is your stock. The law says that your broker must hold it for you. He can pledge it at the bank, but he must pledge it for your benefit, so that whenever you want to pay the balance due, you can have the stock. If your broker pledges this stock for his own benefit, or in any way puts it out of his power to deliver you these 500 shares when you come for them, the law of New York and Pennsylvania says he is guilty of larceny. If your broker obeys the law and keeps your securities for you, he might, indeed, fail in business. His own funds might be eaten up in speculation for his own account, or in expenses, but his failure would disclose no "unsecured creditors." No one would lose except himself.

When you deal with a broker on this basis of depositing margin, you depend absolutely upon his good faith and fear of the law. If he chooses to use for his own benefit the stocks which belong to you, you cannot stop him, for, as long as he remains solvent, you will know nothing about the matter. There is no inspection of brokerage houses. They are all partnerships. There is no bank examiner to go over the books. The customers of brokerage houses are absolutely at their mercy.

If a safe method of margin speculation could be

suggested, surely no one would deal through the broker. Yet such a method is available to any one with a substantial bank account. If you have faith in the Atchison; if you believe it is going up; if you are not content with the profits on 50 shares which you have the money to buy and pay for; if you want the profits on a large number of shares, go to your banker. Give him your order. He will lend you 80 per cent on any Atchison stock which you may own, and he will buy the stock for you through some broker, charging you only the broker's commission. You cannot buy as many shares through your banker as through a broker, but in all other respects the transaction to you is the same as though you had dealt through the "banker and broker."

You pay the

The bank buys the stock for you. bank $5,000. You sign a note for the balance of the purchase price. It is your stock. The certificate is made out in your name. Your note is pinned to the certificate, and it goes along with it. The bank does not use your stock for its own purposes, for the bank is a public institution, a corporation with a regular organization. Whatever it does must be known to the officers or directors. Its accounts are published. It is subject

to the inspection of the bank examiners. You know that when you buy stock on margin through your bank you may lose your money, but your loss will be the result of your own bad judgment, and not of the larceny of a broker.

Since, now, as speculators in stocks on margin, we have found a safe way to speculate, what are our chances of profit? They are poor, very poor, almost negligible. Space does not permit at this time any extended discussion of the reasons why the margin speculator has no chance. Let two cases suffice where speculation on the most positive information went wrong.

Many years ago, an Eastern railroad was in trouble. It was a large producer of coal, which it sold through agents. One firm of agents had positive information, which came to them in the course of business, that bankruptcy was inevitable. They knew it, and subsequent events proved that they were right. They resolved to take advantage of this knowledge in the stock market. They raised $30,000, all the money they could get together, and they sold this stock short on a 10 point margin. That is to say, they made a contract through their brokers with certain other brokers to lend them 15,000 shares of this stock, and they

agreed to deliver 15,000 shares on demand. This stock they sold for $300,000, leaving the $300,ooo, together with the original $30,000, with the broker to secure the transaction. They expected that the stock would drop to 10. Then they would order the broker to buy 15,000 shares, which would cost only $150,000; return the shares to the brokers from whom they had borrowed them, and receive from the brokers the difference between $300,000 and $150,000, less the brokers' charges as their profit. They would also get back their original stake of $30,000.

Now, observe. The information was accurate. The railroad company was in a bad way. It did fail-later. Its stock did drop, not only to 10 but to 5-later. At the time, however, certain powerful and wealthy men decided to put the price of this stock up, and by heavy buying they did put it up to 25. Our friends the coal dealers were caught in the rise. Their broker was asked to return the 15,000 shares. He bought these shares at 22, costing $330,000. The $30,000 was gone. The firm failed, and it was no comfort to them that the railroad failed soon after.

One more instance. A prominent attorney was employed by certain stockholders to bring suit to

dissolve a large company whose stock was active on the exchange. The announcement of the suit was sure, as he thought, to break the price of the stock. So he raised $15,000 and sold the stock short. Now, mark, his information was accurate. He himself had drawn the papers. He himself was to file them. He was to give out the news. The news would break the price of the stock at least 10 points. He was certain to double his money. The stock was sold at ten o'clock, immediately after the opening of the exchange. At noon, announcement was made that this company would be merged with others into a large company. The suit was withdrawn. Immediately the stock advanced. The lawyer was fortunate to escape with the loss of half his stake.

Here are two cases where shrewd and intelligent men, "on the inside," possessed of accurate and exclusive information, tried to turn their knowledge into money and failed. Such cases are not exceptional. The wisest speculator this country ever produced said that he was satisfied to be right four times out of seven. The speculator of average intelligence and good fortune can be sure of one thing: that if he sticks long enough at the game, he will lose all he puts in.