Year: 1873

THE NEMESIS OF STOCK SPECULATION
1t may seem, in ordinary times, to be hugely
profitable to play the speculator on a grand
scale. To contral the whole floating stock of
a great railroad, or of two or three roads, so
as to be able toput up its price at discretion,
and mulct without limit a host of smaller


operators who play in the dark and without
holding the trump cards; what game could
be surer? what so certain Of bringing in inn
mense stakes? 1t is this that has made the


vast wealth of our Vanderbilts, our Goul6s,


our Clarks, our Drews. Their game was


played with such immense odds in their favor


that, almost inevitably, they won every time.


The four names we have mentioned have sue
ceeded in taking perhaps $50, 900 900 out of
the pockets of the successive droves of dupes


who enter the spider-parlors of Wall street.
Every now and then, however, events de-
monstrate that the game of these king play
ers is not so absolutely guarded and certain
as it seems to be. For a series of five, ten, or
fifteen years, they may so on steadily win
ming, until their financial power assumes the


magnitude of an appalling monopoly, at
which the public stand aghast and which leg
islators are invoked to place under restraint.
But, underlying this vast power, there is one
weak spot, which when touched makes
them like other weak men. Their wealth is


mainly employed in margins. Their ambi-
tion to control immense schemes leads them
to buy five times as much as they can pay
for, and they have to use the millions of
stocks they have bought as collaterals for
loans. When a panic strikes the market,


their stocks decline, the margins on their
loans are narrowed down, and they have to
| sell like others to make good their accounts
| with their lenders. The sales thus made to
protect themselves, further weaken their Sc
| curties aud create fresh demands to keep
| good their margins, which is followed by
i fresh sales of their stocks and still further
| decline in prices; and thus the process of
| impovershment goes ON until the decline in
| the market value of their stocks swallows up
their wealth employed in margins.


This is the process we have seen i'm opera
tion for the last month in Wall street. Mil
lions ofmoney, which had been made by a


few successful spectators out of the crowd of


less sagacious ones, has been scattered to the


winds and is now being gathere6dp by frugal


investors in all parts of the country, through


purchasing, at an enormous depreciation, the


stocks which the railway kings are no longer


able to hold. These great leaders of specu-


lation may be, are not absolutely ruined;


but their losses must be counted by the mil


lions; and their less wealthy followers, whose


large resources constituted great part of the
strength of the chiefs, are generally well nigh


or completely beggared.


Truly, then, there is Nemesis in stock
speculation. The vast irresponsible power


which the successful speculator finds it pos.


sible to acquire is not, after all, beyond the


reach of those natural laws which control all


the affairs of society for the common good of
all. A Vanderbilt may succeed in acquiring,
by sheer dint of shrewdness and speculative
trick, wealth that enables him to control
for his own purposes the most important rail-
roads of the continent; but one of those
credit panics which bring all enterprise to its
true level sweeps over Wall street, and the
fruits of his INSCRIPTIONS sagacity are dis
tributed among the thrifty and honest men of
the country. This may seem rough sort of
justice, but it may be relied upon with the ut
most certainty to right the wrongs of the
financial department of society. At least we
may console ourselves with the reflection that
the dreaded storms of Wall street adjust
great many inequalities and do great deal
in the way of administering justice which
none of the short-sighted laws of men can
ever do. Let these who avow so much faith
in the efficiency of the written law compare
its efficacy With that unwrtten law of ma
ture whose potency we have seen Illustrated
within the last thirty days, and then say to
which it is the safer to trust for equity in hu-
man affairs,-N. Y. Bulletin.