The air is thick with signs and evil portents: Stop-loss orders, breaks, raids, slumps, more margins, are in everybody’s mouth. The path to fortune is emphasized as slippery by every adjective of peril, and is hedged with maxims, over each of which is dangling, like a horrible example, the corpse of a ruined speculator.
A too subtle analyst might suggest that this presentation of opportunity and restraint, while apparently incongruous, is the most fascinating form of temptation. But subtlety, except in manipulating stock values, is not a Wall Street characteristic. The Stock Exchange is an arena where men fight hand to hand, head to head. Beneath the conventions of courtesy, each man’s fists are guarding his pockets and his eyes are on his neighbor. Such a vocation breeds courage, quickness, keenness, coolness. Weak men and fools are weeded out with surprising celerity and certainty.
Wall Street men are frank because they have learned it is wisest. The average commission broker secretly regards his clients with a feeling of benevolence delicately tinctured with contempt. Experience teaches him to use a favorite professional phrase, that there are times when “you can’t keep the public out of the market with a club,” and that when engaged in stock operations they usually display the judgment of a child picking sweets out of a box. His first care, naturally, is to protect himself, financially and otherwise, against the losses which ensue. Hence he surrounds their transactions with every legal and friendly restraint. But his existence depends on their success, or in replacing them. The broker, therefore, is quite as anxious for his clients to make money as they are themselves. More profit, more margin; more margin, more commissions and less risk. There you have it in a nutshell.
The stockbroker says to the public: “My dear sir, here is an open market. Nowhere else can you get such large and quick returns on so small an investment. For these opportunities I charge you the ridiculously small percentage of one-eighth of one per cent., and loan you, besides, ninety per cent. of your investment. Could any man with a proper regard for his wife and children do better by you? You own whatever security you buy, and get its dividend. Your margin is your equity in it. In property whose market value fluctuates so widely and rapidly, I naturally require you to keep your margin at the per cent. agreed upon. If, unfortunately, it becomes exhausted, I, as mortgagee, foreclose at the best price obtainable. I shall be pleased to execute all orders with which you may favor me on the above basis, in all securities dealt in on the New York Stock Exchange, reserving to myself, of course, the right to refuse to carry any security I do not care to loan my capital on. Some are risky, some safe, some inactive. All speculation implies risk.
“I beg you to remember my relation with you is only to execute your orders. You must use your own judgment. I should advise you, nevertheless, to keep in the active stocks. Opportunities for quick and profitable turns in them are more frequent, and the broader the market, the closer the trades, and the less the difficulty of disposal. Union Pacific, just now, looks good for a rise. They tell me, confidentially, that the Rockefellers are buying it, but I know nothing about it. It acts all right. Mr. Jones, this is my partner, Mr. Robinson. I’ve just been telling Mr. Jones, Robinson, that we hear the Rockefellers are buying U. P. There it is, three-quarters, on the board now——”
And the broker glances over the quotation board, grabs his hat, and flies to the “floor,” shaking his head and saying to himself: “I’ll give that fellow just six months to drop his wad.”
Well, is it his fault? He has been honest with you, frank with you. Be sure he will help you make money if he can.
“I did my best for him—damn fool!” is the mental summary inclosed along with many a closing-out statement.
To the visitor accustomed to regard Wall Street as a vast faro layout, its very face should be a striking object-lesson.
Emerging from the lofty and beautiful hallway of the Empire Building, those stupendous heights of stone and glass which confront him in solid squares are evidently not the creations of the baccarat table and the roulette wheel. The most dignified temples of chance are designed to shelter pleasure and frivolity. These huge homes of the corporation and the bank, with entrances as sternly embellished as palaces of justice, are oppressively significant of business.