174 THE WORK OF THE STOCK EXCHANGE 
Yet, however confused the spectator’s mind may become 
at it all, the members of the Stock Exchange are so accustomed 
to the clamor of the market place that they are as a rule neither 
excited nor confused. As subsequent chapters may partially 
succeed in establishing, it would require years of patient study 
and observation, as well as no slight degree of imagination and 
intelligence, before an observer in the gallery could perceive 
the stock market below him with adequate knowledge and 
comprehension. But, as has been once stated,? if the onlooker 
from this vantage point possessed these several and difficult 
qualifications: 
He would see purchases for investments; he would see sales on 
behalf of persons wishing to convert their securities for one reason or 
another ; he would see purchases and sales for the dealers in odd lots 
to meet the needs of the small investor; he would see purchases and 
sales with a purely speculative purpose; he would see the floor trader 
buying and selling for the profit of the hour; he would see the arbi- 
trageur selling securities that he has bought in London, or Paris, or 
Amsterdam, or Berlin the same day, or buying here the securities he 
has sold on a foreign exchange the same day. Every transaction is 
recorded, and the quotations that go out are the result of all these 
manifold operations. They are the product of the judgments, tempera- 
ments, hopes, fears and doubts of the vast multitude that participate in 
them. It is a scene of competition; the conservatism of investment 
face to face with the enterprise of speculation; speculation in the 
expectation of a rise in pricesqwith speculation in the expectation of a 
fall; optimism with pessimism; and the resultant of this play of forces 
is the market price of the securities dealt in moment by moment, hour 
by hour. The exchange is the crucible in which all these various ele- 
ments are, as it were, chemically combined and concentrated to produce 
what we call market values. All these elements are indispensable as 
supplements and correctives of each other. Eliminate speculation and 
the conservatism of investment would arrest the development of the 
country. Eliminate speculation in the expectation of a fall in prices 
and the danger of inflation of prices would be constant. Without the 
free interplay of all these forces a market would not perform its func- 
tion of fixing prices for the purposes of trade and commerce. 
TT @ See Regulation of the Stock Exchange, pp. 531-532,