The same principles will apply to *speculation in stocks*, which is in many minds identified with dishonest gain. Stocks are marketable commodities, equally with sugar and salt. They are liable to legitimate fluctuations in value, their actual value being affected, often by facts that transpire, often by opinions that rest on assignable grounds. Now if a man possess skill and foresight enough to buy stocks at their lowest rates and to sell them when they will bring him a profit, he makes a perfectly legitimate investment of his intelligence and sagacity, and in facilitating sales for those who need to sell, and purchases for those who wish to buy, and thus preventing capital from lying unused, or remaining inconvertible at need, he earns all that his business yields him by the substantial services which he renders.
*The legitimate business of the merchant and the broker is contingent, as we have seen, on fluctuations in the market*, and he who has the sagacity to foresee these fluctuations and the enterprise to prepare for them, derives from them advantage to which he is fairly entitled. But it is precisely at this point that the stress of temptation rests, and the opportunity presents itself for dishonesty in ways of which the laws take no cognizance, and on which public opinion is by no means severe. The contingencies which sagacity can foresee, capital and credit can often create. Virtual scarcity may be produced by forestalling and monopoly. When there is no actual dearth, even famine-prices may be obtained for the necessaries of life by the skilful manipulation of the grain-market. So too, in the stock-market, bonds and shares, instead of being bought or sold for what they are worth, of actual owners and to real purchasers, may be merely gambled with,—bought in large amounts in order to create a demand that shall swell their price, or so thrown upon the market as to reduce their price below their real value, and all this with the sole purpose of mutual contravention and discomfiture. By operations of this kind, not only is no useful end subserved, but the financial interests and relations of the community are injuriously, often ruinously, deranged; while not a few private holders of stock have their credit essentially impaired by a sudden fall of price, or by the inflation of nominal value are led into rash speculations.