THE PRICE OP WHEAT 257 



Not only is it true that "the local bucket shop is as effica- 

 cious" as the board of trade in enabling the "novice prophets " 

 to exploit their theories and lose their money, but it is proving 

 itself to be more so. Varying estimates assume that there are 

 from 10,000 to 25,000 bucket shops scattered throughout the 

 whole country. This is ample evidence of the profits of the 

 business. Competent observers have estimated that these es- 

 tablishments have deflected from the regular speculative ex- 

 changes from 50 to 75 per cent of the business that would 

 otherwise go to them. The New York stock exchange requires 

 the speculator to deposit a 10 per cent margin on his transac- 

 tions, and the smallest unit traded is 100 shares. The consoli- 

 dated exchange in Chicago requires a 5 per cent margin, with 

 10 shares as a minimum unit traded. These minima are large 

 enough to keep out a large class of persons with small capital 

 whose operations are pure gambling. The bucket shop, how- 

 ever, usually requires a margin of only 1 per cent, and the 

 minimum unit traded varies from ten to two shares. The 

 bucket shop is prepared to do business with a half point margin 

 on two shares. What is true of stock is also true of wheat as 

 to the relative size of margins required and units traded on 

 regular exchanges and on bucket shops. Consequently the 

 bucket shop affords greater opportunity than the exchange to 

 "play the market" and it is more frequently sought by those 

 who have little capital and less knowledge on which to 

 "speculate." 



The professional speculator has a true economic function in 

 our system of distribution, but gambling by outsiders is per- 

 nicious, and should be done away with as soon as this is practi- 

 cable. Such gambling, however, is not more pernicious when 

 done on the floor of a bucket shop than when done on the floor 

 of the Chicago Board of Trade, a fact recognized by the United 

 States Circuit Court of Appeals in more than one instance. In 

 view of the business which the bucket shop is diverting from 

 the regular exchanges, it is but natural that the latter should 

 oppose the bucket shop with all their powers. Greatly as the 

 boards of trade pride themselves over the high and lofty plane 

 of honor upon which they transact business, they do not hesi- 

 tate to designate 1 uncompromisingly as "pernicious gambling" 

 1 Hill, N. Y. Commercial, Sept., 1903. Indus. Com., Vol. 6. 



