New-York tribune., 1908-03-04
STOPPING SPECULATION.

,,o,,,asontative Hpphurns 5 bill TO prevent stock
SPECULATION 10y imposing stIh tax upon stocA
transfers is too effective by half. IN an eHort
IA check what some persons regard as an e'h
If would impede the whole market Tor secufi-
rios and how important 2 part free market
fer securities plays in an industrial socletS
whore car,;tal is modified by the device ol
stock certificates may be readily seen, II for
,no,pant if i imagined that no such marke-,
with lis universally accepted quotations eA-
fstsd and every transfer of a block OF STOCK
could be accomplished only by sucn hass""s
over terms aS accompanies the SAFE OF Il nouSc-
No one who has the interests OF commerce III
heart can wish 10 put any obstacle III the way
Of tba ready exchange of securities otHNI
countries which attempted TO strike al sl'ecui'i,
tiou are repenting Of their legislation anu
America may we'll avoid initiating their mis-
takes.
II is ,,roha Div natural that the country. smart
iD from, The effects of the recent panic. should
wish 10 punish Wall Street, but TO 90 :" io
very much ike smashing the barometer because
II has rainad and spoiled a day pleasure.
Wall Street did not bring on the panic. Nouii
not have wanted 70 if il could have, anu couiu
moi have If it had wanted 10 The POSSIBILITIES
Of speculative manipulation are grossly eAass'I
ated. No group Of men can force prices ger
eralIv either up or down for any consideraole
distance or considerable period. Exchange
rr;cas foil last year because, through the strain
| m canital investors could obtain elsewhere bet
Ter rates for their money than the standard Sc
c1lrities Welded at the existing prices ana th7N
will rise again as soon as investors feel con
fdeut that dividends Will not be cut ana as soon
nc interest rates fall so that the interest yield
| of Stock Exchange specialties proves attractive
again. No spectators, however rich could
| hare prevented the one movement nor can they
! block the other
| We sIlpD0se that the greatest prejudice no"
| existing against speculation proceeds from JhlS
belief that manipuiators have the power TO sum
mon snirits from the Vastly deep, 10 exorclse
| n,osparj1y at will Some of the Stock Exchange
devices Of speculation seem TO present difficulties
| "a those who have not analyZed them. But
| .huying On a margin and selling short har"
| their exact counterpartS in every kind OF busi-
| ness. and as they are practised on the eX-
| changes they are merely sort of shorthand
| version OF commerce. Every merchant who pur-
ebasas goods on credit. every real estate buyer
who purchases a house Oh q mortgage expect
ing 10 sell il sooner or later at advance, buys
! on margin. Every manufacturer who con
| tracts to deliver goods not yet made. of which
perhaps the raw material is not yet grown,
/ sells something which he has not something
| which he is short of-in brief. sells short.
As for those simple reformers who do not oh
| iect 10 buying on margin because II tehds
| 10 raise prices and stimulate prosperity but
who regard selling short sin against
| society. II may be in order TO ask them how tEe
one thing can take place without the other.
! If selling is forbidden who can buy: