THE GAMBLING ENGLISH

Taranaki Daily News, Volume LV, Issue 305, 17 May 1913, Page 10

THE GAMBLING ENGLISH

i «. _ ( STOCK EXCHANGE METHODS. ( 1 THE INDOMITABLE "LAMB." j '■ l London, March 20. ' The London Stock Exchange is closed j against the public. You may look down ' upon the uproar of Wall Street from the l visitors' gallery, but if you would see f the London Exchange at work you must l take a considerable risk. A friendly I broker will pilot you through, but mem- ' bers resent the presence of a stranger, ( and if you are detected you become the ? centre of a demonstration which, if not ( really hostile at heart, is anything but 1 pleasant. Members shout and hustle ( round the detected intruder, and ■ he is '<■ glad to escape at a run by the handiest ' exit. But while the Exchange likes to | work free from the public gaze during its regular hours, it has no such modesty after 4 o'clock. Every afternoon at the ' official closing time hundreds of the members empty into Throgmorton street, ' and no matter what the weather, stand about for an hour or more actively calling prices and transacting business. In a neighbouring courtyard,, reached by an , alley from Throgmorton street, and un- j protected by a roof, the American market is continued until 8 o'clock. The difference between New York and Lon- ■ don times means that American closing ( prices are not known here until after , nightfall, so that the Stock Exchange remains informally open until then. In all the streets and intricate byways wliich thread the City proper, you meet all day between half-past 10 and 5 o'clock, hatless, well-groomed men, nearly all of them clean-shaven, on their way to or from the great gambling theatre. The traditional anxious face of the city man is almost entirely absent. The thousands of members who do business on the London Stock Exchange are apparently the most light-hearted people in I the world. They go laughing to their business. Round the baskets of every fruit pedlar—and there are scores of them within a hundred yards of the exchange—you see throughout the day little groups of members and their clerks munching apples and gulping oranges. The vendors of the latest mechanical toy drive a big trade throughout the year in Throgmorton and Lombard streets, with these over-grown city boys, and the enjoyment with which the buyer walks off with his toy shows that he has not always his children in view when the purchase is made. Then the city man is an inveterate story-teller. More good "yarns" begin on the floor of the House than perhaps any where else in the world. THE HOPEFUL PUBLIC. You have not to search far for the cause of this gaiety. The great major- ! ity of the members are gamblers. Of ' course all, or nearly all, do business upi on a commission basis, but apart from ' that, very few abstain from speculation * on their own account. Commissions ' would not go far to make up the large i incomes earned by London's stockbrok- : ers. They gamble amongst themselves, ■ but more' important still, they gamble ! against the great hopeful British pulit lie. The public supports the Stock KxI change just as it supports the raee- - course. Australians are charged with an f excessive weakness for gambling, but probably no, people in the Kmpire venl' tare so heavily and insistently as the ? moneyed class'of London. You rarely R meet'a man with any means here who, R as you get to know him. does not confess that lie has at one time or another had a little tilt at the Stock Exchange, and you never meet one who does not - admit of absolute failure. They will all II advise vou that it is a fool's game, and - that vou are bound to lose in the long I run. as an amateur alwa,ys is in a g-ime II against a professional. And then, liuh ally, thev nearly all wind up by asking i- .on if by anv' chance you happen to h know of 'anything good in the way of p -Australians." The hardest bitten will - :::vnriabiy return to the sport if armed with what he regards as inside infornni-

tion. He may know quite wcil that iu-j side information only escapes when the insiders have done their buying, or sell-1 ing, and have made the escape easy. AN INVETERATE BULL The so-called English investor is, you find. in nearly every ease a spuui.i.or. 1 ..-.uJ I Vtho abhor gambling every day buy stock, not with an eye to dividends, but with an eye to a rise and a turnover, and this is especially true of English women. The woman with means is one of the main supports of the London Stock Exchange. Thousands who would not put a penny on a horse or go near a gambling 'table will readily take a broker's or a friend's recommendation about cheap shares. It is interesting to notice, too, that the public is nearly always a bull. Nineteen outsiders out of 20 have courage enough to buy a stock on the chance that it will improve in price, but very few indeed •will sell it on the chance that it will fail. .Selling something which they have not got is an operation which does not appeal to the crowd. This makes it fairly easy for the professionals to score consistently, Among the old Stock Exchange hands you find that tlie. great majority are, in most cases, bears. The} might buy occasionally to give an unpopular neglected share a start, but they look to make most of their money by unloading shares which ,'iave been ly bought by the public at a tMie wiVn they have reached what .lie cabulatiw professional deems to be an and unprofitable level. Lately, of course, the bcirs haw. lid things all their own way. Prices were abnormally high at the commencement of tlie Balkan war, and there was at once a sharp slump in quotations. For a time, however, the public continued optimistic. Money continued fairly plentiful, and people, tempted by the prospect of shares which had in three or four weeks lost perhaps one-fifth of their value, rallied strongly. But as the international complications on the Continent increased, as money became dear, and as the Mexican trouble developed, there was a falling off in outside enquiry. For quite three months the Stock Exchange has been left almost entirely to the professionals, and the tendency" among these has been to bear rather than to bull prices. Consequently, lower and lower levels have been reached. Stock and share lists abound in cheap securities which offer at their present values a very high rate of interest. About once a fortnight the insiders do a little active buying in the hope that the public will take up the running, but so far all these revivals have failed to attract outside notice, and prices continue to drop. For once the British public, having been many times caught in the past six months, is decidedly shy and even nervous. Those who are tempted to buy hold off in the hope that the bottom is not yet reached, and that still greater bargains will be obtainable. EXAGGERATION THAT PAYS. The bears are masters at the art of exaggeration. The consequence® of war breaking out between Austria and Russia were exploited to the utmost. In listening to the prophets of evil, one would scarcely have been tempted to ,buy even gilt-edged securities at half their usual values. "A big war on the Continent," said the bears, "would mean the end of all things," and they were scarcely more cheerful about the American Presidential elections, the terrible things that would be contained in Dr. Woodrow Wilson's inaugural address, the recent threatened railway strikes, and the real significance of Mr. Lloyd George's pending land campaign—anything. in short, is good enough, at a time like this, when nerves are on edge, to force down values. During the past two or three weeks the solvency of the German Empire was seriously challenged. It was again and again pointed out by a few sane people that the raising of £50,000,000 would not embarrass the German people, and that German finances are under far better control against shock and panic than are those of Great Britain. But the alarmists carried the day, and prices fell accordingly/The position of the great army of bears, who at tlie present time have almost complete control of the situation, is that they have heavily sold practically all descriptions of stock, and they do not wish to buy "back until they have extorted the largest possible profit from their ventures. Immediately they start to cover in a wholesale way, prices will begin to advance sharply, and there will be a veritable orgy of buying by the bulls, and probably, too, bv the general public. The thousands of people who have lost heavily within the last six months, and who, in consequence, have sworn that never again will they venture into the market, will be found once more in the thick' of it. THE WEALTH OF BRITAIN. Nothing is more impressive of the wealth of this country than its capacity to absorb new issues even at the present time. Repeated warnings have been issued about the danger of the situat : on;' it has been again and again ,;sserted that if more large loans and calls for money for industrials were put w>- n the market they would probably lead to financial panic. But despite all this there has been week after week almost a succession of prospectuses calling for millions of money. And all of it has been found. True,' the underwriters l.ave been left with exceptionally large holding on their hands, but that the ventures have been underwritten at all sliow how incalculably strong the finances of the United Kingdom are. There appears even to-day to be no limit to the aiiiount of money to be raised here on gilt-edged securities, such as. for instance. Australian State credit, provided the ordinary terms are slightly improved. The underwriters appear to show no concern when saddled with most of the money. They trust confidently to the great demand there always is from various tii.stl ■igeneies for safe loans at a fair rate of interest. This money-finding capacity is the more extraordinary now because the great industrial boom of the last few vears has provided profitable home investment. which does not always exist. Nevertheless, it is even easier to laise monev in large quantities in Paris ti.an it is in London. Bi<r international loans are much more readily taken ill the French capital than they are here. Gambling is mad" dangeriuslv r.isv nil the London Stock Exchange by the credit svstem which obtains. The market balances fortnightly, when prices are ofl'iciallv made up at "the middle." Those speculators who are not able, or who do not wish to pay cash, pay interest upon the official value of tie share as declared each fortnight, r. eeiyimr from their stockbrokers i»i cash, in the ease of a rise, the difference between the current make-up pri'-e nn-1 th" pr - vions -lie. and paying ou: the dilWeiK" if there has been a fall. By special arrangment settlements are sometimes made to cover longer periods, but the bulk of the business is upon the fort- . nightly lasis. .Inst now it ranges from to H per cent. But even on this , charge it is easy to understand the ■ temptation to the public. Special care is taken to prevent gambling: by employees. ! and stockbrokers are liable to be sum- ■ marily struck off the list if thev give credit to anyone who is not a principal i —Sydney Telegraph correspondent. 1 ' .