Los Angeles herald., 1907-12-21
LIKE A FARO BANK
NEW axiom has taken /.

NEW axiom has taken It's place
~ in American literature. 1t is:
"Stock gambling is the mother
Iof panics." AS the love Of money is
the root of all evil, so the craze for
sudden riches, for vast riches, is the
parent of financial panics.
No intelligent man will deny. in the
light of the occurrences of the past two
months, that the prohibition of stock
gambling would be followed by greater
and more enduring stability in busi-
ness. Nobody questions the right of
men to buy and sell. provided they
have the money to trade, as extensively
as they desire to and that they cheat
nobody in the transactions. But when
they sell what they have not, and
when they buy margins" they do not
trade legitimately. They then simply
bet, nothing more nor less, that the
prices of stocks or commodities will
rise or fall within certain period. If
they bet on rise and the rise fails to
materialize, the bettors lose. Trading
on margins is like gambling on the
state of the weather at noon Of a cer-
tain day q month hence.
There would be less gambling in
stocks-otherwise known as speculation
were not certain banks willing to
lend money on borrowed securities,
payable on demand with interest
which, under abnormal conditions, be-
comes usurious. There have been
times when short-time loans have
been made at a rate as high as ninety
per cent per year.
On the eve Of the recent financial
stringency, or panic among these stock
gamblers, the banks of New York had
lent the enormous sum of 100000 900
to cover margins. The banks did not
lose directly, except in cases where dis
honest corporation directors had
palmed off inferior and sometimes, per-
haps. worthless stocks; but who can
estimate the amount lost indirectly,
through the denial of this immense
credit to legitimate business necessi-
tated by the tying up of this fund q?
Members of the gambling fraternity
not only lost heavily themselves, but
through inducing certain great banking
institutions to lend them money for
their nefarious speculations they de-
prived legitimate business of the use
of hundreds of millions of dollars at
particular time of the year when
money was greatly needed.
The New York stock exchange has
become a veritable faro bank. The
turn of card, figuratively speaking.
loses or wins tremendous fortunes, as
the average man figures fortune. Is
this form of gambling vicious? Is it
demoralizing? Is it hurtful to honest
business? Who will answer any of
these questions in the negative?
Granting, then, that it is vicious, de-
moralizing and hurtful to honest bus
mess, why should it be tolerated by
the nation any more than that faro
banking and roulette playing and
craps" whatever that is, should be
tolerated by a community which has
regard for its moral welfare?
The Louisiana lottery in its palmiest
days was no greater gamble than
stock exchange in 1907. The Louisiana
lottery was put to death in response
to powerful and long continued pub
lie demand. The campaign of educa-
tion in regard to the gambling Of Wall
street is on; and though the time may
be far off it will come, nevertheless
the time when this particularly dis
astrous form of gambling will meet the
fate of the pernicious Louisiana
lottery.