A bank or a finance company is intrusted with sums of money belonging to outsiders on condition that when required, or upon agreed notice, they shall be repaid. Any intelligent clerk in such a firm may be well aware that the profits of the firm are earned by a doubly speculative use of this money which belongs to other people; it is employed by the firm in speculative investments which do not essentially differ from betting on the turf, and the cash in hand or other available assets are kept at a minimum on the speculative chance that depositors will not seek to withdraw their money, as they are legally entitled to do. In a firm which thus lives by speculating with other people's money, is it surprising that a clerk should pursue what seems to him substantially the same policy on a smaller scale? It may doubtless be objected that a vital difference exists in the two cases: the investor who puts his money into the hands of a speculative company does so knowingly, and for some expected profit; the clerk who speculates with the firm's money does so secretly, and no possible gain to the firm balances the chance of loss. But even to this objection it is possible to reply that recent revelations of modern finance show that real knowledge of the use to which money will be put cannot be imputed to the investor in such companies, and that, though some gain may possibly accrue to him, such gain is essentially subsidiary to the prospects of the promoters and managers of these companies.
Wherein Speculation Differs.
It is true that these are not normal types of modern business; they are commonly designated gambling companies, some of them actually criminal in their methods. But they only differ in degree, not in kind, from a large body of modern businesses, whose operations are so highly speculative, their risks so little understood by the investing public, and their profits apportioned with so little regard to the body of shareholders, as fairly to bring them under the same category. In a word, secret gambling with other people's money, on the general line of "heads I win, tails you lose," is so largely prevalent in modern commerce as perceptibly to taint the whole commercial atmosphere. Most of these larger gambling operations are either not illegal or cannot easily be reached by law, whereas the minor delinquencies of fraudulent clerks and other employes are more easily detected and punished.
But living in an atmosphere where secret speculation with other people's money is so rife, where deceit or force plays so large a part in determining profitable coups, it is easy to understand how an employe, whose conduct in most matters is determined by imitation, falls into lax ways of regarding other people's money and comes in an hour of emergency to "borrow" the firm's money. This does not excuse his crime, but it does throw light upon its natural history.
When it Will Cease.
Publicity and education are, of course, the chief instruments for converting illegitimate into legitimate speculation, for changing commercial gambling into commercial foresight. This intelligent movement toward a restoration of discernible order and rationality in business processes, by eliminating "chances" and placing the transfer of property and the earning of industrial gains on a more rational foundation, must, of course, go with other movements of social and industrial reforms which aim simultaneously at the basis of reformation of the economic environment. Every step which places the attainment of property upon a sane rational basis, associating it with proportionate personal productive effort, every step which enables men and women to find orderly interests in work and leisure by gaining opportunities to express themselves in art or play under conditions which stimulate new human wants and supply means of satisfying them, will make for the destruction of gambling.
Gambling Don't Pay.
Two-fifths of all the crimes committed every year are estimated to be attributable to race tracks. Five men have been convicted this year of stealing money from the United States postoffice, and every one of them confessed he lost the money at race tracks. The mania for gambling is growing stronger, and as it grows the defenses of honesty crumble away.