APPENDIX 
589 
those whose opinions as to what risks are worth while differed from 
ours. . . . Every transaction of buying and selling necessarily 
involves a risk. Betting on merely incidental results of particular 
contests is the assumption of a risk which did not exist before the 
bet was made. It would seem as if a fair distinction of this kind 
might be made, speculation being defined as the assumption of inevi- 
table business risks of fluctuating values; gambling as the assumption 
of purely artificial risks in connection with some fortuitous event.” 
(H. C. Emery, “Should Speculation Be Regulated by Law,” Regulation 
of the Stock Exchange, pp. 830-832.) 
(Vb) “When carried on in connection with either commodities or 
securities it tends to steady prices. When speculation is free, fluctua- 
tions in prices, otherwise violent and disastrous, ordinarily become 
gradual and comparatively harmless . . . For the merchant and 
the manufacturer speculation performs a service which has the effect 
of insurance . . . The most fruitful policy will be found in meas- 
ures which will lessen speculation by persons not qualified to engage 
in it. In carrying out such a policy exchanges can accomplish more 
than legislatures . . . We are unable to see how a State could 
distinguish by law between proper and improper transactions, since 
the forms and mechanisms used are identical. Rigid statutes directed 
against the latter would seriously interfere with the former . . . 
Purchasing securities on margin is as legitimate a transaction as the 
purchase of any property in which part payment is deferred. We, 
therefore, see no reason whatsoever for recommending the radical 
change suggested, that margin trading be prohibited.” (Hughes 
Commission Report of 1909 on Speculation.) 
(Vc) In an address “The Work of the New York Stock Exchange 
in the Panic of 1929” delivered in Boston, June 10, 1930, President 
Richard Whitney stated: 
“A third lesson from the panic is, in my opinion, the necessity of 
maintaining flexible requirements concerning margins, not only upon 
security collateral loans, but also upon stock brokers’ customers’ 
accounts. It was fortunate that at the beginning of the panic both 
classes of margins were unusually high. It was equally advantageous 
during the panic that both classes of margin requirements were dras- 
tically reduced. Sometimes students of finance speak as though the 
sole necessity was always to maintain very high margins. Actually, 
margin requirements should be flexible, and high or low as circum- 
stances dictate. For precisely this reason I am opposed to legislative 
enactments compelling inflexible and invariably high margin require-