The New York Stock Exchange member will tell you that the evil of bucketshopping is that the bucketshopper is tempted when the public is long on stocks to depress the market by heavy short sales. On the other hand, the bucketshopper urges upon you that his business is gambling against fluctuations which he has no hand in making and that the financial powers of Wall Street resort to the same trick that he is occasionally accused of. The "interests" know at every hour in the day approximately how many shares of stocks have been borrowed for delivery against "short" sales or are being carried on margin for the long account. They know what the public's short interest or long interest is, and they, too, have it in their power to shake out the public at any moment they choose. Worse, it is common knowledge that this practice is continually resorted to. Stocks are put up and held up on bad news and marked down and held down on good news or no news at all. News is withheld and is manufactured to suit occasions. For years the market has been thimble-rigged to a frazzle. Margin-trading "suckers" have been milked to a finish. George E. Crater, Jr., writes:
Margin trading on the New York Stock Exchange is the most dangerous and destructive form of gambling known, because, being "legal" and therefore "respectable," it allures hundreds of thousands of people who would never think of risking their money at "faro," "rouge-et-noir," "roulette," or any of the other games of chance. Statistics show that more people are ruined physically, morally and financially by stock gambling than by all the other forms of ordinary gambling combined. Monte Carlo is a Christian philanthropy compared with "Wall Street." You have quite as good, if not a better chance to win a fortune at Monte Carlo than you have by putting up "margins" against Stock Exchange bulling and bearing, and if you ruin yourself at Monte Carlo the proprietor will at least refund enough of your money to pay your way home. The man who "goes broke" on "margins" finds no relief at his service on the Stock Exchange or among the brokers. There would not be so many millionaires in this country if there were not so many fools ready to throw their money away on margins.
A howl of condemnation is raised against horse-racing. Newspapers, periodicals, politicians, enthusiasts, crusaders, and charlatans in every walk of life, are encouraged to make a big noise. Horse-racing, like bucketshopping, is an avenue for speculation—gambling—and it keeps much money out of Wall Street. Fakirs, who are the tools of Wall Street, collect from Wall Street for their services and at the same time make moral or political capital of their zealousness in crusading against such Wall Street gambling competition.
The small fry mining promoter, who is not a member of the Stock Exchange, pays no toll to the big game, is beyond the discipline and control of the governing body of the New York Stock Exchange and is not a part of the machinery, sets up a competitive business which caters to the gambling instinct in the way of fluctuating mining stocks. The speculating public gets action, likes it, and invests money that might have been used in margin-trading on the New York Stock Exchange or for "investment" in the constantly fluctuating low-priced industrials or higher-priced mining stocks that are sponsored by big interests with New York Stock Exchange affiliations.
Promptly the machinery of Wall Street is used to crush him. Column upon column is printed in the magazines and newspapers about Get-Rich-Quicks. A conviction for crime is obtained of a real Get-Rich-Quick offender—a little fellow who is guilty, but no more so than his "licensed" brother higher up, who is doing infinitely greater damage. The one that a coterie of high-class Wall Street thimbleriggers are really "after," because he thwarted them in their swindling operations by exposing them in his newspaper, but against whom they can not make a case, has a skeleton in his closet. They bring it forth, dangle it in the air, make the public think he, too, must be a scoundrel, and he is raided by a Government agent during the uproar; and they "get away" with it. The "righteous" crusade against "Get-Rich-Quicks" is press-agented to the limit. The public "falls" for the "dope." At last the Government has acted to protect investors!
Wouldn't it wilt you?
Were P. T. Barnum to be reincarnated and his hum-bugging mind by some miracle expanded a million times, it would still be impossible for him to conceive such a gigantic faking of the American public as it has been put to in the last few years.
And the public isn't "on." Shrewd schemers on Wall Street keep pulling the wool over the eyes of the "sucker-public," and not only see no reason why they should discontinue the practice but find it very lucrative to continue doing it.
THE MARKETING OF MINING STOCK
As a rule, it takes much money to make a paying mine out of a promising prospect. Later on in the mine's progress, through the constructive period, other very large sums are generally required to pay for the blocking out of an ore reserve and to supply milling facilities for the reduction of the ores.