CHAPTER V 
THE DANGERS AND BENEFITS OF STOCK 
SPECULATION 
Attitude of the Uninformed.—The topic of speculation is 
an old and favorite theme with moralists as well as economists. 
Probably no factor in modern economic life is more frequently 
discussed, more generally condemned, and more rarely studied. 
Nor is this any new condition of affairs. Even the Middle 
Ages resounded with complaints against the “forestaller,” as 
the “bull operator” of that far day was commonly known. 
Something magic there is about the ten-letter word “speculator™ 
today, which in a moment can make the average man exceed- 
ingly suspicious, although in most cases he could not to save 
himself explain clearly and from an economic standpoint just 
what speculation is or why it is so reprehensible. In his mind, 
too, the subject of speculation is often exclusively related to 
the Stock Exchange, in spite of the fact that speculation is a 
universal economic force and pervades all business. But per- 
haps he has heard of great fortunes gained or lost “on the 
Stock Exchange,” and, without endeavoring to ascertain the 
accuracy of his information in any way, he is left with the feel- 
ing that there must be something fundamentally wrong about 
any place or institution where such things can occur. The 
prejudice against speculation and speculators, although rarely 
based upon actual facts or economic knowledge, is nevertheless 
widespread and deeply rooted. 
Certain Undoubted Evils of Speculation.—There is, of 
course, a genuine basis in both theory and practice for this 
perennial protest against speculation. Not even the stoutest 
defender of speculation, whether in securities or in anything 
ly