Among the latter half of the community were, of course, included those who were themselves fond of patronizing the public tables.
Speculation in stocks, bonds and produce was unknown in New Orleans previous to 1880. To its introduction may, perhaps, be measurably attributed the decline in the volume of gambling in the hells. Once introduced, it rapidly grew in favor with many of those who had been accustomed to look for that excitement which they regarded as their highest recreation in gambling upon the turn of a card. Whether the introduction into the city of the speculative mania and the decadence of the gambling saloons stood to each other in the relation of cause and effect it might be difficult to say; they certainly occurred about the same time. At first, speculation was chiefly confined to cotton, which bore the same relative position to New Orleans that wheat sustains to Chicago. Gradually, however, mining stocks and gold grew in favor of those who were disposed to venture their money upon options, as affording even greater fluctuations[fluctuations] in value.
When trading in future deliveries was first suggested upon the floor of the New Orleans Cotton Exchange, it aroused violent opposition. Its opponents pointed out that the city already lacked sufficient capital to handle the cotton crop, of which New Orleans was the distributing centre, even in a legitimate way; they showed that a vicious element would be imparted to values; and called attention to the disastrous effect which such business might have upon the price of cotton. In reply to these arguments, it was urged that New York was already doing a gambling business in cotton futures, amounting to 25,000,000 bales per year, which was four or five times as much as the entire cotton crop of the whole country; that New Orleans was sending a great deal of money to the Atlantic seaboard to be invested in futures; and that unless dealing in speculative deliveries was sanctioned in what ought to be the greatest cotton mart of the world, a large proportion of the city business would be diverted to New York, even if the latter point did not absorb a great deal of the “spot” trade.
The result of the discussion was a triumph for the advocates of speculation, and in February, 1880, gambling in cotton futures began upon the floor of the New Orleans Cotton Exchange. At first, it did not seem to commend itself rapidly to public favor. Only 2,083,100 bales were sold during the first year. The rapidity in which it grew in favor is shown by the sudden increase in transactions in futures. In 1881, 10,115,800 bales were sold, which figures increased in 1882 to 16,171,000, which was fully double the amount of cotton the city received. The advocates of stock gambling pointed to this increased volume of business as the triumphant vindication of the position which they had assumed. New Orleans, they said, had in less than three years built up as large a gambling business as that which was carried on in New York. But experience proved that speculation in cotton futures reached its highest point in 1882, from which period it began to decline. At that time, however, it was practically universal. Clerks, samplers and weighers of cotton were among the most numerous patrons of the speculative market. Men of this class appeared to believe that because they have some business relations with cotton, they were thoroughly conversant with the market and that their casual handling, sampling or classifying of bales rendered them competent judges as to the future course of events. New Orleans speculators proved to be but pigmies, as compared with those of New York. In fact, the Southern market was so generally wrong that it became a common saying in the “country” that if one wished to bet right on the course of the cotton market, he should always bet against the combined wisdom of New Orleans. It may have been because the Eastern city had more capital, but the tangible result was that[was that] in the single year, 1882, New York was estimated to have relieved the metropolis of the Southwest of $4,000,000, of her surplus cash. The loss fell chiefly upon those who were less able to bear it. The employes of the warehouses had ventured heavily. Even the janitor or porter bought his little “jag” of a hundred bales.
The withdrawal of such a large quantity of money during a single year resulted in bringing about a financial stringency in New Orleans, and the tightness of money operated as a check upon speculative gambling, which has never since blossomed out in the same magnificent luxuries. Among those who had been particularly pronounced in their advocacy of the sale of futures upon the Cotton Exchange, not less than fifty went to the wall, and for a time the more conservative element managed things in its own way. Some idea of the extent to which this species of gambling mania had pervaded all classes of citizens may be gathered from the statement—which cannot be controverted—that during the crop year of 1881-82, fully 15,000 people bought cotton futures at one time or another, and that at least one man in four in New Orleans was accustomed, now and then,[then,] to “take a little flyer.”
In 1883, the volume of transactions of this character declined to 12,041,900 bales; in 1884, to 9,588,300; in 1885, 8,037,100; and in 1886, to 7,474,900 bales, or less than half what it had been. Moreover[Moreover] the business was confined chiefly to the larger dealers, the “small fry” letting the market religiously and severely alone, and since 1886, transactions have fluctuated in quantity. In 1887, sales of future deliveries aggregated some 11,239,000 bales; 1888, 8,947,800; and in 1889, 6,575,000 bales. Since the introduction of this description of gambling in New Orleans, about 92,223,900 bales of future cotton have been sold in that city, upon which margins of $276,671,700 have been put up, allowing a liberal commission to the brokers who managed the business; these figures represent a payment, virtually upon a wager of $73,409,933 by the losers to the winners. But no matter whether the hotly contested battle was decided in favor of the bulls or whether the bears were triumphant, some way or other New York always contrived to come out ahead, and it is a generally conceded that the thrifty manipulators of the latter market succeeded in extracting from the pockets of their New Orleans brethren a sum variously estimated at from $12,000,000 to $20,000,000.
Several attempts were made to prohibit this species of gambling by law, but the dealers in futures proved too strong. Neither did public sentiment condemn this sort of gambling, and many persons who would have scorned to enter a faro bank, bought options in cotton without compunction. Speculative craze during this period reached its maximum, and was not confined to cotton alone. Three or four “bucket shops” were started at which one could buy almost anything—wheat, or railroad and mining stocks. With the general decline of their business, the “bucket shops” also went by the board.
At present, however, the business is confined chiefly to a few operators and brokers. The general public views the situation with little interest, being indifferent as to whether A wins from B to-day and B recovers his losses to-morrow, or vice-versa.
Speculation in stocks has always been far less active than in cotton. Far removed from the commercial centre of the country, New Orleans has gambled but little in the general list of stocks, the greater portion of the business done on the Stock Exchange being confined to transactions in State and City bonds, a few local stocks, and—of late years—in mining shares. Nevertheless of the $160,000,000 worth of bonds and other securities dealt in during the past ten years, it is estimated that fully four-fifths were bought and sold on speculative account. The frequency with which the Louisiana law-makers have legislated in reference to State debentures have caused the latter to fluctuate violently. Large fortunes have been rapidly made and quickly lost, the case of the Confederate Commander, Gen. J. B. Hood, affording a striking illustration of the truth of the latter statement.
Legislative action in reference to the State debt in 1879, when the interest was reduced, and again in 1884, regarding what is known as the “interest amendment” gave rise to heavy speculations. Again in 1887, a mania for gambling in land and mining stocks broke out, which continued until 1889. In the latter year, the Mexican Lottery attracted much interest, and winnings and losses were alike numerous.