THE FLOOR TRADER AND THE SPECIALIST 209 
When the State tax of $2 was first laid, no very perceptible 
difference was felt in the market. Of course, the floor trader’s 
risks were increased and his profits lessened, but no particular 
economic harm was done. But when the tax was doubled by 
the addition of the Federal tax the differential was sufficient to 
be of considerable importance. The Stock Exchange authori- 
ties, however, did not at the time appear before any Committee 
of Congress to “protest.” They considered the tax a war 
measure and felt that even though the stock market suffered by 
it they must patriotically do their share in bearing the burden 
of the war. 
But the continuation of these taxes into peace times has 
proved distinctly harmful. For the imposition of a heavy tax 
nn the sale of securities, which are really credit instruments, 
amounts to and results in placing a dangerous burden upon 
credit itself. The untoward results of the tax are not dramatic 
hor vivid; nevertheless the tax constitutes an unseen drag and 
brake upon all large-scale American commercial and industrial 
enterprises.” It remains to be seen whether the United States 
can really function as a creditor nation and at the same time 
levy excessive and burdensome taxes upon its security markets. 
This whole question of the national advisability of over- 
taxing sales of stocks is intimately related, not simply to the 
livelihood of the various classes of security brokers and dealers 
in and out of the Stock Exchange, but to the security investor 
from whom the tax is really collected. The tax has been dis- 
cussed in connection with the floor trader because its uneco- 
nomic and harmful effects have in his particular case been most 
clearly and directly manifested. 
The Specialist.— Returning again to the subject of dealers 
in the Exchange, we must next consider the specialist, a most 
important factor both as a dealer and a broker in the market 
place of today. For, as we will shortly observe, the specialist 
may execute orders in stocks either for himself or as an agent 
“1 See Appendix VIIIb.