The sun., 1909-06-17

soMEr1MEs pkooMEs oAMsLINa.

- not lntenQeO 10 leaQ 10 tne dCtual paSo-
ing from hand to hand Of the property
exchanges forbid gambling as defined
by this opinion. Nevertheless technical
delivery 10 made 90 easy that the prac-
teal effect OF much speculation, in form
legitimate, 10 not greatly different from
that OF gambling Also, there is this
q other important point;
A real distinction exists between speou-
lstion which is carried on by persons Of
means and experience and based on an
Intelligent forecast and that which is car
ried on by persons without these oualinca-
tions. The former Is closely connected
with regular business. While not unao-
compa anied by waste and loss this specula-
ton accomplishes an amount Of good which
Offsets much OF its cost. The latter does
but a small amount Of good and an almost
incalculable amount OF evil In its peture
1t is In the same class with gambling upon
the racetrack or at the roulette table. but
Is practised on a vastly larger soas' Its
ramihcations extend to all parts Of the
country. 1t involves q practical certainty
Of loss to those who engage In 1t. A con-
tinuous stream OF wealth taken from the
actual capital of innumerable persons Of
relatively small means swells the income
Of brokers and operators dependent on this
clsss OF business. and In so far lsicl as It Is
consumed like most income It repr esents
q waste Of capital, The total amount Of
-shis -aste Is rudely indicated by the obvious
cost Of the vast mechanism OF brokerage
and by ma nipulators' gains. OF both Of which
It 10 a large constituent element. But for
continuous infu1 Of new custom ers
replacing those whose Losses force them out
Of .the Street this costly mechanism Of
speculation could not be maintained on
enything like its present scale.
~. n,nhI.m whsr.yer snsou,a,ior ia
po a,,si ,hs,
ons ,Ho " w.. .n,, ans,r,,,;''s ,.ht, -
"Astelul a,'o rhorahy eeS'i ue'l'e Nhne
retaining and allowing iree play TO that
which Is beneficial Ihe dimcuity IN the
solution OF the problem lies in the practical
tnpoesibility OF distinguishing what Is
virtually gambling from legitimate specula.
In measures which will lessen speculation
by persons not qualified to engage in il
m cssrvinS ] ont % such a nol,cv eIchanaes can
aoeomnlish more than Leeislatures, In
connection with o,,r renorts on the diffcrsnt
sSchsnae. ns well ne On th. seld of invest.
ment eho speouiauoh ~hich hes ou.eiae o'
tne e1cnanses we shsh MAKE reconmenoa.
uons olrecteo 10 'he removal OF various
evils now existing and TO the reduction oil
the volume OF speculation OF the gambling
type.
~,
IN taxing UP the otock Ekchahge tne
vded bv IL, constitntion and niles is
the evolution of more than a century.
The volume OF transactions indicates
that to-day it Is probably the most impor-
tant financial institution in the world,
Ia the past decade the average annual
turnover in stocks and bonds has been
about Sle, 800 ooo, 900.
CONTINUES. .aiiects the financial and credit
interests OF the country in 80 large a
me- snre that its proper regulation ia
= matter OF transcendent iInportance,
While radical changes in the mechanism.
now 20 nicely adjusted that the trans
Of friction. might prove disastrous TO
the whole Country. nevertheless measures
should be adopted to correct existing
abuses"
1t is declared TO be unquestionabie
that only small part OF the TRANSACTIONS
on the noor is OF an Investment character
ana that suoetanuaI part nay DC onSI.
- ,;ss;,, nsnnny .ss that tba STATE
c,niJ d;st;n n,,;sh NV Law hetween nroner
and imnroper transactions. for statutes
directed against the latter would inter-
fere with the former as has been shown
By tho experience OF Germany. But
tuo 0XCudAkcs "lu itO piS,hoiy poWoA
over members, might provide some cor
rectivee.
% PER- CENT. MARGIN FAVORED.
=, p,,rchsse ,of securities On margin In
declared 10 be as Legitimate as purchase
Of anv other properly in which part paw
ment In deferred But purchases on
small margins are prolific OF loss and
such loss would be materially reduced
the customary percentage Of margin
were increased. The commission recog-
nlzee that II ls dangerous 70 leelsiate on
tne amount OF creott Mhicn one PEI
may sugges. 70 anoIei anu 49, ua.sD
I%eooeuJio % s,,ia 'ma ;ns;.t 'nu n,on th.a avuoeni
% nav cent marain In the same
nennact;pn The erchanoa should dis
s,o,,rs ne -nvrannidino. or the use of paper
nn,fits as margin for new commitmen Is.
SHORT SALES NOT NECESSARILY WRONG.
The commission discusses short sales
from a moral aspect and also with refer
ence to the criticism that such sales re-
duce the market price of securities 1t
saws in part:
w. h.r hao, .t-on,,v urssd IN sdvi.s
.,s,si,ie as ir,ita,,on - shor, 80
.ne pIon'o''on . VI -, :, - 20
not oniy On ,he 'neo'! 'ue. =" 10 "Ions w
agree 70 cell "na. one aoeS ho' Poeseee'
but that such saies reuuce 'ns harke.
price OF the securities involved. we DO not
think that 1t Is wrong TO agree TO sell some
thing that one does not now possess but
expects to obtain later. Contracts and
agreements to sell and deliver in the
future. property which one does not possess
:. - .;.-.. 80 tho non,r,ct ara ,op,por ;n