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Other methods of speculation are by 'cover' or 'margin' system, or by options. As to the first of these, it should be enough for most people to know that the men who conduct the speculations of amateurs in these directions are not, as a rule, members of the Stock Exchange; that they cannot be compelled to pay the fortunate amateur any winnings that he may have made; and that they take advantage of their freedom from liability whenever it suits them. Moreover, the charges of outside brokers higher than those of members of the Stock Exchange. In Japanese stock a rise of would have to be won in the first account before a profit could be obtained, whereas the Stock Exchange broker and jobber between them only take for their trouble. Options are still more expensive. In Japanese, a 'call' option for a month might cost 1 for 100l. stock. The stock must rise (the jobber's turn) plus 13 (price of option), or 2 points altogether, before the money already paid is returned. It must rise more than 2 points before any profit is earned, and as much as 3 before the gain equals the stake. The amateur is betting even money that the stock will rise 31 points in a month, which is absurd. For options on mines and industrial companies the outside broker's charges are even greater, making a rise, in some cases, of as much as 20 per cent. necessary before the gain equals the stake.

The gambler may think he has a profitable advantage in his power of selecting the propitious moment. But the price of a stock is a statement of the value put upon it by the expert world after considering all the essential factors-interest-earning capacity, public opinion, financial influences, the value of money. No sensible man would have the temerity to suppose that he, as an amateur, can estimate the quantity and value of these conditions better than the professionals. The amateur who uses a roulette system, or backs a horse, or speculates on the Stock Exchange is, in fact, assuming powers of prophecy which are not natural to human beings; for he is asserting that he can, without special training, see more clearly than those whose business it is to understand these subjects, and that his divining power will enable him to beat the professional, even when weighted with that functionary's fee for introduction to the gambling arena. He is claiming superhuman qualities,

In the following list the various methods of wagering that have been noticed are placed in order of demerit, the most hazardous standing first. Statistics are not available with regard to the percentage of loss incurred in amateur speculation on the Stock Exchange. It is greater than the loss over the favourite in a horse-race; but the relative demerit of the fourth and fifth items is not exactly determinable, and can only be guessed at.

1. Options on mining and industrial shares. With outside

2. Other options.

3. Cover or margin system.

brokers.'

4. Speculation with the introduction of a member of the Stock Exchange.

5. An outsider in a horse-race.

6. The second favourite.

7. The favourite.

8. The numbers at roulette: loss, 2.7 per cent.

9. The even chances at roulette: loss, 1.35 per cent. 10. Trente-et-quarante, with insurance at a cost of 1 per cent.

Among the poor classes betting on horse-races is a grave and an increasing evil. The big bets between wealthy owners, which used to form the bulk of the wagering, have given way to starting-price transactions in small amounts, undertaken by those who can ill afford to lose. One of the worst features of this kind of betting is its secrecy. It is easily done through the post, or in other ways on the sly. For clerks, factory hands, shopassistants, and others, there is a strange fascination in the 'sport of kings,' even though in their case it can be but seldom enjoyed, except through the imagination. Their gains do them little good. Their losses are often enormous in proportion to their income. Similar to this, though in a higher social grade, is the gambling in stocks, carried on by persons totally ignorant of such matters, much of it done secretly, by post, through 'outside' brokers.

These harmful forms of gambling could be lessened by legislation. But perhaps the only radical cure for reckless gambling will be found at last in the cultivation of the human brain. No individual having a true conception of the principles that govern roulette would risk

any serious sum of money at Monte Carlo. Now there is a steady growth in the understanding of roulette, Modern mathematicians know more of the laws of probability than did Pascal or d'Alembert. Modern systemmongers, great as is their folly, have at least got beyond some of the puerile superstitions of their predecessors. Few now believe in an infallible system. Thus the gambling at Monte Carlo becomes, by slow degrees, less irrational. While the total volume may be maintained, the operations of individuals are more discreet. There is less belief in luck or in systems, less hope of winning, and less persistence. So much of the gambling in stocks and on horse-races is secret that improvement must be slow in these directions; but understanding will, in time, reach these circles also.

It is not suggested that wagering on games of chance, on horse-races, on the rise and fall of stocks, will come to an end; but, when the individual understands what he is about, he will have less confidence. He will stop

sooner; and the average wager will be reduced to a comparatively harmless amount. The spirit of gambling is nearly allied to, and may easily be transformed into, the spirit of rational enterprise. The man who, for a worthy object, risks a carefully prepared amalgam of money and knowledge may sometimes be a loser; but such losses can be utilised as steps towards future gain. The gambler may never be abolished; but we may hope that in time, with the growth of intelligence, he will be domesticated and harnessed for the use of mankind.

Art. IX.-TRADE-UNIONS AND THE LAW.

1. Report of the Royal Commission on Trade Disputes and Trade Combinations. (Cd. 2825.) Printed for H.M. Stationery Office, 1906.

2. The Thirty-eighth Annual Report of the Trade-Union Congress. London: Co-operative Printing Society, 1905. 3. Trade-Unionism and British Industry. By Edwin A. Pratt. London: Murray, 1904.

4. Labour and Free Trade. By John Burns, M.P. London: Simpkin Marshall. n.d.

5. History of Trade-Unionism. By Sidney and Beatrice Webb. London: Longmans, 1894. (New edition, 1902.) And other works.

CIRCUMSTANCES are combining to subject to the fiercest light of criticism the principle of free exchange as an organising influence in our associated life. Mr Chamberlain's campaign in favour of tariff reform and the tradeunionist's dissatisfaction with the Taff Vale judgment are alike to be referred to a distrust of the advantage and the equity of freedom of exchange. It is pertinent therefore, whether such criticism points to the abrogation or only the regulation of exchange, to consider how much our social system already hinges on the automatic cooperation which results from the right accorded to individuals to exchange their property and their services. If we pause and allow our imagination to dwell for a moment on the organisation which provides a town like London with its daily bread, we shall be carried to the ends of the earth, and called on to view a vast series of exchanges dating from the remotest past down to the last humble service which to-day brings our food to table. So familiar is the operation of the principle that we are apt to overlook the silent all-compelling force of its influence. Exchange is to our industrial effort what the laws of gravitation are to the celestial bodies; and, relatively to the vast superstructure to which it furnishes the vivifying principle, the temporary frictions which, at any given period, obstruct its development are of infinitesimal importance.

It has sometimes seemed to us, as students of economic problems, matter of reproach to our academic

economists that we have from them no reasoned apologia for this inevitable incident in modern civilisation. Little effort has been made to impress the imagination with the stupendous fabric which turns on the pivot of exchange; and the air is full of querulous complaints of what, after all, are minor difficulties which still await solution. In the open competition and experience of the ages, free exchange has largely superseded the earlier regulative instincts of mankind. Voluntary co-operation, under which labour is exchanged for wages, has taken the place of compulsory co-operation, in which slavery was a necessary part. Private warfare and a state regulation of prices have yielded to the superior equity of settled industry and the impersonal verdict of the market, both based on the principle of exchange. Our ideas of equity have reached their highest level in our recognition of the individual right of each to a free disposal of his powers.

Politics is not a very logical trade, but it would be an injustice to the memory of Cobden if we overlooked the fact that Cobden was much more than a politician. The nearest approach to a philosophical defence of the principle of free exchange is to be found in the exposition of Cobden's esoteric teaching by his friend and disciple, Sir Louis Mallet, published, with other works, in a volume entitled Free Exchange.' From a somewhat different point of view, as following from his definition of economics as the theory of exchange, and without any attempt to give it practical application, the same thought has been worked out by the late Mr Dunning MacLeod, a writer whose peculiar idiosyncrasies have unfortunately obscured the very great merit of his work; and the tradition of Bastiat, Cobden's most distinguished foreign exponent, has been ably maintained by the so-called liberal school of modern French economists. Though in England our economic interest seems for the moment to have drifted away in the wake of German historical research, the real issue (which we admit may be elucidated by the heavier ordnance of Teutonic speculation) lies here-in the coming struggle between the liberal ideal, the ideal which underlies the thought of Cobden, a belief, in other words, in the principle of liberty and in the inherent equity of free exchange as an organising influence, and on the other side, the principle

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