Speculation and Brokers’ Loans 219 
ities in prices. Since the interests of the speculator 
and of the public are thus normally parallel, there is 
a premium put on wise and beneficial speculation and 
a penalty on unwise and injurious speculation. 
It is unfortunately true, however, that in spite of 
the penalties for unwise and injurious speculation 
much speculation is of this latter character. This is 
partly due to the fact that many engage in specula- 
tion who have no adequate equipment for so doing, 
and no independent judgment as to the causes mak- 
ing for a rise or a fall in prices. The ultimate justifi- 
cation for speculating must rest in the wisdom and 
independence of those who speculate. Speculation 
which merely follows a “tip” has no independent 
value. If every person who speculates for a rise or 
a fall should do so on a basis of his own best inde- 
pendent judgement, the chances are that the stakes of 
those who are overconfident in either direction would 
largely offset each other. 
Speculation That Is Gambling 
During the recent years of the long bull market, 
no doubt too many of the general public were be- 
guiled into the folly of entering the speculating mar- 
ket as individuals. Swayed by a superstitious regard 
for “tips,” they played the game alone without the 
benefit of investment counsel, and without partici- 
pation in investment trusts conducted on sound prin- 
ciples. But as individuals the general public have 
usually little special knowledge of market conditions, 
and their participation in the market except through