The Grenada sentinel. [volume] (Grenada, Miss.) 1868-1955, 1908-02-01

nC DuCNCa SisOP D"'
House bill No. /. now before the
Mississippi Legislature, aimed against
auckeu shops, is n that ought 10
sacome a law. The bucket shop is q
consumer of the wealth Of the peo-
pie and strictly non-productive. 1t
cakes money out of the pockets OF
oeople who can i'll afford to lose, and
SUITS it in the hands Of those who add
nothing to the wealth of the state,
lxd who too often are mere sports
and gamblers. The bucket shop
proposition is very often a heads 1
lose, tails you win" proposition.
If you buy stock and the security
gees down, you have got to lose as
you have to put up the money to take
sour margin. But if the stock goes
pp. you are by no means sure of win
ning, because many bucket shops are
gun on the most inadequate capital, the
owners often engage in reckless Specu-
Eation themselves, SO that the money
that should go to customers from rise
Of some security, may he seized in ad-
vance to pay the debts OF the shop,
and il so cannot be recovered.
The great trouble with the buck
shop business in that it tempts peo'
pie into bigger risks than they can
possibly afford to take.
While it is far better for the aver
age citizen to keep altogether out of
che stock market, there is a certain
amount of investment buying that is
legitimate. The man who buys a
stock outright and owns it., is in a
hundred times better shape than the
Bucket shop patron buying on margin.
Suppose you have $500 to invest.
III you must put it into stocks, the
emily thing to do is to buy some
standard issue outright, and In this
case you could secure five shares of
some good security, say like N. Y.
Central. The chances for either
making or losing are not so very big.
At the very worst that Guild happen,
New York Central could hardly go
below 80, which would mean a loss
of 500. And at the best it is very
Smprobable that New York Central
will go above 120 for a year or two,
which would mean a gain Of but 800
Now take Vie caS OF the invest
nent Of 800 through a bucket shop.
You could probably get 800 shares
on a margin Of five points a share. Ii
the stock went to 120 you would
make $4,000. But if it went to 80 you
would lose $4,000. assuming that you
protected your stock by putting up
Che margin as would be required.
That is the trouble with the bucket
shop investment, that it, temptS the
vnwary to risk an amount that they
cannot afford. No one who has but
$500 TO invest ought to take a risk
of losing more than 800, which he
would involve by buying the stock
outright. The possible large profits
through margin operations are ex-
eeedingly dangerous, since they in
tnepe a risk of a crushing disaster.
Stock operations are at best a game
Of loaded dice, arranged so that the
greater part of the time the insider
wins.
Let us have just as little of this
I'm Mississippi Is possible, and clean
ont the bucket shop business, root
and branch.-Clarksdale Register.
The Boddie bill, which passed the
bower house by a vote of l01 70 G, is
very drastic in its provisions and is
Intended to prohibit the whole plan
Of future dealing, whether in cotton,
meat. stocks and bonds or anything
Else. The Sentinel gives its unquali'
fed approval to what is sought to be
accomplished. We believe that the
absolute elimination OF the cotton
Gambler would be a boon to the cot.
con farmer, nor do we believe the
GAMBLER in any commodity is neces'
nry to the proper realization OF
legitimate prices.