The Detroit times., 1909-01-26
MONTE CARLO IS A
NOVICE BESIDE
!. WAlL-ST
MAGAZINE WRITER SHOWS THE
RuiNous EVIL OF MARGIN
oAMHLINo-REFoRMs ARE pos.
sisLE ONLY THROUGH LEoIs-
LATIoN.

LATIoN.
Everybody's Magazine in It's Febru-
AIRY issue, contains an article by Fred
erick 8. Dickson In which the marked
card methods OF Wall-st. are graphical
ly exposed.
The author OF this article says
an editorial foreword, was manager
Of the Cleveland branch Of the defunct
stock exchange firm OF A. ..
Brown 4 Co. whose spectacular
downfall wrought SO much ruin and
disaster A lawyer by profession. he
IL was, as trustee for the creditors.
who steered the great Everett-Moore
syndicate OF Cleveland through the
sloughs OF a II million dollar bank
ruptcy back to prosperity. He is pres
ident OF the Associated Western Yale
clubs, succeeding President-elect Taft.
What this man has To tell about the
methods OF the New York Stock Ex-
change must be accepted as the truth. .
The article says In part:
1.-The customer OF a bucket shop Is
sold out automatically when his mar
gin IL exhausted, while the stock ex-
change man strives 10 induce the Gus
toner to increase his margin. and
thereby his probable loss and the brok
er's possible gain.
For every dollar lost through a
bucket shop a thousand dollars are
lost through legitimate stock ex-
change houses.
Reform Must Come by Law.
"All the capital OF all the railroads
in the United States and OF the great
industrial corporations is sold on the
noor OF the New York stock exchange
20 times over In the course OF single
year.
THE machinery OF the New York
stock exchange Is used daily to serve
the selfish purposes OF single man,
or rather Of group OF men acting as
one. Has Wallst. succeeded in fright
ening into inactivity the people. the
governor of the state, the president
that Is and the president that Is TO
be-?
1T Is clear that II there is today
anything evil In the conduct OF the
exchange that evil thing exists with
the consent Of the governing council
and OF the exchange itself. and so II
IL worse than useless TO look TO the
exchange for amendment. IL amend
ment Is to be 1t must come from the
legislatures OF the states and by act
of congress.
Most members OF the New York
stock exchange will tell you that only
about per cent. OF the sales OF stock
Is for actual investment. But II we
deduct 10 per cent from the sales OF
the week we have been considering
we And that 5,01S.400 shares were
dealt In on margin. an average Of
836.400 shares day. At 10 points
margin this would mean that every
day the sum Of $s.364,000 was risked
In gambling contracts on the New
York stock exchange.
Take the most generous estimate
OF winning orders, one out OF four,
and figure that the unsuccessful gamb-
lers lost but half their margins. and
we And gross loss In one day Of $3.-
186,500. During 1907 the winnings OF
the bank at Monte Carlo were $780,.
900. Wall-st. takes more than that
from its gamblers In two and one
half days.
And yet governors and legislators
and district attorneys and police and
magistrates worry over the petty
gambling of the race track. the triv
ial operations Of Dick Garfield. or the
newsboys who shoot craps on the sand
pile.
For a man TO sell what he has for
future delivery, or even to sell what
he has some reason TO believe he Ia
going to get. may be proper specula-
ton, but to sell what he has not sim
ply for the purpose Of depressing val
ues. and SO forcing real owners to
part with their property at less than
lite Intrinsic value, Is the meanest and
most dangerous form OF gambling and
the most injurious TO the honest pub
lie.
Suggestions for Reform.
Let the law then compel him who
would sell short to describe In writing
and with particularly the thing that
he would sell. II II is stock, let him
give the number OF the certificates,
and state In whose names they are
registered, and let him also aver that
he Is the rightful owner of the stock
which he offers for sale. Punish him
II he states that which Is false. and
punish also the broker who accepts
an order that does not comply with
these conditions.
''I.et the law then, while in general
prohibiting margin trading, also in
particular prohibit the broker from
lending any additional sum beyond
the bank loan, and insist that the
broker shall inform his customer OF
the number and description OF the
certificates which he has bought, the
amount OF the loan and the name OF
the bank where the loan Is placed.
Make II clear also that the owner
ship Of the stock is wholly In the Gus.
toner, and that It will be grand lar.
ceny for the broker 10 use this collat-
eral for his own advantage. Such pro-
visions as these would make the pro-
hibition against margin trading in
stantly effectual, and nothing short OF
this would.
IAN institution which does More
business In single day than hnost
OF our thriving corporations do in
year should be regulated by public
authority and operated in the interest
A OF the state"
PILES CURED ~ TO 10 DAYS
fAZO OlNThENI - guaranteed 10 sure
any case OF Itching. Blind, Bleeding or
Prosruding Piles In TO IL days or
money refunded soc