:
so far to impair the operation of the Compani s Acts, which have been of the greatest use throughout the world and without which many great enterprises could not have been com enced and carried out. But beyond the argament of inoot venienou it seems to me I have a much stronger argument, and oue the share brokers are clearly entitled to put before this Council. They admit very great evils do exist in this colony and that those evils arise out of transactions in shares and stocks, nu3, not to make any bones about it, out of excessive specu- lation and gambling in shares and sticks ; and they are perfectly willing to admit before this hon. Council by me that if any effective measures could be taken to stop this gambling in shares and stocks it would be not only im mensely to the advantage of the Colony but also to their particular advantage as an associa- tion and as individuals. Their complaint in re- ference to this Ordinance is that it will not in the least degree check, much less stop, the ovile of which complaint is made by the hon. member who has introduced this Bill and the other per- sons who, either within er without this Council, support it. The evil it is desired to stop is what is commonly known as selling short, that is a man going into the market and selling shares he has not in his possession an i not under his control at the moment, and which when the time comes he must go into the market and buy. We are quite willing to admit this Bill as it stands will probably do a great deal to prevent selling short. But is that the evil that is really complained of? The evil that is complained of is that gambling and speculation are rife in the Colony and many are deceived by it. With your Excel- lency's permission I will read what has been published, although I think it was scarcely intended to be be pablished, the memorandum written by the Acting Attorney-General at the time the Bill was introduced. (The learned Counsel read the memorandum, which has al- ready been published.) Now we are perfectly willing to admit that the evils which the late Acting Attorney-General points out in this memorandum do exist, and exist to a serious ex. tent, that a great many young men have been seriously injured and ruined by their share ape oulations, and that there has been a great deal of rash speculation and what might even be call- ed gambling. But the question arises, and it is the main question I wish to subunit for your consideration, can it be shown that all that rain. į all that rash speculation, all that gambling, or any portion of it, has been caused by short sel; ling? Can the supporters of this Bill point to any clanse which will interfere with it in the least deges or tend to stop it? There is no man who knows anything about the shara mar- ket here or what goes on there who could say positively that there had been any great amount of short selling, or that any man has been selling to any very great extent stock which was not in his possession, or which be had not entered into contracts for or which he had not under his control. One man possibly, and only one so far as I know, has suffered and baen ruined by short selling, a man whose case is now in the Bankrupter Court. The bulk of the transactions that go on hers do not involve short sales, and it is not the short sellers who are ruined them- selves or who cause the ruin of others. The mischief is not caused by bearing operations; it is caused by bulling operations. The per
ons who
are ruined are not those who are selling their shares for the fall, calculating they can go into the market by and by and buy them back at a lower price. That is hardly done at all. The persons who are rained are persons who have bought shares for the rise Any one acquainted with the business of the colony could enumerate hundreds of cases of young men who have suffered logs. Why? Be dause they have entered into a contract to buy shares forwar! livery in one month, or two months it may b or three months, at a price nearly always in advance of the market rate at the moment, but of course baar ng some propor- tion to it. They bought these shires not having the means to take them up and pay for them or they may be able to take them up and yet be io such a position that to do so would seriously amper them. They may have been in such a position as to be able to say, "Yes, when the tiraa comes we have our credit at the Bank or we can sell some property and get enough to ful. $1 oar contracts." Suoh men are seriously
cripple Other men have bought know- ing they could not possibly take
up the shares aud that they would have to sell then and pay the difference or give a prom s sory note for it. These are the class of cases. u the only casse to which the hou, mover of his Bill can point in su sport of it. I cannot say there may not have been a few casas in which persons have been rained by selling short. I don't think there are many such, I question whether one could be shown. but hundreds of men could be pointelt who have been ruined by buying for the rise and because when the day came on which they were bound to take delivery of the shares and pay for them those sares had falla in price instead of going up, and they either had o take them up at a price far in excess of their ma ket valus or else have had to allow the shares to be sold on the market for whatever they would fetch and go into d bt for the difference. Will the passing of this Bil interfere in the least with that class of business ? Why did those gentlemen go into that speculation? It is speculation, not legitimate business. It is ery hard to draw the line and say what is legi. timate business and what speculation org mi bling. Strictly speaking legitimate business would be when a man is buying shares for the purpose of investment. It's man baya with the ida of selling again within a short time and picketing the profits it is not investment, it is! speonlation. It is impossible to draw the line where that speculation becomes rasb speculation and gambling. I varios for every man according to the length of his purse and the strength of s backing. What might be perfectly fair spacu- fation for one man would be rash for another Can the legislature do anything to stop that? Can it do anything to prevent a man, if he thinks he sees his way to make a profit by a little gam- bling in sbares, signing a contract to take ap the shares three months hence at extravagant prices P Cau it prevent the shares falling in value? That man will do precisely the same! thing even though the numbers of the shares are mentioned in the contract be signs. It has been suggested that he would at least have a guarantee that the shares existod and th t thei youder was in a position to deliver them. Perfect- ly true; but no mischief has arisen from the! on-existence of that guarantee. There have ben very fav casos of meu W10 have failed to deliver the shares they have sold, or if they bave, it is because some one failed behind them; beanse there are so many ramifications, so many mou interested, that the failure of any man to make good his contract prevents thers from fulfilling their contracts. Those med who have suffered during the list three years will suffer equally off-ctually whether this Ordinance passes or not. It has been pointel sat in the public newspapers, and I think I am entitled to refer to it for the pur- poses of argument, that there are two or three biz spegulators in the Colony, extremely wealthy men, who carry on boaring operations. lowering the price of shares. Let us think of any one of these mu. Will the passing of this Órdi - nee interfere in the least with his operations P He is supposed to be extremely wealthy and to be in possession, or capable o gatting oss ssion to-oore ›w, of thousands of shares of any company he thinks fit to d a) in. Hgos into the mark-i to-taorrow and buys as many as baean lay heads on. let us svy 300. He enters into contracts. after the passing of this Ordinance, for the sale of 2 000 o ti u to be dalivared three months hence, at largely enhanced pric+s By his own operatious in buying and any other means at his dispo al he has raised the prica of the stock, and in every one of the contriota he enters into his specifies the numbers of the sharoa. He has then, they are lying in his sata And thuse shares, in lots of 25 or 50, ars sold to the same class of men as before, who will be just as eager after this Bill is passed to I make a little profit as they are now. And wh n the day comes what will be their position? It dpends upon this big operator. It may bare suite his purpose to allow the market to con. t uue to rise and the buyers may have been able to sell in advance and pocket their profit*; or it may not have suited his purpose in which Cage he has this 100 shares in roserve, which he sells out in lots of 25 at a time, each time at a dollar under the moa ket rate, and in the course of a month or two the market might drop sixty or seventy points. He has done it, not by playing with load d dice, noti
677
No comments yet.
Private notes are available after approval.