,()(in of bushels 
 were sold - uhich I have shown you cannot be deliver- 
 ed -the spot price for actual wheat was 80i cents, and 
 May options were sold at 94 cents per bushel. Now 
 what was represented by this 4i cents per bushel 
 above the i>rice of genuine, spot wheat, that was add- 
 ed to lix the base for these May contracts ? I wish 
 that every farmer on the continent would give thought 
 to this question. An option sale of wheat whtch 
 can under no circumstances l>e terminated by the de 
 livery of wheat— which must, of necessity, l)e ad- 
 justed by the receipt and payment of differences-and 
 yet there is embraced in the price of this future con- 
 tract a pren.ium of 4i cents i)er bushel above the value 
 of the existing reality that gives it a name. 
 
 Now I venture the asseition that if there were nu 
 
 MODEKX SPECULATION. IS 
 
 expense connected with carrying actual wheat during 
 the existence of these contracts, this 4^ cents would 
 not be added. No ( ne would pay this ifnlf^ss it were 
 in lieu of the expense connected with carrying actual 
 wheat. It would cost (Ji cents per bushel to carry st(ued 
 wheat during the life of these con tracts, or J^ 1, 625. ( KM Uo 
 carry the 26,0()().0()() bushels sold on this (me dav. If 
 you wanted to carry this amount of wheat until May, 
 and believed that future contracts were the same as 
 actual wheat, because they would terminate on the 
 same basis of value, you would nodoub: have thought 
 it much better to cover the ex]»ense of this carr\in«^' 
 by [)urchasing fjitures at a premimn of si, Io.\(kM) than 
 to carry the actual wheat at an expense of JS 1,020,000, 
 for you would thus save the sum of So2o,(M)0. This 
 would seem to be a go(>d business enterprise; but when 
 you go behind the scenes and find out that the con- 
 tract wheat never existed, it becomes clear that while 
 there is an ap[)arent saving of JKr)2o,0(iO, there is em- 
 braced a consideration of s|jor).0()o for a service that 
 cannot be performed, it is for carrying a commodity 
 which does not exist, and the very fact that this ap 
 parent service can be secured at a price one-third less 
 than the gold value of actual service, is enough to 
 justify us in stani ping across its face in letters large 
 and plain, the word— counterfeit! 
 
 Now I want to draw your attention to the conclu- 
 sion which follows, for it is the vital point in the 
 argun]ent which 1 have been endeavoring to make. In 
 the first place, we find the figures which show thesales 
 of future contracts, ostensibly representing wheat, to 
 be so enormously in excess of any possible supply, 
 that our suspicions of their genuineness are anuised. In 
 the next place, we discover that the price of tliese 
 futures is at a figure so much lower than can be leo-it- 
 
 I 
 1 
 

 1^ MODERN SPECULATION. 
 
 imately acconnted for. that oiir suspicions ii re confirm- 
 ed, and we are forced to believe that they are counter- 
 feit and do not represent actual wheat at all Now 
 with these counterfeits upon the market, as good, or 
 even better for speculative purposes, than the genuine 
 and ur.derbidding for a pretended service the actual 
 value of the real-is not thn conclusion inevitable 
 that the burdens of carrying the surplus are thus in- 
 creased, and just as palpably too, as though the store- 
 houses of the country contained the fuli amount of 
 wheat that is represented by these contracts « Is not 
 this, in eflfect. an increase of the visible supply of 
 wheat even beyond the limits of comprehen8ion { 
 
 My third proposition-that future contracts are 
 all-powerful in fixing values- follows natuially Com 
 a consideration of my second: -If the pernicious effect 
 ot futures is to increase the ostensible supply beyond 
 the legitimate figure, then. b>- the inevitable law of 
 supply and demand, prices must arrange themselves 
 in sympathy with the superincumbent weight of this 
 supply-be it real or artificial -and the market price 
 thus forced far below its natural and legitimate 
 level. 
 
 I need not occupy your time in demonstrating 
 that values are sympathetic, and that a continued low 
 price for speculative commodities means a low price 
 for all farm produce. You cannot obtain a dispropor- 
 tionately higher i)rice for pork than for the corn to 
 produce pork; neither can you expect corn to bring a 
 higher mai'ket price than wh.at, for wheat contains 
 more nutriment than corn, and the world prefers 
 wheaten to corn bread. In like manne.- vou cannot 
 expect your farms to have n.,u-e than a productive 
 value as based on the market price of their yield You 
 cannot gain on the one hand what you lose on the 
 
 aODERN SPECULATION. 16 
 
 Other. Close observation and economical cultivation 
 may, at times, have enabled you to produce specialties 
 at a profit, but sooner or later you have found even 
 these to sink to a basis of poor pay for hard work. 
 
 The same general disregard for the limits of prop- 
 erty, and the same carrying of fictitious stores, exists 
 in the cotton exchanges, and in fact in all branches of 
 the speculative exchange system. 
 
 I did not intend to go beyond the effect of mod 
 ern speculation on agricultural products, but I desire 
 to say a few words in regard to the possibilities in the 
 so called speculation in railroad stocks, for the rail- 
 roads are so closely connected with youi welfare that 
 you cannot ignore them in consid.'ring the subject of 
 abnormal influences on the prosperity of the country. 
 Now, if the shares of railroad stocks can be sold 
 in excess of the possibility of delivery, then it follows 
 that one can, while controlling the majority of shares 
 in any particular road -and with them the manage- 
 ment—make sales for future settlement to such an 
 extent that he becomes interested in destroying the 
 value of the property, as a means of making his con- 
 tract sales profitable. This may be done by breaking 
 freight or passenger rates; by defaulting interest; by 
 passing dividends: by stock watering; by extravagance 
 and poor service. After the termination of 
 his contracts of sale he may become a 
 buyer, and manage the property, with an 
 eye on the coming day when he can punish 
 those who have dared to sell short. You can see that 
 speculation, as it is known, furnishes greater induce- 
 ments to run railroads for the benefit of the specula- 
 tive interests of their managers than for the profit of 
 the stockholders, or for the accommodation of the 
 public. It would be unkind to intimate that any of 
 
 
 'i 
 
■*«a»i 
 
 f/> 
 
 ^^ MODERN SPECriLATlON. ' 
 
 our great railroads are or hnv^ k 
 
 as an illastration. ^'''^ ''" ^"" ^^^^ ^rie 
 
 The Stock ExohangP of New YnrU v u 
 lative list Th^K. . .^ '^'^'^^^^c^tes on the specn- 
 
 «.e »,n '„, i:; 1 :;•■".;:■ »" -'--'^ ■•• - 
 
 changes,: He. "nZr "'T^ '"P"'""' "' ''- - 
 
 •--. an. ?i-\ to::: '^""^^"^^ '-• ^-'- -^,.0. 
 
 Plainly tha' Z Za^Ul TT •' "'^ ""^=" ^"^ 
 
 behind the scenes a J ' '■"^^'' '^" ''"'"'"^' »« *-'" 
 
 yonrselve,s ,r .0 V-'"'"". ''" """■'"""• '"'" 
 
 leads yon to L^;\t/:;;: ::^;^;—--'n 
 
 the produces o\ '^'•'^;''»^'^^-^>^- be of benefit ro 
 
 I'louuceis or to any of the facfor« ^c i ••• 
 eommerce-ves if v„„ ^ "'*^ '''"^rs of legitimate 
 
 . • ' y*" do not find Aforl».i... ij. i 
 tion a despot that ex-.r.t« , '"<i *lodeiu ^jH^cula- 
 
 that.etsan unins vT " ' '''* '"""^ ''^ "*" «»'! 
 pren.ises anc? 1 , "" '""' '"'"■^^■••-- ">>• -hole 
 
 vestiKation the r,*^^ :';::;;:/'-''"^ ''"'^ '"^ '■"- 
 
 and when vou havl." ^ '^"*^'""" '"■^i'^'' ""t. 
 in believi„r It he e"\ " •"" ""' ='-'^'^ ^-^" "- 
 all else to de t , ', ""T "" '"'"« "'"'- '"«" 
 into classef^savt ::•;"'' ^" '^'-'''^ '""' 1-ple 
 
 division vou are not the '""^'^'•'^-«"'l "'at in this 
 .>uu are not the masters. 
 
 If there is no remedv for th^ ^ j- 
 commercial (lise... -!"^''^ ^'^'^ ^^'^ eradication of this 
 
 «.. pan t :;:s ' : rrtr;':- " *"■■"" •■" 
 
 I" ;you Its insidious workings 
 
 MODERN SPECULATION. It 
 
 But there is a remedy. It is necessary, however, be- 
 fore explaining its nature that we thoroughly compre- 
 hend the disease. 
 
 I think you will concede that in some way it is 
 possible for the exchanges to violate commercial law, 
 or the fabulous figures, representing their transactions, 
 could have no existence. It is equally plain that 
 were there statute laws governing the peculiar busi 
 ness for the management of which the exchanges have 
 made their own laws, it would be i)alpably impossible 
 for them to set aside or to substitute such laws by 
 those of their ow n manufacture. The exchanges draw 
 their sustenance from the outsidf- world, and the mem- 
 bers of these organizations would be liable in actions 
 against them if, in ihe execution of contracts, they were 
 to disregard the exactions of law. 
 
 If this is so, it naturally follows that the enact- 
 ment of statute laws, defining what shall be legal con- 
 tracts for the sale of vouchers representing pioperty, 
 and making it necessary for the seller to deliver, or 
 tender these evidences of ownership in termination of 
 their sales, would draw a distinct line between the real 
 and the artificial, and put a stop to the so called sales 
 of billions of dollars worth of imaginary property, on 
 contracts that could not be legally terminated. Law 
 would thus take the place of rules, and the solid real- 
 ities of trade would occupy the position now held by 
 base imitations. 
 
 Such a law, to the legitimate buyers and sellers, 
 would not be embarrassing, for they are engaged in ac- 
 tual trade, controlling the means necessary for com- 
 pliance with its provisions. Legislation of this kind, 
 if attempted, will no doubt, by the exchanges, be 
 called hampering trade, but this I most emphatically 
 deny. It is legislation that every dealer ip the actual 
 
18 
 
 MODERN SPECULATION 
 
 theg^in which has be IZtwi:: .r '''" *'" 
 and enrich the nation. '^^'''^ '" '«"^ ""^y grow 
 
 of .ht.'^ln!""'/"""' '^"'"- ^ *^«-"^'> ''™ 
 
 of New To k dXVr" '"'"'""'^'^ '"^« '»>« «--te 
 
 Senate bm No ""l ^tr"\f T"" '^'"^ ^'"- 
 
 ni.ttee and on the floor of the Senate r I T' 
 
 body hravot^ ,.* m * , senate, ft passed that 
 
 an.1 Lf .1. ® ^^ ^^y importance to them 
 
 tion, ^ subject to your atten^ 
 
 MODERN SPECULATION. 10 
 
 In meeting this question you cannot afford to meet 
 it as partisans; you must meet it with an undivided 
 front, demanding the greatest good to all. 
 
 Will you thus unite in demanding that there shall 
 be a law to regulate the buying and selling of your 
 produce '( 
 
 Will you insist upon lawful contracts, which, if 
 violated, can be enforced by courts that are open to 
 every citizen ? 
 
 Will you insist that property shall be necessary 
 in the speculation that establishes the standard of 
 value of your labor, your soil and its products ? 
 
 Will you demand that there shall be no more ar- 
 tificial expansion of the accumulated stores, and that 
 the rules of the exchanges shall no longer nullify the 
 laws of the land ^ 
 
 If you answer yes, then I have not occupied your 
 time in vain, for you will rise in your might and be- 
 come masters of the situation. You are not alone the 
 sufferers, and when your strong arms shall have open- 
 ed the highway, an irresistible army will be seen 
 marching on demanding the same law for slave and 
 master; the same law for plutocrat and proletarian. 
 
20 
 
 MODERN SPECULATION. 
 
 RESOLUTIONS. 
 
 At the close of this address the ara„ge teu.le.ed 
 a vote ol • thanks to Mr. Quick wh.ri the f„ll.,winf. 
 les )Iiitions uere unanin.onsly passed: 
 
 Whereas The dealings .„ the products „f „gricul,nral irKlusfv 
 
 u";!-2ebeit '"''' '"^ P™''-''- -'-tries of the .tate. 
 
 Resolved. TImt we demand of our Leuis|..,,.r„ .1, 
 surh laws a« will ^ 1 i^KisUluie the enaotuient of 
 
 8urn la«s as «,ll make prop.rty necessary in the tern.mation of .11 
 contracts l)ased on ceriifl,-^.... . . "^nnindtiori of all 
 
 . '"'*''*"'«*"l"«n<-'<'»."'- other evidence- of 
 
 property and we recon)mend for their fi.rth... • , ""^'"''^ "* 
 
 introduced in ifin'; ,1 , '"'^"^ ""^'*"'' '"nsideration the hill 
 
 J^ Wu<ed m 18«o, then known as Senate Bill No. 72. and further 
 
 teo?,rd. That we as representatives of the farming in.lus.ries 
 ■ hllrestdZ " '"' '■"^^"^-f ~- ^or the acc.nplishn.ent of 
 
 FULL TEXT OF THE BILL REFERREi; TO. 
 
 An AtT-ReguI„ting contracts for the purchast- and 
 sale of stocks, certificates, receipt., o, other evi- 
 ciences of property. 
 
 Section 1-Be it enacted, etc., that it shall be the 
 duty of every person, partnership, and corporation 
 ^aktng any contract for the sale, or any tt-aLsa-tic n 
 based on he present or pr,>spective value of any 
 shares of the capital sr.,ck of any corporation or o ' 
 any property delivery whereof is to U. m,a. bv de 
 hvery ot written, or printed, or partly written" and 
 partly printed, certificates, receipts, aleptanlsl^. 
 ohe,^ evidences of title to or liability for the delivery 
 01 the property therein specified, made or issued b; 
 any person, partnership, or corporation having the .-us 
 tody, possession or control of such property, To deliver 
 
 MODERN SPECULATION. 21 
 
 at the time or during the day of the making of such 
 contract, surh certificates of shares, receipts, accept- 
 ances or other evidences of title to or liability for the 
 delivery of the property therein specified, or furnish 
 the buyer with the serial numbers and dates of such 
 certificates of shares, receipts, acceptances or other 
 evidences of title to or liability for the delivery of the 
 property therein specified, respecting which such con- 
 tract of sale is made, and which are to be delivered in 
 fulfillment of such contract. If no time is .specified in 
 such contract for the delivery of the thing sold, the 
 time for making such delivery, or for furnishing the 
 serial numbers and dates, shall be at the time, or dur- 
 ing the day of the making of the contract. Provided: 
 that, if by the terms of any written, or printed, or part- 
 ly written and partly printed contract of sale, delivery 
 of the thing sold and res])ecting which such contract 
 is made is fixed for some future time, the time for 
 making delivery of the same, «.r for furnishing the buy- 
 er with the number and dates as aforesaid, shall be at 
 the maturity of the contract, but not later. 
 
 Section 2— Neither party to any contract of sale 
 falling within the provisions of this act shall have 
 power to waive the delivery or identification of vouch- 
 ers by numbers and dates as specified in Section 1. 
 No evidence of any such waiver shall be admitted 
 upon any hearing or trial in an v suit or proceeding 
 upon any such contract, or in which any such contract 
 is in any manner involved, and no rul^. by-law, reso- 
 lution, or other action of any board, partnership, cor- 
 poration or other association shall waive or nullify 
 any of the provisions of this act. 
 
 Section 3— If any person, partnership, or corpora- 
 tion, making any contract of sale such as is specified 
 in the first section of this act, shall fail to comply with 
 

 22 
 
 MODERN SPECULATION 
 
 sm-H K,. ^ ^^ ^^ ^^y contract as afoiv 
 
 breach of contract. J^n^diction of actions for 
 
 memtrsnr"" ^""^ P''"'*'" "^ persons, member or 
 
 Inlf nf or. " **'^"'" '^'^n behalf, or on be 
 
 iialf of any person, co-partnership assooiat nn 
 
 poration, any contract of sale such asT ?■' """" 
 and specified in the fi.t JZ^^ th s ct'^r' 
 sell, repledge, or make anv new contr^nt f w "" 
 or pledge of any certiHeate ^f shares rln^ '"'' 
 ances or other eviden<-es of ^5^1. , ^*'' '"'"'^P^- 
 
 nishirig the dates and numbers of th! . ^''" 
 
 in th^ «« ^ . """Jueis or tne same as direot^H 
 
 in the lirst section of this art tr.^ • ^ . directed 
 
 . «r cms act, knowingly give or use 
 
 MODERN SPECULATION. 23 
 
 any false, fictitious or fraudulent date or number, such 
 person or persons, member or members of any co part- 
 nership or association, officer or officers of any corpor- 
 ation, shall be guilty of a misdemeanor, and on con- 
 viction shall be sentenced for every such offense to 
 pay a fine not exceeding one thousand dollars and not 
 less than one hundred dollars, and be imprisoned for 
 any term not exceeding one year. 
 
 ANALYSIS OF THE BILL. 
 
 This bill has been submitted to lawyers of high 
 standing for legal criticism. It has been carefully ex- 
 amined also by experts in modern speculation as con- 
 ducted through the medium of the exchanges; and in 
 each instance, it has stood the test. In the following 
 analysis, nothing is assumed or stated that facts and 
 figures have not established beyond question. 
 
 The measure applies only to the purchase and sale 
 of stocks, elevator and ware-house receipts, pipe-line 
 certificates, or vouchers representing property, which 
 are to be delivered in lieu of the property itself. 
 
 SECTION ONE. 
 
 Provides that it shall be the duty of every person 
 * making any contract for the sale of any 
 shares of stock, or of any property delivery whereof is 
 to be made by delivery of written or printed certificates 
 * * * to deliver at the time, or during the day, such 
 certificates * * or furnish the buyer with the serial 
 numbers and dates of such certificates ^^ * for the 
 delivery of the property therein specified, respecting 
 which such contract of sale is made, and which are to 
 be delivered in fulfillment of such contract— or to be 
 more direct and pointed— to guarantee that the trans- 
 action is bona fide, a purchase and sale, with all the 
 
 * •» 
 
1-* ' 
 
 24 MODERN SPECULATION. 
 
 elements of legitimate business attached, and devoid 
 of every semblance of gamblins: 
 
 If by the terms of any contract, delivery is fixed 
 at a future time, the maturity of that contract shall be 
 
 governed by the same conditions as regular trans- 
 actions. 
 
 This reduces every transaction to a regular basis, 
 and brings every contract to a legal, busiuess termina- 
 tion. For, under the law, the seller may not expose 
 for sale a commodity that is not within either his pos- 
 session or control, and the buyer should be ready with 
 the means to p^.y for that commodity, without any 
 hope or design of settlinff differences by the aid of 
 •'Wash Sales" and clearing-house legerdemain. 
 
 SECTION TWO, 
 
 Provkies, That neither party to any contract of 
 sale ^ ^ * shall have power to waive any of the 
 provisions thereof relative to delivery or identification 
 of vouchers by members and dates. No evidence of 
 any such waiver shall be admitted upon any hearing 
 ortTiaHn any suit pending upon any such contract 
 and no rule, by-laws, resolution or other ac 
 tion of any board * ^ ^ «hall waive or nullifv any 
 of the provisions of this act. 
 
 Under this section, exchanges are brought under 
 the jurisdiction of courts so that members of such bod- 
 ies cannot evade the law of the land by acknowledg. 
 ing alone the authority of an exchange. 
 
 Why should a member of any exchange, organ 
 ized under the law of tlie land, possess more power 
 than a private citizen, both supposed to be dealing in 
 like commodities under equal laws? 
 
 Buy a thousand bushels of wheat of a farmer or 
 merchant, an absolute delivery is necessary to com- 
 plete the contract. 
 
 MODERN SPECULATION. 25 
 
 Buy a thousand bushels of wheat cf a member of 
 an exchange, you only get or pay the difference be- 
 tween to-day's market price and that of to-morrow. 
 
 There is nothing real in this latter transaction. If 
 the market goes in your favor, you get something for 
 nothing. You gain, some one else loses. 
 
 Two persons sow, one only reaps. The members 
 of the exchange annihilate the profits of production, 
 and in the end, after paying interest, exchange and the 
 hundred and one el ceteras, confiscation, poverty, and 
 the worst form of slavery must follow. Production has 
 to stand the drain and is relieved of none of its accumu- 
 lations or surplus. The system fosters a spirit of gam- 
 bling detrimental to good citizenship and creates an 
 army of idlers, "They toil not, neither do they spin, 
 and yet I say unto you that Solomon in all his glory 
 was not arrayed like one of these." 
 
 Liberty, in the formation of contracts, is not only 
 recognized, but substantially guaranteed by the pro- 
 visions of the bill. License— that miserable counter- 
 feit of liberty— when used to destroy honest barter, is 
 restricted in the first instance; and, if persisted in is 
 punished. 
 
 The courts are thrown open to the injured party, 
 where he may recover in an action at law, without 
 fearing the rules of the exchanges, or of being out- 
 lawed as a gambler. 
 
 Any one studying the history of the modern ex- 
 changes, and their legitimate offspring— "the Bucket- 
 Shop"— will appreciate the necessity of this measure, 
 which, after all, aims at nothing more than the resto- 
 ration of trade to its normal condition, upholding 
 honesty in the buying and selling of commodities, and 
 consigning the gambler and his vices to the fostering 
 care of an outraged law. 
 
26 
 
 MODERN SPECULATION. 
 
 ^ 
 
 SECTION THREE, . 
 
 Provides, If any pejson making any contract of 
 sale, such as is specified in the first section of the act, 
 shall fail to comply with the requirements of the same,' 
 he shall thereupon become liable to the buyer for all 
 damage and injury sustained and suffered by said 
 buyer, by reason of such default. And if anv person, 
 making any contract of purchase, such as is ^specified 
 m the first section of the act, shall fail or refuse to 
 receive the certificates of shares or other evidences of 
 title to property therein si»ecified, bought under such 
 contract, when tendered in fulfillment of the same, he 
 shall become liable to pay the seller all loss, damage 
 and injury sustained by said seller, by reason of such 
 default. Any loss, damage or injury sustained or suf- 
 fered by either party, under any contract as aforesaid, 
 by reason of the failure, refusal or default of the other 
 party to the same, may be recovered by such injured 
 party in an action at law, to be sued for in any court 
 having jurisdiction of actions for breach of contract. 
 
 SECTION FOUR, 
 
 Provides, If any person or persons shall have 
 made by themselves or agents on their own be^half, or 
 on behalf of any co-partnership, any such contract or 
 sale as is mentioned and specified in the first section 
 of the act, shall re-sell or re-pledge or make any new 
 contract for the sale or pledge of any certificates of 
 shares or other evidence of property, such as are men- 
 tioned and described in the First Section of the act, 
 while any previous contract for the sale or pledge of 
 the same is in force or unexecuted, or shall, in furnish- 
 ing the dates and numbers of the same, as directed in 
 the First Section of this act, knowingly give or use 
 any false, fictitious or fraudulent date or number, 
 such person shall be guilty of a misdemeanor and on 
 
 MODERN SPECULATION. 27 
 
 conviction shall be sentenced, for every such offense, 
 to pay a fine not exceeding one thousand dollars and 
 not less than one hundred dollars, and be imprisoned 
 for any term not exceeding one year. 
 
 This section simply designates the punishment 
 for the violation of any of the provisions of the law, 
 against the possibility of duplicating sales, based up- 
 on the same unit of commodity, without first making 
 a delivery. In other words, the penalties herein des- 
 ignated will prevent the transformation of "wind'^ or 
 ^ 'short" selling into bear arguments by the aid of 
 which, the laws of supply and demand are rendered 
 void and of no effect. Assuming this bill to have be- 
 came law, then the admonition to those in the trade is, 
 be honest in all your transactions, but, if you are not! 
 he who is injured by your gambling practices will, if 
 he knocks, find the courts open, and you if you be 
 guilty will find the prison open. A jury of vour peers 
 will determine what is justice in the premisis. The 
 issue is plain so that he who runs may read. 
 
 OBJECTIONS TO LEGISLATION. 
 
 The objections to Legislation that are worthy of 
 notice are confined to a narrow field, and may be brief- 
 ly stated: 
 
 First.— That the passage of laws regulating specu- 
 lation in any one State will drive business to some 
 other State where no such laws exist, and 
 
 Second. That speculation will be destroyed and 
 the surplus products thus thrown entirely on the hands 
 of the producers. 
 
 In meeting the first proposition it should be noted 
 that the proposed legislation does not in any way tend 
 to lay burdens on the buyers and sellers of actual 
 
 ^'t^i'JT* 
 
!•.■ 
 
 ti 
 
 K 
 
 ^^ MODERN SPECULATION. 
 
 property. Sellers with property at their command 
 can deliver the same; buyers for legitimate purposes 
 are prepared to accept their purchases. One havin- 
 vouchers for actual property would certainly not leave 
 a State in which the sales of property were protec.^d 
 in order to offer his wares in markets where their sub- 
 stance is of less consequence than their shadow; neith- 
 er would buyers for legitin.ate speculation seek mar- 
 kets where they could not enforce their contracts in 
 preference to buying where tlfere was a law for their 
 protection. It would be more logical to conclu.le 
 that the legitimate buyers and sellers would 
 seek to operate in those States where there were laws 
 enabling them to collect for damage on violated con- 
 tracts, and that commercial transaction."* would soon 
 be in the ascendency, relegating the operations of Ex- 
 changes under their own laws to pass to the rear ..f 
 those «ontroled by general laws to which all have the 
 right of appeal. 
 
 In reply to the second objection that speculation 
 will be destroyed, etc. : 
 
 It is clear that speculation, in the form that it has 
 ever performed a service to commerce, has been almost 
 if not quite destroyed and supplanted by systems un- 
 der which it cannot exist. All the evils pictured as a 
 result of the passage of law regulating contracts are 
 to-day a living reality by reason of the innovations on 
 speculation, and it is the aim of the legislation recom- 
 mended to clear the field for the growth of legitimate 
 speculation under the garb of which so much damage 
 has been inflicted on the industrial pursuits 
 
 *«>i ikrKT 
 
 mmr 
 
 MODERN SPECULATION. 
 CONCLUSION. 
 
 29 
 
 The direct effect of modern speculation on all 
 classes of produce has been to depress values until 
 there is little if any profit left for the producer; both 
 directly and indirectly to reduce the market price of 
 physicial labor to the lowest extreme, and to give over 
 the management of our railroads to those who manip- 
 ulate freight and passenger rates, dividends, ex- 
 penses, and net results and make their trusts second- 
 ary and subservient to their gambling ventures in the 
 exchanges. 
 
 By the sale of contracts maturing at future per- 
 iods at prices involving less expense than carrying 
 vouchers for property (as has been previously shown,) 
 contracts have become preferable to property, and tlie 
 latter is a constantly increasing burden. The realities 
 of trade are thus secondary to their imitation, and, a« 
 the sales of these realities establish prices, the super- 
 ior inducements offered for the puichase and sale of 
 the imitation, causes the genuine to take the lead 
 in a general and continued struggle for a lower 
 plane of values. 
 
 As a placer miner finds the wealth he seeks be- 
 neath the accumulation of worthless ujatter, so in the 
 speculative exchanges true values are constantly hid- 
 den by the fictitious, and this fictitious must of neces- 
 sity be removed before the concealed wealth can be 
 exposed to view. 
 
 The accumulation of the products of national in- 
 dustry has become the nation's curse. Industry and 
 thrift have brought a burden of poverty. Abundant 
 harvests have responded to the toil of the husband- 
 man, yet they have garnered who have not sown. 
 
 The continuation of modern speculation means 
 
T/i 
 
 30 MODERN SPECULATION. 
 
 universal depression in trade; markets crowded with 
 pauper abor; lower rents and rates of interest; cur- 
 ailment of stored supplies for future demand; and 
 the connnerce of the nation monopolized by trust and 
 combinations of capital that force tribut.: and live in 
 opulence, while the masses are struggling for bread 
 
 able hope that the exchanges will run their c-ourse and 
 
 and ^.ait for the dawn of a m«re prosperous era but 
 unfortunately these parasites on comnLe can dr' w 
 
 Sr 'IT""Z 7 '"''' "' '''' ^"^^ ^^^ ''-^--^-d with 
 Hie The withdrawal of the public still leaves the 
 
 -changes to dictate the value of the real commodi: 
 les, and m their struggles to market their substitutes 
 he general decline will continue. A commercial revo- 
 lution IS necessary in order to eradicate the evil and 
 when this revolution comes no one engaged in legiti 
 mate trade, m production, or that has an hour s labor 
 to market, can be a disinterested spectator 
 
 MODERN SPECULATION. 
 
 31 
 
 EXCIIAN(^E IVOMENC LATURE. 
 
 For the information of those who desire to study 
 Modern Speculation through the exhaustive reports 
 furnished by the press, explanations of the most fa- 
 miliar terms are appended. It will be seen by this 
 brief glossary that new* words were, in many instances, 
 absolutely necessary for the proper classification of 
 transactions which have come into existence through 
 the exchanges, and because the vocabulary of the 
 English language was too limited to furnish terms 
 adequate to express such innovations. 
 
 . Bear.-One who sells that of which he is not possessed, and 
 exerts his influence in depressing prices in order that lie may extort 
 money from the purchaser by buying back at a lower price. One 
 interested in depressin^j values. 
 
 Bear the lHarket.-To bear is to pull or weigh down, the 
 market. To ojierate upon the market by stalling, or agreeing to' de- 
 liver that which the seller dws not possess; to lower prices by ab- 
 normal influences, false rumors, "wash" sales and the application of 
 devices for destroying values. 
 
 Bucket Shop.— An exchange on a small scale which makes 
 no pretense of buying, selling, carrying, borrowing or lending spec- 
 ulative vouchers, the value of which forms the base for their trans- 
 actions—gambling transactions for the margins involved. 
 The bucket shops obtain their quotations, and follow the general 
 methods of business practiced in the exchanges, but their transact- 
 ions are not concealed by any portion of actual business. The bucket 
 shops could not run without the exchanges. 
 
 Borrowing and Leiuliiitf.-When one sells short, the vac- 
 uum thus made is filled by borrotciny from the longs. The one buy- 
 ing long is also required to provide for carrying his purcjiases by 
 lending them to others. Every short must have an opposite long. 
 A short can be a borrower and not receive property, and a long can 
 become a lender without lending property. The one who has bought 
 
^m^ 
 
 n^rr 
 
 32 MODERN SPECULATION-. 
 
 fiuldl 'Z'\ 't"" °" "'" ""^ '"•" """""« -1 »"« vacuum is 
 filled, the short charging and the long paying for a service that is 
 
 ho sen ) " t' ''°''"'^' '"''"'""■'' ^'^" - ■* '- -"• in the 
 ornhan "'"■•• ^"-«'> '"e competition among short sellers 
 
 and transactions mvolving no property become preferable. 
 
 Bull.-An exchange term for one who wager, a margin, or 
 buys for speculative purposes without receiving and retiring his pur- 
 chases, .. e. agrees with the seller, called a "bear" or "shorf " to take 
 a certain amount of stocks or property at a future time at a stated 
 pnce:, fat that day the market price has advanced he receives the 
 difference; ,f it has declined he pays the differen... ,>„e interested 
 .n advancing prices is called a hull. To bull is to exert influence to 
 advance markets. 
 
 Bu,er'» Opllon.-The purchaser of ^buyers option, thirty, 
 sixty, or ninety days, can demand that the seller make delivery at 
 the price agreed upon, on any day within that time, or the buyer 
 
 e, . opHon ,s generally at a fra.tion above the cash price. This frac- 
 t^rmrn^7\"'' Prioes, if the seller held property with which to 
 erm mate his contract, would be the compensation for storage, in- 
 terest, insurance, etc. 
 
 Call Conlract.-An agreement giving the buyer the privilege 
 ofdemanding the delivery of property within a specified time at a 
 
 t ol fofiT' " T ' ""■ """^ ""''' P"^^ » ™--y -nsidera- 
 tionforthe privilege of eaW„,g, at an agreed price above market 
 quotations. If the call is not made the contract expires, an., the 
 buyer loses and the seller wins the stake or sum paid for the privi- 
 
 Carryln^.-When a broker is holding a purchase for a custom- 
 er, becoming responsible for the same until ordered to sell, he is said 
 to be earryrng for his customers account. The broker, in filling his 
 order, may have become a short seller, charging brokerage when 
 no purchase ,s made, and ma, afterwards collect for interest and 
 storage on the supposed property held, when there has been no pur- 
 chase or ca,^yi„g i„ the transaction. If property is bought and 
 left ina.broker's hands itcanbe loaned by him to the shortsln^nak- 
 mg de iveries, or for depressing the value of the property entrusted 
 to his care. Through the disregard for property in carryina the 
 greatest additions of the substitute for property are made 
 
 MODERN SPE(;ULATI<>N. 33 
 
 Corner.— When a combination of buyers purchase a larger 
 quantity of any article than is known to be in existence, and by 
 continued buying advance prices for the purpose of forcing the 
 short sellers to settle at figures that involve a loss to them, the shorts 
 ars said to be cornered. The principal object sought in a corner is to 
 force the shorts to settte at a loss. There can be no comer when 
 there is no short interest. 
 
 Exchange.— An association of a limited number of persons 
 usually incorporated under the laws of a State, for the purpose of 
 dealmg in stocks and the products of land and labor. Through the 
 adoption of rules and by-laws for the government of the members 
 and transactions in the exchanges, the so-called contracts are not 
 regulated by law, nor have the parties to them any legal remedies 
 The great majority of transactions in the exchanges, being based on 
 margins and settlement of diflFerences through clearing-houses, are 
 gambling wagers upon the rise and fall of market quotations, and 
 lack the requisites of legal contracts in that they do not contem- 
 plate the purchase sale and delivery of actual property for an actual 
 price paid. 
 
 Flyer.-When one not a regular operator makes a gambling 
 venture on margins, or through the exchanges, he is said to take a 
 flyer. 
 
 Future8.-Buyers' and sellers' options. Speculative agree- 
 ments that terminate at a future time. 
 
 Forced quotatloni.-Qnotations are said to be forced when 
 two parties, with a mutual understanding, make fictitious transac- 
 tions above or below the market for the purpose of affecting values 
 See "Washing" and "Matching." 
 
 I.amb8.-The outsiders who contribute, by margins and other- 
 wise, to the support of the exchanges. Those that have not had ex- 
 perience in operating in the exchange. 
 
 Long.-When a buyer has purchased on tiaue, or leaves his 
 purchases to be carried by his broker, he is said to be long. The op- 
 posite of "Short.- One not having possession of his purchases 
 
 Hargin.- A sum of money pledged by a person operating through 
 a broker, or in a bucket shop or exchange, as security to provide for 
 his losses on adverse changes in the market quotations. Usually the 
 stake put up at the time of making the wager; the amount lost or 
 won on exchange speculative transactions. 
 
 Match Orders or matching.-Orders to buy and sell 
 that offset each other. Giving one broker an order to sell and an 
 other an order to buy an equal amount; one transaction cancels the 
 other and the one giving the order, in effect, neither buys nor sells 
 
 'ai'iiiiiii" 
 
,^,„^ 
 
 ■AMMMIi^ 
 
 -~ t k<i * kAr\l IKiT 
 
 1 
 
 ^^^ 
 
 •*4 
 
 .)4 
 
 MODKKN SJM^XaiLATION. 
 
 IVlatcliiiitf^,— Is resorted to in order to test the Btrength or 
 weakness of markets preparatory to an effort to advance or depress 
 quotations. See "Forced C,)uotations" and '•Washin^^" 
 
 Pool.— A combination of operators for the piir[)ose of buying 
 or selhng any specuhitive commodity or stock, thereby advancing 
 or depressing prices by an united effort. 
 
 Put.— The opposite of "Call." The buyer of a jmt agreement 
 has the privilege of delivering or putting commodities or stocks at a 
 certain price within a specified time. The nominal seller receives a 
 sum of money for the privilege, and is obliged to acce})t and pay 
 for the commodities or stocks te!idered, or forfeit the difference in 
 market price. The price named is always belo\N cash (Uiotations, 
 and unless the market dechnes so that the holder of the privilege 
 can purchase at a less price than that named in the put. he loses and 
 the seller wins the stake. 
 
 Riii;;.— A clique. A faction. A combination of brokers, si)ec- 
 ulators, politicians, or gamblers for the purpose of operating iu. or 
 controlling markets, properties, legislation, or poolM. 
 
 Sellers' <>ptioii».— Agreements which give the sellers the 
 ojition to deliver at any time prior to a fixed date, at a price named, 
 and the buyer is required to receive the stocks or property tendered, 
 or settle differences. A sellers' option for any month terminates on 
 the last business day of that month. 
 
 Shorl. To Sell Short,— In the sale of stocks, cotton, grain, 
 etc., to sell short is to agree to deliver what one is not possessed of. 
 Short transactions are a stumbling block to beginners; the science 
 of selling what one does not have, and yet make money by the c»per- 
 ation, is a species of metaphysics which comes only with education. 
 Short is the opposite of "Long.'" 
 
 Stratldle.— An agreement which gives the holder the privilege 
 of either calling or puttmg at the same price, to the other party, the 
 nominal seller or buyer, within a certain time. If neither privilege 
 is exercised the stake is lost by the holder of the privilege. 
 
 Suekers.— Parties who are induced to operate in the exchanges 
 by reason of false reports, and exaggerations. When a poo] or oper- 
 ator, sets a bait for the outsiders, those who bite are said to be suck- 
 ers. 
 
 WaMliiiijf.— A purchase and sale previously agreed upon. One 
 broker or operator buys what another offers for sale at an agreed 
 price. The bargain is fictitious, not even margins being at stake, 
 yet the effect is to establish quotations and furnish a basis for other 
 
^uuK'li^iKii^i't^;^ 
 
 GAYLAMOUNT 
 
 PAMPHLET BINDER 
 
 Manufoctured by 
 
 GAYLORO BROS. Inc. 
 
 SyrocuM, N.Y. 
 
 Stockton, Cotif . 
 
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