Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1886-12-08
THE STOCK DEAL.

The crash of failing stock broker con-
Germs in San Francisco is the one sound of
the hour. No clear-headed business man
expected anything less than disastrous col
lapse to follow close upon the heels of the
stock gambling craze. The "boom" in
mining stocks began without any good
business reason whatever. Beyond the
fact that in one Comstock mine new
working level had been abandoned and an
old and neglected one reopened, there was
nothing whatever to warrant the sudden
imitation of values. The real value of the
mining property on the Comstock lode re-
manned the same after the boom began as
before, only the fanciiul price, which is no
value, registered any seeming appreciation
of worth. Yet, knowing this fact, know
ing that there had been no new discoveries,
no uncovering of ores warranting the send
ing of the stock Of any mine on the road
to par value, thousands of people rushed
in and purchased for still greater rise. A
few shrewder or less confident than the
masses sold while the fever heat prevailed,
and realized small fortunes. But in every
such case some other and many others suf-
fered, or are to suffer by reason of the
gains Of the few. In fact the sum of hui
man misery is augmented far beyond any
thing indicated by the mere financial loss.
For in hundreds of cases the mania to
reap rewards disproportionate to invest
ment, led to the pouring into the NAV of
the deyouring monster of gaming the last
farthng; to stripping the home of even
the necessaries of life in order to procure
means to lay upon the altar of legalized
theft. For it is clear most largely
the methods employed in stock gaming
fall nothing short of theft. Take these two
cases, and let the distinction be pointed
out if possible, by the most acute logician.
A is employed by in the transaction of
his business as clerk or cashier. While |
acting in that capacity, A takes from his |
employers vaults sums of money, and con-
verts them to his own use. The Courts |
decree A TO be guilty of embezzlement,
which is but another term for larceny, and |
so A is properly put into the regalia of a |
thief and sent to State Prison to expiate |
his crime. But B employs to purchase
for him certain stocks then for sale in the |
market at a given price. But C, instead, |
retains the money, and when somewhat |
later calls for his stock, or directs that it |
be sold, informs him that he is unable |
to comply, and has suspended payment.
That is to say, he has pocketed the money |
of his client never having invested cent
of it in the certificates of value. The case
is no different where the purchase is made
upon margin; that is, the client advances
cash and the broker agrees to use his |
credit to purchase a certain number of |
shares. The stock falling to point below |
the margin, the broker may pocket what
ever he receives of the client, and as much |
more as he can induce him to put up to |
keep his supposed margin good. The |
world knows that not in three cases in ten.
possibly in so few cases as to make it phe-
nomenal, is there actual purchase of the
stock ordered. Hence it is that we see
statements made of suspension, in which
the bankrupt firm or broker lists his liabil-
tiles to his clients at the valuation of the
stock at the hour of suspension, but his as
sets contain no memoranda of the property
of the client supposed to be in the pos
session of the agent. However the Courts
and the law of the street may construe
these as business transactions they
never can be made to stand the test of
good morals in the court of human judg-
ment, that demands of the employee or
agent that he shall actually purchase and
hold ready to deliver that which he has
undertaken to do.