The daily gazette., 1881-01-26
oes into wan street takes his money


with him when he retires. Some BY
good fortune may make what would
be snug little fortunes if they woult
pocket their cash and leave speculation
alone. but the more they make The
d eper in they get, until some da,
along comes crash that sweeps away
every cent. Not broker but has q
fund Of anecdotes in Illustration of this.
IL is the most fascinating OF all gam.
bling, and when it once takes hold oi
a man, he has difficulty in shaking il
| off.
When the stormy petrol gets dis
couraged by repeated losses, he turns to
operating at long range, and, after losing
at this, he changes tactics and becomes
a scalper. He is constantly trying some
new plan; the scheme OF csasing en-
| tirely does not seem TO occur to him
until he has lost all. The details OF
Wall street operating are mystery to
those who baye not taken a hand. The
person who wants TO speculate, does not
know where to begin or how to take the
first step. How much money must he
put up as margin? What does his
broker do, and low much must the
broker be paid for making the purchaser
These are constantly recurring Quesl
tions. Dozens of letters are sent to
New York newspapers on the subject,
ana tbe writers seem 10 imagine that
there is something very mysterious
about the whole business. As o matte er
of fact, the reverse is the truth. Moth
Ing is simpler than purchase for rise.
Selling stock short is Just trfle com
plicated 10 a novice, but is easy TO ull-
derstand. The beginner usually starts
MS speculative career by purchasing 100
shares OF stock, although less number
may be bought. He seeks tru.t-
worthy broker and is told that to pur-
chase 100 shares, he must deposit with
the broker eight or ten Der cent. of the
par value of the stock. Dealings In the
New York exchange are SO sealed that
ten per cent. means $1,000 to the credit
OF the customer. This deposit is called
the margin. The broker then opens an
account with him by placing $1,000 to
tie credit OF the customer.
he next step is for the customer to se.
lect a stock which is likely Ito adyaace.
I'D having made up his mi nd that Erie
Ior Instance, Is the card, he simply says
70 Inc broker, Buy me 100 shares OF
Er g." OH gpes the broker like a shot
e. the exchange, where he dives into a
crowd of 1000 other brokers. The floor
u the great room has upon 10 q score or
more or knots of men pushing, snrginR
ana yelling at the top Of their lungs
oae Knot ia the st. Paul clique, another
the Reading clique. a third the Erie
crowd. Our broker rusbes into the Esis
coterie, elbows men ous of the way.
nolds his right hand high In the air, and
knowing that the one man about whom
the crowd II surgipg has some Erie stock
70 sell and hearing dozen other men,
ia their hauds in the air, yei ing t39t,"
ls jumps up in The air, higher than hall |
the o he aud yells $40 Thereupop |
me centre of the group makes a rush |
1t him and shouts "Sold." All this |
means that our broker has offered $40 a |
hare for 100 shares of Erie, and the |
'ther man has sold them TO hiru, the 9th
ar brokers having bid enIy S3y 87t for il.
fhe two brokers jot down the rrausae
ION Ia their memorandum books, and
ne broker who sold IL reports the sale.
ns tantly is flashed over the wire and into
very brokers office in the city the new
luo 'ation for Erie of 40. The broker
\ 10 sold rolls up 100 share certificates of
1ue aud sends them to our broker, who
,uts them In his safe, and sends blck n
heck for $4,000, the price of the stock
Jur new customer then "holds 100 Erie,n
lie may "hold" 1t as long lie pleases, so
ong as the price of Erie advances. If
lne Is In demand the price will advance.
" hen 1t is quoted at Al IL has advanced
IL share, aud our friend IN Si00 ahead
0 the transaction-tbat is, he would be-
we're It not for the brokers commission.
which ts one eighth per cent for buyinp
nd one eighth for selling, which to
ur friend would be S25; hence the net
rofif at Al woHld be $40. Al 45 IL would
'e S470 Ii the stock is held longer than
be day of purchase the customer must
ay Interest on ths $4,000, the cost of the
tock at six per cent. When the custom.
decides that he has made sufficient
roft from the Transaction he simpIy
ays, "Seii my 100 shares of ErIe.n AMI
be broker sells II. If the sale il at az
10 Gus omer is credited with the profit
'as commission and interest. He then
as some fourteen hundred aud odd
oilars, which stands tor a margin in
Is next Transaction; or he may with.
raw all his money and close the &C,
cunt.
After two or three such operations his.
M al has doubled, and then, Instead of
~ shares, he may purchase 200. Many
otRlnner has Increased his original J
$1,000 to $4,000 and even $50 600,
nd then, becoming less cautious, has
nhd himself with 5000 shares of stock
hand when there came a crash, aud
st all Stocks go down SO much easier
an they advance that the profits of q i
seive month may be wiped out in Q
selve hours. p