STOCK SPECULATION—DANGERS AND BENEFITS 13g 
their commitments, and thus led them to require higher margins 
from customers. The plenitude of business also tended to 
favor higher margin requirements, since it reduced the element 
of intense competition between brokerage firms which formerly 
led to keeping margin requirements at a minimum. The aver- 
age margin requirements of Stock Exchange firms have been 
very much higher recently than ever before, and unquestionably 
this has materially strengthened the whole brokerage business. 
The relatively high margins required by brokers before the 
panic of 1929, while they can scarcely be said to have effectually 
prevented intense public speculation, did operate to prevent the 
panic from becoming even worse than it was. Moreover, one 
of the most salutary steps taken by banks and Exchange houses 
during the crisis, was the lowering of margin requirements on 
security loans and customers’ accounts respectively. If there 
had been some law requiring an inflexible minimum margin, 
it might not have been possible to take such a step. Respecting 
margins, no formula can ever take the place of wise admin- 
Istration. 2° 
Inevitable Risks of Business Enterprise.—Speculation is 
fundamental to our present economic order of society and busi- 
ness, because it arises from the inevitable risks and the inherent 
vicissitudes of all industry and trade. Of course that extremely 
knowing class of people who write letters to the editors and 
orate from the soapbox on every possible occasion, often deny 
that there are any particular risks in industry. They delight 
to picture our larger industrial companies as fat jovial men 
labeled “Sugar Trust,” “Oil Trust,” “Beef Trust,” etc., who 
have not a care in the world except their riotous pastime of 
squeezing and robbing a small, frightened, bristly-haired, 
unprotected figure labeled “The People.” 
But the business man who has a responsible part in some 
enterprise with the avowed and shameless purpose of “making 
money’’—and it matters little whether the enterprise is a village 
% See Appendix Ve.