[23] “The Hughes Investigation,” by Horace White, _Journal of Political Economy_, October, 1909, p. 537.
[24] The governors of the Stock Exchange, when asked by the Hughes Commission, “Would a change in the practice of dealing on margins be desirable?” replied as follows:
“The practice of dealing on margins is absolutely essential to the conduct of many transactions, whether in stocks or bonds. To prohibit it would be to deny to a man the right to invest his funds and to purchase property upon such terms as he pleases. As well might the purchase of real estate, where a portion of the consideration is left on mortgage, be prohibited. The responsibility of the individual enters so largely into these transactions that it will be impossible to define specific instances where the margin would be too small or unnecessarily great. It is to be left to the discretion of the bankers, as well as to the judgment of those who furnish the money upon which these transactions are based. There may be certain classes of securities, like city bonds or government bonds, where a very small margin is ample. There may be other transactions in stocks selling at very high prices where a very strong margin should be required. Like many other details of a banking and brokerage business, these matters are frequently subjects of arrangement, whereby the broker protects himself and a satisfactory protection is given to him by his client. It would be manifestly impossible for the enactment of rules or regulations suitable to every case, and, in conclusion, we would say that it is almost unknown for an institution, bank, or trust company, to lose money upon any loans made on margins to members of the Stock Exchange in good standing.”
[25] “Ten Years’ Regulation of the Stock Exchange in Germany.” _Yale Review_, May 1908, _q. v._, _post_.
[26] “The Stock Exchange,” by Francis W. Hirst, London, 1911, p. 101.
[27] “The Hughes Investigation,” by Horace White, _Journal of Political Economy_, October, 1909, pp. 532–3.
[29] “Chicago Board of Trade Case,” May 8, 1905.
[30] Several authorities among those quoted in this chapter have been taken from Mr. Frank Fayant’s pamphlet, “Some Thoughts on Speculation,” N. Y.., 1909. It would be difficult to compress in small space a more instructive array of data than that presented in Mr. Fayant’s work.