By JONATHAN.

As a commercial term the word which heads this article stands for one of the marked tendencies of the times. Speculation is not a new thing. Words in the book of Proverbs suggest that the practice may have been rife twenty-five hundred years ago. “He that maketh haste to be rich shall not be innocent,” said the wise king; and it was his testimony that, even then, there was “nothing new under the sun.” But it is safe to say that seldom in history has a spirit of speculation so potent and wide-spread appeared among a people as in our own land in recent years. We often advert to a period in France. It was when John Law deluded himself, was deluding the people with his gigantic financial schemes. The “Mississippi Bubble” arose before the eyes of men, a fascinating thing, and grew larger and larger. Then everybody seemed seized with the fever of speculation. In 1719 it reached its height. All France was in a ferment, and every one bent on getting speedily rich. From all parts of the kingdom, and from other countries, people crowded into Paris to speculate in the enterprises of Law, who was the idol of the populace, with more than regal power. The disastrous results to the French nation flowing from the popular mania of that day are a matter of history, whose lessons may be pondered. Our country has seen no epoch which could match that in France of over a century and a half ago. There has been here no equal national convulsion resulting from the same cause. But the spirit of speculation to-day is in the air all over the land. We have seen it grow and widen; we have seen communities agitated by it, and suffering from its work; we have seen operations of a speculative nature carried on by our bold and skillful men of affairs, whose magnitude would have astounded the fathers; and mischievous consequences of speculation we have seen which were felt in every part of our country. Bishop Butler’s idea that insanity is not only an affliction of individuals, but likewise at times of communities, has abundance of historical facts to stand upon. It is hardly exaggeration to say there have been times when certain of our communities were beside themselves with the mania of speculation. The time was, and not very long ago, when a millionaire in America was almost unknown; now men with a million of money are common enough, and those with their hundred millions are likely soon to be so. These great fortunes, we understand, were acquired for the most part by fortunate speculation. This new western world has presented such a field for speculation as was never known elsewhere, and of the multitudes who have entered it, some have had success.

The word speculation is a broad one, and covers an immense class of transactions. It may do, for a general definition, to say that it means the risking of money with the hope of gain. The element of contingency enters into all veritable speculation. The speculator assumes a risk; he makes a venture; he takes a chance. He may be entirely confident of gaining, but there is a possibility of his losing. The man who buys a piece of real estate, or any commodity, expecting that it will rise in value and he will make money by selling at a higher figure, speculates. The man who invests money in some undeveloped enterprise, believing it will prove a “bonanza,” speculates. The man who, in our stock and produce exchanges, deals in “futures,” and “options,” and “margins,” calculating upon a contingent rise or fall in the market to return him the amount of his venture increased, speculates. The man who risks his money in “pools” at the horse race or rowing match, hoping to double it, the man who tries his luck on the gaming table, hoping to win, speculates. In making this classification, however, the writer would not, of course, be understood as making these different transactions named in a moral point of view the same. Distinctions will presently be made which it is hoped to the reader’s mind will be clear.

The great arena of operations in the line of speculation in our land is found in the Exchanges and Boards of Trade of the cities. These have become numerous, and of various kinds, and the growth of some of them has been prodigious. We now have stock exchanges and produce exchanges, cotton exchanges and oil exchanges and coffee exchanges. Thirty years ago the Chicago Board of Trade was just making a beginning, and feeble enough it was at the start. It is now by far the greatest exchange for produce in the world, and in the year 1882 not less than three billion dollars’ worth of business was here transacted. A seat in the New York Stock Exchange costs thirty thousand dollars; and it has been shown that the yearly transactions of this wonderful mart, represented in dollars and cents, are but little less than three times “the taxable valuation of all the personal property in the United States.” Our exchanges have become marts of speculation. The business now done in them, aside from that which falls properly into the speculative class, is inconsiderable. They are not, simply or chiefly, places to which producers bring their products for sale, and where men buy commodities, and sell at a fixed advance, which pays for the trouble of handling them. For the most part, those who trade here buy and sell calculating upon a rise or fall in the market which shall yield them a gain. Their gain is a contingent matter; they run the risk of a loss. This is speculation. It is a fact well understood that, in by far the greater part of the transactions in our exchanges, there is no veritable buying and selling of merchandise, the buyer paying the price demanded and receiving his purchase. The buyer neither pays for nor receives his purchase. His purchase is not a purchase. With a hundred or two dollars he buys merchandise to the value of thousands. The fact is, he pays, not for the commodity, but for a chance to make money from a rise in the price of the same; and his money goes to insure the one through whom he operates against loss from fluctuations in the market. On the other hand, the sale of the seller is not a sale. He sells what he has never seen and never bought. It is a chance he sells; and if fortune has favored him, he receives the difference between the price of the commodity at the time of buying and the time of selling. This is speculation, and something more. To one who had just come out of a Rip Van Winkle sleep and knew nothing of customs which in recent years have come into being in our land, there are things which would be decidedly puzzling. The present production of petroleum is estimated at about sixty thousand barrels a day; but in the different oil exchanges of the country nearly one hundred times this amount is daily bought and sold. Our farmers all together produce only one-fifth the number of bushels of grain per year as reported as changing hands in the Chicago Board of Trade; and the hogs of trade here are easily twice as many as the whole land affords. In the New York Stock Exchange stocks and bonds are daily bought and sold more by a million dollars’ worth than exist; and the statement has been made that “when the cotton plantations of the South yielded less than six million bales, the crop on the New York Cotton Exchange was more than thirty-two millions.” It was from expressions in the speeches of General Butler upon finance that we formed the phrase “fiat money;” and it would seem that fiat wheat, and fiat pork, and fiat cotton, and fiat stocks, and fiat oil abound in the exchanges of our cities.

It may be well, for the sake of the uninitiated, to attempt an explanation of certain terms in common use in connection with modern speculation. A man is “long on the market”—signifies that his buying has been in excess of his selling. He has oil, or grain, or whatever the article of merchandise may be, on hand—though perhaps not in fact; he has bought more than he has sold. A man “sells short”—means that he sells more than he has bought; he has an amount of merchandise to deliver in excess of what he has purchased. The trading in “options” has played an important part in the transactions of our exchanges. “Options” are of two kinds; buyers’ options and sellers’ options. In the case of the former, a man engages to take at a stipulated price merchandise to a certain amount, within a specified time; while the seller’s option binds one to deliver merchandise as aforesaid. The term “futures” in significance is not essentially different from “options.” “Puts” and “calls” are speculative terms which have become very familiar. A person thinks there is to be a decline in the market. He pays to another a sum agreed upon for the privilege of “putting” so much of an article in trade, or disposing of it to him at a price named, within a certain time—a privilege he may, or may not use, as he sees fit. Or, he believes the market will advance; and he pays for the privilege of “calling” or taking so much merchandise, as aforesaid. Buying and selling “on margins” is very common. In some exchanges the most of the business done is of this class. The method is easily understood. A man wishes to buy for speculation, a thousand barrels of oil. He pays into his broker’s hands a hundred dollars, more or less, and the broker buys the oil. The hundred dollars is a “margin.” The phrase of trade is “putting up margins.” The margin is the broker’s security. In case the market falls, and the oil remains on his hands, it secures him from loss. So much for the vocabulary and methods of speculation.

But there is an aspect of this large question which must not be passed by. What is to be said of speculation regarded from a moral point of view? Unquestionably there is such a thing as legitimate speculation—speculation which is not to be condemned as morally wrong. The man who invests money in some commodity, paying for and receiving it, with the hope that he will be the gainer from its rise in value, it is right to call a speculator, but not right to call an immoral one. But there is another kind of speculation. A careful consideration of some of the practices set forth in this article should convince the candid that, though there are many good men engaged in them, they can hardly be justified in the light of the moral law. With regard to the character of gambling there is no controversy. Every one admits its immorality. And gambling is a broad genus; its species are many. This excellent definition has been given of it: “The art or practice of playing a game of hazard, or one depending partly on skill and partly on hazard, with a view, more or less exclusive, to a pecuniary gain.” The old Romans prohibited gambling, not on account of its immoral character and influence, but because its tendency was to render the people too effeminate; and for the same cause at first, laws against gambling were enacted in Great Britain. But in our own land the law forbids gambling of various forms because it is felt to be a vice, wrong and demoralizing. We have laws against lotteries and against betting. These, and other practices, are generally recognized as species of this vice. But our courts have decided that other things come under the same head, as to whose character there is not the same general consent. By judicial decision the person who takes a chance in a “grab-bag” at a church fair gambles; and in a most unequivocal manner, in the courts of different states, the opinion has been given that certain popular forms of speculation are gambling. Our judges have repeatedly said that those who speculate on “margins,” or trade in “options,” and have to do with “puts” and “calls,” gamble; and it is difficult to see how the decision can be gainsaid. Some people may be able easily to see that buying and selling “on margins” is not playing a game of chance for money; that taking an “option” is not like buying a ticket in a lottery; and that the method known as “puts and calls” is not very much the same as betting; but there are many thinking people who have not the ability.

Just an allusion may be made to a practice of modern speculation, of which some one has forcibly and truthfully spoken as “exaggerated gambling.” It is what is known as “cornering the market.” Speculators by forming a combination gain a control of the market, and force it up and down to serve their own interests. In this way immense fortunes have been made. The writer’s limits do not allow of his entering into a discussion of the methods employed. Heartless, cruel, wicked, are mild terms to apply to this “exaggerated gambling.” It is true that, by this cornering of the market, men are “squeezed” and fleeced and ruined who are not themselves scrupulous as to their methods; but the effects of the pernicious practice often do not stop with these men. Great corners in grain markets, by raising the price of bread-stuffs, have resulted in untold suffering among the poor, and affected in a most unhappy way the whole country. In 1879 there were two famous corners which will not soon be forgotten, a corner in wheat, and the “Armour pork corner.” As a result of these, the price of pork was more than doubled, flour advanced two dollars a barrel, and there was a general decided rise in value of the necessaries of life. Millions of money were made, but the loss to the country was immense, and the suffering occasioned incalculable. It was estimated, in a report made to a state legislature, that the syndicate which manipulated the wheat corner was the occasion of a loss to the public in different ways of not less than three hundred millions. As yet there is no punishment by the law of the enormity of which these cases are illustrations.

A final word can hardly be omitted with regard to the effects of speculation in general upon those engaged in it, and upon communities where the spirit is rife. Even those who are so hardened that they are unable to see that certain peculiar forms of it are immoral and wrong, as is claimed, will hardly deny that speculation is a pursuit which is to be censured on other grounds. The excitement of it is neither physically, mentally, nor morally healthful. It has a fascination which is dangerous; to break away from it comes to be like the Ethiopian’s changing his skin, or the leopard’s his spots. The cases are sadly frequent where it unfits one for the enjoyment of home, the pleasures of society, the duties of the citizen and the Christian. And in a multitude of cases it has brought those absorbed in it to the mad-house and to an untimely grave. The judgment of the candid and reflective must be that “making haste to be rich,” even by ways confessedly proper, is not best. Moreover, terms too strong can hardly be used in speaking of the harmful effects upon a community of a spirit of speculation filling the air. There is seen a feverish condition of things which is not well. Regular business is neglected; duties are passed by; the action of others is blindly and rashly followed. And it is always the case that, sooner or later, to by far the greater number who give way to the spirit and embark in the glittering speculative schemes, there comes disaster. Communities could easily be pointed out in whose condition of prosperity strikingly reversed one might read: “The demon of speculation hath done this.”