COTTON 235 



While this was a legitimate enterprise, it was 

 nevertheless largely speculation, each merchant 

 gaining or losing in proportion as his judgment was 

 good or bad. 



LEGITIMATE AND ILLEGITIMATE SPECULATION 



This sort of speculation all of us are given to: 

 the merchant who purchases early in the season 

 because he anticipates higher prices later; the far- 

 mer who secures feeding stock in the belief that 

 prices will advance, netting him a profit greater 

 than the mere value of the finished animal at the 

 time of purchase; the housekeeper who purchases 

 coal in summer, believing that with the coming of 

 winter prices to the consumer will advance; the 

 consumer of any commodity who looks ahead and 

 anticipates a higher price than that commodity 

 is then commanding each is engaging in specu- 

 lation, pure and simple, but nevertheless doing a 

 legitimate thing, dictated by wisdom and foresight. 



Let this idea of speculation be distinguished from 

 the professional speculative phase which approach- 

 es or is in every sense a ' gamble." When you 

 make a purchase of real estate you may do so be- 

 cause of immediate needs: or you may make the 

 purchase in expectation of a rise in value : you have 

 need for it now or anticipate a demand for this 

 holding in the future. It is now worth something 

 to you you anticipate that it will be worth more 

 at a future time; hence you make your purchase. 

 If your judgment is good, if it is accurate, you profit 

 on your risk; if otherwise, you may lose. This 

 trade this phase of business or commerce is 

 entirely consistent with morals, with commercial 

 standing, with business principles. 



