The bucketshop-keeper takes the other end of the play, pays you out of his pocket when the market goes your way and keeps your money when it goes against you. He never delivers any stocks.
The New York Stock Exchange member is expected to buy your stocks for you and _carry_ them--some of them do and most of them don't, as is shown farther on--but in this case also no stocks are delivered to you.
The transaction is the same in principle as the one in the bucketshop, so far as the gambling feature is concerned. The only real difference is that when you gamble on market fluctuations through the bucketshops no contribution is made to the New York Stock Exchange "kitty."
RIGHTEOUS WALL STREET AND THE "SUCKER" PUBLIC
The New York Stock Exchange member will tell you that the evil of bucketshopping is that the bucketshopper is tempted when the public is long on stocks to depress the market by heavy short sales. On the other hand, the bucketshopper urges upon you that his business is gambling against fluctuations which he has no hand in making and that the financial powers of Wall Street resort to the same trick that he is occasionally accused of. The "interests" know at every hour in the day approximately how many shares of stocks have been borrowed for delivery against "short" sales or are being carried on margin for the long account. They know what the public's short interest or long interest is, and they, too, have it in their power to shake out the public at any moment they choose. Worse, it is common knowledge that this practice is continually resorted to. Stocks are put up and held up on bad news and marked down and held down on good news or no news at all. News is withheld and is manufactured to suit occasions. For years the market has been thimble-rigged to a frazzle. Margin-trading "suckers" have been milked to a finish. George E. Crater, Jr., writes:
Margin trading on the New York Stock Exchange is the most dangerous and destructive form of gambling known, because, being "legal" and therefore "respectable," it allures hundreds of thousands of people who would never think of risking their money at "faro," "rouge-et-noir," "roulette," or any of the other games of chance. Statistics show that more people are ruined physically, morally and financially by stock gambling than by all the other forms of ordinary gambling combined. Monte Carlo is a Christian philanthropy compared with "Wall Street." You have quite as good, if not a better chance to win a fortune at Monte Carlo than you have by putting up "margins" against Stock Exchange bulling and bearing, and if you ruin yourself at Monte Carlo the proprietor will at least refund enough of your money to pay your way home. The man who "goes broke" on "margins" finds no relief at his service on the Stock Exchange or among the brokers. There would not be so many millionaires in this country if there were not so many fools ready to throw their money away on margins.