I. THE TURF
Of all the evils connected or associated with games of chance in this country, perhaps the most vicious are those which surround the race- courses of the land—not only those extensive parks which are recognized as having a legitimate existence, but as well the country tracks where racing events are casual and sporadic. The “turf,” as we are popularly accustomed to term the race course with reference to its gambling features, implies not only the element of chance as manipulated by systematic knavery, and which will be found elsewhere fully explained, but also what is termed the legitimate sport of gentlemen, conducted as honestly as it may be and with every disposition on the part of managers and judges to give a fair test of the speed and endurance of the competing horses. Even in the latter case, it is a notorious fact that race tracks that are conducted in their official management under the highest auspices and by the most responsible individuals, are not in their actual surroundings, influences and results, less pernicious nor injurious than those which are openly in the charge of recognized swindlers and scoundrels. Even as to the great “events” which in this country are recognized and patronized, to the great misfortune of public morals, by the press and by society, governed though they may be by honorable men, and with every concerted determination for a fair and proper exhibition of honest results, it is notorious and undisputed, that these exhibitions are the harvest fields of systematized vice, and that while the judge in the stand may be immaculate, the seller of pools, the bookmaker, the touter, the tip-givers, the turf prophets and all the others who camp upon the trail of the credulous and unwary with schemes that, by methods of certainty, enrich the gambler without risk on his part, are one and all dishonest and designing scoundrels to whom the sense of honor is unknown, and whose infamous and insidious influence is one of the gravest dangers to which the morality and uprightness of the youth of our country are exposed.
The origin of horse-racing, as with that of our modern athletic sports, comes from the classic ages; but in the contests of equine speed and in the competition of personal skill or valor in the “brave days of old” there is no record of the thimble-rigging propensities which these latter days have developed. The competitions of those times were for public honor and prizes, for the encouragement of features which were essential to the public welfare and safety. In that period all free men were warriors, upon whom depended the security of life, property and national existence. The cultivation of ambition to excel in personal strength and swiftness had, therefore, a patriotic and commendable foundation; and the same as regarded the trials of speed by horses, which were for the improvement of the qualities upon which the warriors had to rely in these their main coadjutors upon the field of battle. All this had nothing in common with the turf as we recognize and realize it to-day. For this we have to look back to our mother, England, from whom it was an inheritance of shame whose evil influence has expanded like the upas tree ever since it first took a root in our land. In England, while it has been customary for turf enthusiasts to trace the history of their trade from about the reign of Charles I., the fact is that it was not really till the reign of George II. that the “turf,” as property understood, became a recognized entity. Prior to that time there had been plenty of horse-racing, in which gentlemen rode their own horses, and which was almost entirely free from the vicious concomitants which have later surrounded, characterized and dominated the race track. The leading meetings in England are the Newmarket, Epsom, Ascot, York, Doncaster and Goodwood. It is at Epsom that “the Derby,” an event of interest to the whole sporting world, is run. This is known as the Cockneys’ Holiday, and has been the subject of many an exemplification of the highest attainments of the art of word painting. Indeed the interest attaching to the vast and heterogeneous throng is to many greater than that which belongs to the race itself, every element between the palace and the poor-house being there represented. Ascot is favored frequently by the presence of royalty, and is on this account always the scene of a brilliant display by the aristocracy. Goodwood is also an aristocratic meeting, representative of the south of England and distinguished by the great value of the prizes offered for competition. The distinguishing feature at Doncaster is the race for the St. Leger stakes, which rivals the Derby in sporting importance; and it has been claimed that upon these two events not less than twenty-five per cent. of the whole English population are bettors, either risking their money on the tracks or at the pool rooms, which in every town throughout the country sell chances upon the results.
It is a somewhat remarkable fact that of late years while, in England, the most energetic efforts have been made, and with good success, to keep the thimble-riggers and blacklegs off the track, this fraternity, outside the track, in the adjacent hotels, and in other outside towns where interest in the result centers, carries on its audacious trade with increasing extent and profit, while to-day, throughout Great Britain, the mania for gambling upon the results of contests upon the turf is more wide-spread and deep-rooted than ever before. The harm resulting to public morals is incalculable, and will possibly more than offset the efforts for good of the ministers of religion. There is not a race meeting after which we do not hear of the downfall of some “plunger,” who in “legitimate” betting has risked his all upon the “wrong horse,” bringing ruin and disgrace too often upon the innocent wife and family, and opening up the alternative of crime, dishonor or suicide. Yet these are but the least of the injurious influences of gambling upon these race meetings. They are only heard of by reason of the conspicuous extent of the individual losses, or the prominence of the persons thus involved in the ruinous consequences of the national vice. Far more serious, more deplorable and more demoralizing are the results upon the infinite number of the “smaller fry,” who submit themselves as easy victims to the skillful swindler who runs the “speculation list” or the pool-room, whose specious but delusive allurements send the honest hand of many a youth surreptitiously into his employer’s cash-drawer, to be drawn forth forever tainted with dishonor; and merely in order that the ill-gotten gains of the experienced swindler may be enlarged. Round about all such tracks, too, may be seen the gaming devices of every description, and all the nefarious instrumentalities by means of which the honest man is deluded of his earnings for the benefit of systematic knavery. And yet the race- track is the “national sport” of England; to it, and all its contaminating, crime-producing, society-wrecking and soul-destroying influence, royalty lends its condescension, and princes and peers their active countenance and aid; bishops and churchmen, members of Parliament and professional men, participate and applaud; while even those in charge of the little children afford them special holidays in order that their young minds may be subjected to impressions which, in the years of their older youth will make them the easy prey of the agents of this monster vice. It is in the glitter and glamour of all its brilliant external attributes that England finds the pride with which she claims the turf as her peculiar national institution; it is in the ruined reputation, the blasted life, the broken heart, the wreck of happiness, the loss of honor and the headlong course to crime, which are to be traced by the tears of women and the wails of children, in the blighted homes throughout the land, that we recognize in the turf and all that pertains to it, England’s national curse, that must surely sooner or later invite and evoke a national retribution.
The details of the various rascalities practiced in connection with the “turf” being common to all countries, we shall deal with these features of the English national sport, at the close of this chapter, in a general explanation of the methods which affect the results of all race meetings, and which add strength to the steel meshes of the net in which the innocent and confiding bettor is certain to become involved.
THE AMERICAN TURF.
It is to be said to the honor and credit of the Puritan and Pilgrim settlers of New England, that they had a strong antipathy to every form of vice, and in their interdict against the evils which they had left England to escape, horse-racing was especially included. On the other hand the early settlements of the Old Dominion, (which originally included Kentucky), and of Carolina, were of aristocratic stock, retired army officers, the younger sons of gentlemen, etc., and as the early conditions that prevailed precluded many of the ordinary sports, horse- racing, generally in the form of the steeple-chase, was encouraged. This was not, however, the “turf,” in America, but it was the means of affording a nursery for the splendid animals which have made the American turf famous for the wonderful achievements in time and speed of its horses. In those early days travel in the South was almost altogether by saddle horses, and hence the necessity for developing those peculiar qualities in the horses used, as made them valuable for racing purposes. The stock was recruited from the best blood, imported from England, and as it was a peculiar mark of social distinction, where all men ride, to be well mounted, great care was taken in cultivating and improving the breeding of horses. Yearly meetings for running races became the custom; but at these affairs there were no bookmakers nor blacklegs, and the betting was generally of that perfunctory character which usually exists where the competing parties are interested rather in the results than in the stakes. As the country developed, the new state of Kentucky, with its splendid climate, its crystal streams and its unequalled grasses, became distinctively the home of fine horses, which up to the present day even, she has continued to supply to the racing world.
The trotting race had its origin in New York and took its peculiarity from the general use of the light wagon for road traveling. In this way the only possible method of testing speed was the “pace” or “trot,” and for many years in the Northeastern States the trotting meeting was the recognized form of sport, the practice becoming general and being the invariable accompaniment of every county fair. The earliest recorded organized trotting meeting of which there is any specific record is of date of 1818. The fastest time for fifty miles was recorded in favor of Spangle at Union Course, Long Island, Oct. 15, 1855. The best time for two miles under saddle was at Fashion Course, Long Island, July 1, 1863, by George M. Patchen. We mention these dates to show that as long as thirty-five years ago there were important meetings of the turf, and also to point out the fact that the public sense of humanity, growing with the increasing refinement of the country, has reduced these trials of speed generally to one-mile contests, and frequently to the half- mile.
Trotting races began to assume an aspect of national importance shortly after the war, and the first National Trotting Association was organized in February, 1870, under the name of the “National Association for the Promotion of the Interests of the Trotting Turf,” which in 1878, at a congress of members, was changed to that of “National Trotting Association.” It is a curious fact that the origin of the National Association arose in the abuses which invariably follow the practice of racing for money or of betting on unknown results. There had been complaints all over the country of crooked work on the race tracks—of “blind” horses being entered under assumed names to gull unsuspicious victims; of jockeys who “pulled” the winner so as to make him the loser; of improper decisions by judges, and of a thousand and one things in the way of serious and petty crookedness on the leading race tracks. It became generally recognized that the confidence of the public in the integrity of racing contests in America was becoming exhausted and that racing was falling into contempt as well as falling off in its profits. Organization was originally effected in response to a circular sent out by the Narragansett Park Association, of Providence, R. I., in 1869. It proposed the formation of a central body for general control, and the establishment of a code of rules and penalties for the government of all tracks as the most effective means of correcting existing abuses and elevating the standard of honor and fair play, and the character of the American Trotting Turf. The results were gratifying so far as those objects were concerned, though it is a serious question whether the country would not have been greatly the gainer had the race-courses and their attending evils been allowed to extinguish themselves by the very excesses which were at that time making them offensive and contemptible. However, the organization was effected as stated, officers elected and, a code of laws adopted, under which the chief of the evils complained of disappeared from the official protection of the tracks, though they still continue under more insidious and less offensively unscrupulous methods. The membership of this association consists of the representative of a trotting course. In order to show the extraordinary growth of this mania for speculating upon the chances of the horse-race we may state that, commencing with 51 in 1870, in 1886 there were 273 courses represented in the National Association, while now there are 317, and in the American Association 419—in all 736. The government of the National Association is effected through the medium of a Board of Appeals consisting of five District Boards and a Board of Review, each of the former being entitled to three members of the general board, giving it thus fifteen members in addition to the President and Vice- presidents who are ex-officio members. The Board of Review is composed of a chairman appointed by the President from each of the five districts, and this Board has and exercises supreme authority and jurisdiction, being a final court of resort which decides all appeals from the decisions of the District Boards. The objects set forth on behalf of the association are the improvement of the breed and the development of horses by promotion of the interests of the American Trotting Turf; the prevention, detection and punishment of frauds thereon, and uniformity in the government and rules of trotting and pacing.
In 1887, a number of Western tracks separated from the original body and formed the “American Trotting Association,” with objects precisely similar, and methods not materially differing. In fact, many parties are represented in both Associations, as a matter of policy, and to ensure the enforcement of rules and penalties upon all courses.
Running races have of late very largely supplanted trotting races in public favor, for the reason that they offer to the public a more vivid and intense excitement, and to bettors a speedier settlement of their concern about the result. Five persons will attend, it is said, a running race, where one will attend a trotting race.
To enumerate the “principal courses” would be a task that would take space with little profit, but we can gather some idea of the extent of opportunities that are open to the sharks that swim the sea of speculation in races throughout the Union, when we say that at the great Suburban race, Sheepshead Bay, N. Y., in 1890, there were present not less than twenty thousand persons according to gate receipts; while at Washington Park, Chicago, thirty-four thousand people have been counted on important occasions. And these, let it be remembered, do not constitute a tithe of the actual number of the eager victims of the gamblers of the turf. In all our leading cities to-day are pool-rooms, where may be seen excited crowds who by the use of the telegraph wire, on the same principle as quotations are announced on the board of trade, follow the races from start to finish with as much accuracy as if they were at the tracks, and in this way the prey of the gambler is increased without limit, and his operations made to permeate near and remotely into society that otherwise would never have sought nor had the opportunity of seeking the contact.
A NATIONAL VICE.
If reckless indulgence in games of chance of every description, in lottery enterprises, in the board of trade, and in the pool-room, can be, as it is, appropriately denominated a “national vice,” that appellation belongs with especial emphasis to the gambling of the race- track. This is true, probably, mainly because of the fatal facility with which contact is there had with the evil influence that draws men and boys, aye, even women and girls, into its deadly toils. The race-track is governed by presumably respectable persons. It has the convincing support of the press, universally, to sustain its claims to harmlessness. Church members and people of recognized reputable position, bankers, merchants and professional men, are openly seen “making their bets,” in the face of thousands of their fellow citizens. Women surrender to the glamour of its fascinations, and may be seen in numbers, any day on any grand stand, “backing” their favorite in the race. In the face of such example as this, then, how can we expect that the youth of the land shall escape? Already they are sufficiently imbued in their personal and business ambition with the spirit of speculation that pervades the nation, and in the feverish haste to get rich suddenly are ready to turn to any resort that may seem to offer them the opportunity of making large winnings for a small investment. True, the youth may have been warned by a pious mother or a prudent father that gambling is a vice, and one of the most dangerous and pernicious of all that threaten the interests, the welfare and even the safety of society. But when the young man sees the pillar of the church, or the refined lady leader of polite society, who mayhap occupies the front pew in the church which he attends, openly patronizing gambling, is it any cause for wonder that he concludes the good counsel which he brought from home was merely a mistake, and that there’s “no harm in it” after all? And once in the circle of that treacherous maelstrom of vice, at first imperceptibly to himself and in slow and apparently safe revolutions, he is gradually but irresistibly drawn to the fatal gulf, in which character, integrity, hope, and the best opportunities of life are remorselessly swallowed up.
Every bet that is made upon a race-course is emphatically and indisputably participation in the commonest kind of a lottery—is gambling pure and simple; and if it has been found necessary by Congress, acting upon the advice of the National Executive, to legislate against the existence of the incorporated lotteries that exist by State authority, why is it not equally the duty of Congress to declare all betting unlawful? This is not a new proposition. Under existing law the illegality of gambling by betting is recognized in the refusal of the courts to enforce debts or contracts incurred under a bet. If the principle were logically carried out, it would afford a safeguard to society which, as yet, moral sentiment appears to have been unable to extend. But what moral restraints, the teaching of parents and the exhortations of the clergy, have failed to achieve, may be accomplished by what this book contains: by tearing away the mask of harmless sport from the death’s-head that grins behind it, and exposing, in all its hideous nakedness, not the moral wrong that there is in the vice of gambling by betting, but the personal rascality toward the individual, the plain and evident object of robbery that is involved in all the schemes of the book-maker, the pool-seller, and every other person who makes either a profession or a systematic practice of offering bets upon the results of the race-track. While our young men may be eager to get rich by the easiest means, we have much confidence in the hard common sense that is characteristic of every American youth, before the natural acuteness of his intellect and spirit of self-preservation have been insensibly dulled by the insidious and subtle approaches of a danger that draws near him with a smiling countenance. With, however, an ample fore-knowledge of what those advances mean in reality, with pride and apprehension both on the alert, every young man will firmly refuse to allow himself to be deliberately gulled, and will turn his back in contempt upon the pickpockets of the pool-room and the race-track.
THE POOL ROOM.
We have already alluded to the pool room as an accessory to gambling at the track. This is one of the most nefarious of all the modern instruments of evil, and ought to be summarily abolished by specific law in every State in the Union. Its worst feature, perhaps—in addition to the fact that it is a skin game played to catch “suckers,” as the gamblers term their latest dupes—is that it seeks out and offers opportunity to a class of citizens who could never be reached by these machinations in any other way. Clerks, students, apprentices, and such, would in all probability never have the time nor the means to squander in a trip from New York to Sheepshead Bay, to witness a horse race. The pool-room brings the race to him. He can visit them at his noon hour or in the idle hours of his evening rest. Here he is deluded into the belief that a small investment will bring a rich return, and is easily wheedled by a “capper” into investing his small hoard on “tips” that he is assured are certain to win. Of course he loses, and to retrieve his loss will probably go to his employers’ funds to get the means to continue his play. And so from bad to worse till exposure and ruin overtake him.
Pool rooms are conducted upon the science of exactness, not only as to the promptness and accuracy of the reports upon the blackboard, but also with regard to the certainty that the pool seller will be the only one in the room who will be a sure and solid winner each time. The pool board displays the whole course of the race, in its smallest details. It shows when the horses are “off,” which one is “in the lead;” which “second” and which “third;” how they stand at the “quarter,” the “half,” the “three quarter,” and their positions down the “stretch,” and within ten seconds after the “finish,” will display which horse was winner, and which took second and which third place. Previous to the race the board has reliable and definite information of the state of the track, whether “fast” or muddy; gives the name of the jockey who is to mount each horse, the weights and all information necessary to the man who governs his bets by what he considers the most reasonable chance to win.
The pool-seller works his gambling racket on what he calls the percentage principle. In all pools sold by auction, he deducts a certain sum, generally 5 to 15 per cent., from the amount in the pool, and pays the balance to the winner. The book maker arranges his book with reference to the “odds” for or against; that is, the individual chances of each horse upon the information which he has available, and which if he be at all expert in the business will enable him to insure his personal success every time, except only in the case where all the patrons buy the same horse and that horse should be the winner a—contingency that is, however, not as one to one hundred, and about as liable to happen as that the sucker who has bought on a “cinch tip” will win the pot.
It may be interesting for many who have no knowledge of pool room practices, and will better illustrate the devices by which the “sucker” is snared, to have a few illustrations of actual proceedings that have transpired. Here, for instance, is what is called a “book” taken from the blackboard at the Imperial pool rooms, Chicago, June 12, 1890:
THE MUTUAL POOL.
PURSE $400—WEST SIDE TRACK, CHICAGO. First Race, Maidens, Seven Furlongs. ────┬─────────────────────────┬────┬── 20│Emma McDowell │ 105│ 1 10│Dora Morne │ 105│ 1 10│Jack Staff │ 106│ 1 50│Norwood │ 107│ 1 40│Flora McDonald │ 98│ 1 10│Jennie Gronnod │ 105│ 1 10│John Clarkson │ 103│ 1 3│Corticelli │ 110│ 1 20│Imogene │ 105│ 2 30│Council Platt │ 100│ 5 2│Later On │ 106│ 1 5│Jack Batcheler │ 107│ 1 10│Tall Bull │ 110│ 1 20│Arizone │ 105│ 5 50│Miss Longford │ 105│ 1 10│Jasper │ 107│ 1 15│Rock │ 111│ 2 ────┼─────────────────────────┼────┼── 315│ │ │27
In explanation it is to be observed that the bookmaker never bets in favor of any horse. He invariably offers odds against every flyer on the programme. The first column of figures gives the odds offered; the second the weight carried by each horse, and the last the figure against which odds are offered. For instance, the first line means that the bookmaker offers twenty to one against Emma McDowell. Now, if this horse should win, the bookmaker would pay out $20, and having won all the other bets he would still be the winner, because he would receive $26 against the loss of $20. It will be observed that on Later On he only lays odds of two to one, and on Corticelli three to one. These are the favorites—horses which offer tolerably certain chances of being winner, and on which the book maker will take the smallest possible limit of chance. The favorite won the race and the book maker has to pay the winner $2, so that he is the winner by $25, counting out of the pool of $27, $2—$1 of which was his stake and the other that which had to be returned to the winner. If the horse Norwood had won the book maker would have been out $25. But no such contingencies are to be dreaded by the gentleman who presides over the pools. He is kept posted from sources that are always inside and unquestionable, and in offering the heavy odds knows that he runs no risk. This computation of winnings is based on the supposition that only one bet at the figure of $1 named was made, but the probability is that instead of this being the case the actual winnings may be safely estimated at $2,500 instead of $25. In this business an important figure is the “tout,” who, while actually the bookmaker’s agent, assumes the role of a gentleman who, by some means or other, has procured a “cinch tip” (meaning a sure thing), but is unfortunately short of money. “Now,” he will confidentially inform the sucker, “give me $10 to bet on Norwood, and we’ll divide the pot.” The money is produced, and, of course, goes to swell the book maker’s wad. These touts always induce their victim to bet on the “short horses”—that is, the horses against which the heaviest odds are laid, for two reasons. First, because the money more certainly goes where he is employed to steer it, and second, because in the rare and unprecedented event of the tail-ender on the blackboard becoming the winner on the track, the tout’s share of the winning will be so much larger. The tout will ply his vocation so industriously that on a board like the above he will have given a “tip” and got a bet laid on nearly every horse on the board. In this way he is almost certain to have one winner out of the lot and when the latter receives his stake the tout says, “There, didn’t I give you a straight tip!” He gets a liberal share, and his reputation for inside information is spread among the crowd, and his chances of increasing his victims in succeeding races are immensely increased. As for the losers, no one pays any attention to them. Even the tout won’t take the trouble to condole with them, and realizing that the mob of a gambling room do most heartily despise a “kicker,” they will probably sneak away to kick themselves in private. To illustrate the wisdom of the tout in always deluding his dupes to bet on the “short horse,” it may be mentioned that once in a great while, through some influence not comprehended by the book maker and his crowd of sharpers, the “short horse” will be a winner. This generally happens when the horse has been managed by some professional who, having discovered his qualities, has played a game on his brother gamblers, kept his pacer’s capacity a careful secret, probably has had him “pulled” by the jockey to make a bad record in a preceding race, so that he can gather in heavy odds in the event in which he intends to show his hand; and so the book maker becomes a victim in the game of “diamond cut diamond,” and the tout is made happy by a liberal share in the chance hit. We say “chance” hit because the tout never gives an honest tip, and if he really had the knowledge of the “short horse’s” prowess he would have informed his patron, the book maker, and the long odds would never have been given. As an instance of this kind of luck it may be stated that recently during a St. Louis meeting, at Roche’s pool-room in that city, a book was made in which the odds against a certain horse were laid at 100 to 1. A tout persuaded a man from North Missouri to let him have $50 to bet on the race. The tout bet 100 to 1 on the horse, and to his own astonishment, the amazement of the book maker, and of everyone else, his horse won the race, the result being that the book maker lost $5,000, while the tout received a bonus of $2,000 of the money.
THE COMBINATION BOARD.
This board enables you to have an opportunity to select a winner in three different races. The board is arranged as by this diagram:
LATONIA—TRACK MUDDY. ───────────────────────┬─────────────────────────┬────────────────────────── Third Race—6 Furlongs.│ Fourth Race—5 Furlongs.│Fifth Race.—Steeplechase. Handicap. Purse $500. │ Purse $400. Selling. │Purse $400. Full Course. ───────────────────────┼─────────────────────────┼────────────────────────── 1. ┌Wrestler, 108│ 1. Laura Doxey, 110│ 1. Irish Pat, 138 └Prophecy, 114│ 2. ┌Ferryman, 98│ 2. Copperfield, 100│ └Katie J. 105│ 2. Ascoli, 145 3. ┌Bonnie Annie, 90│ 3. Irma B. 97│ └Lady Blackburn, 96│ 4. ┌ Bert Jordan 102│ 3. Elphin, 173 4. ┌Gilford, 106│ └James V. 105│ └Vatel, 106│ │ 4. Gov. Hardin, 120 ──┬──────┬────┰───┬────┴─┬───┰──┬─────┬────┰──┬──┴──┬────┰───┬──────┬──── 1│ 111│ 2┃ 14│ 142│ 3┃27│ 233│ 1┃40│ 324│ 8┃ 53│ 421│ 2 2│ 112│ 1┃ 15│ 143│ 10┃28│ 234│ 1┃41│ 331│ 10┃ 54│ 422│ 3 3│ 113│ 1┃ 16│ 144│ 1┃29│ 241│ 1┃42│ 332│ 1┃ 55│ 423│ 1 4│ 114│ 3┃ 17│ 211│ 1┃30│ 242│ 2┃43│ 333│ 4┃ 56│ 424│ 1 5│ 121│ 4┃ 18│ 212│ 4┃31│ 243│ 3┃44│ 334│ 5┃ 57│ 431│ 2 6│ 122│ 5┃ 19│ 213│ 30┃32│ 244│ 4┃45│ 341│ 6┃ 58│ 432│ 1 7│ 123│ 1┃ 20│ 214│ 1┃33│ 311│ 5┃46│ 342│ 1┃ 59│ 433│ 2 8│ 124│ 1┃ 21│ 221│ 2┃34│ 312│ 11┃47│ 343│ 2┃ 60│ 434│ 3 9│ 131│ 2┃ 22│ 222│ 3┃35│ 313│ 10┃48│ 344│ 1┃ 61│ 441│ 4 10│ 132│ 1┃ 23│ 223│ 1┃36│ 314│ 1┃49│ 411│ 3┃ 62│ 442│ 6 11│ 133│ 1┃ 24│ 224│ 1┃37│ 321│ 1┃50│ 412│ 1┃ 63│ 443│ 1 12│ 134│ 1┃ 25│ 231│ 2┃38│ 322│ 2┃51│ 413│ 1┃ 64│ 444│ 1 13│ 141│ 2┃ 26│ 232│ 1┃39│ 323│ 3┃52│ 414│ 1┃ 65│ │ ──┴──────┴────┸───┴──────┴───┸──┴─────┴────┸──┴─────┴────┸───┴──────┴───── 25 60 45 44 27 Total, 201
We will assume that in placing the bet you put your money on Gilford or Vatel for third race, Irma B. in the fourth, and Ascoli in the fifth. The number of your ticket would be 58, represented by the figures 4, 3, 2, these latter numbers indicating the horses named, as numbered on the score card. If your judgment has been correct, being the only purchaser of ticket number 58, for $1 you would receive the proceeds of the sale of the other tickets, or $201, less the percentage to the bookmaker, who pockets $30.15, or 15 per cent. thereon. But as a matter of fact, Copperfield wins the third, Laura Doxey the fourth, and Elphin the fifth. These horses being “favorites,” thirty tickets were sold on them, and the bookmaker having abstracted his $30.15, each winner receives only $5.69. In this board the bookmaker relies solely upon his percentage, and if the amount set forth be amplified to correspond with the sums usually bet at the race tracks and pool rooms, it will be seen that the profit is not only a handsome one, but it is the only one on the board that has the least “possible, probable shadow” of chance in its favor. The combination on the short horses won’t win once in a thousand times, while the winner on the selling combination gets only a sixth as much as the cosy and certain profits of the book maker.
FRENCH MUTUALS.
In these pools, the board is made up for each race as it transpires, and is set forth in the following manner:
WEST-SIDE TRACK, CHICAGO.
First Race. Purse $400. Six Furlongs. NO. ──────────────┬──────────────┬─────┬──────────── 50 │ Tom Karl │ 109 │ 10 51 │ Prophecy │ 100 │ 12 52 │ Fayette │ 109 │ 3 53 │ Hornpipe │ 100 │ 8 54 │ Susie B. │ 109 │ 20 55 │ Famous │ 112 │ 5 56 │ Catherine B. │ 102 │ 6 57 │ Donovan │ 106 │ 4 58 │ Tall Bull │ 107 │ 10 59 │ Only Dare │ 106 │ 2 ──────────────┴──────────────┴─────┴──────────── 80
PLACE. ──────────────┬────────────────────┬──────────── 60│ Hornpipe │ 11 61│ Susie B. │ 19 62│ Famous │ 8 63│ Tom Karl │ 12 64│ Fayette │ 5 65│ Prophecy │ 10 66│ Tall Bull │ 10 67│ Donovan │ 8 68│ Only Dare │ 2 69│ Catherine B. │ 5 ──────────────┴────────────────────┴──────────── 90
In this case, the player selects his horse for first or second place, tickets for first place being called “straight,” and those for second place, “place.” Generally only favorite horses are bought for straight, but on this board there appears to have been a large field of favorites. The buyer may purchase as many tickets as he pleases for either “straight” or “place” chances. In this event it appears that there were eighty tickets sold as “straights,” and the tickets being sold for $2 each, the amount in the pool book would be $160. The pool-seller deducts 5 per cent. of this amount, or $8, and the balance of $152 is divided between the holders of the ten tickets sold on Tom Karl, the winner. This would give to each ticket $15.20, whether held by one party or in different hands. In awarding the results in the case of the “place” in this event, the pool book exhibited 90 tickets at $2 each, or $180. The seller deducts his 5 per cent., or $9 from this, and after deducting from the remaining $171, the sum of $44, representing the amount paid in by the bettors on the winner of the race, Tom Karl, 12 tickets at $2, and on Prophecy, the winner of “place,” 10 tickets at $2, or $44 in all, he proceeds to divide the balance, $127 equally between these two winners. Thus $63.50 is divided among the ten tickets on Prophecy, giving to each $6.30, and the same amount among the holders of tickets on Tom Karl, or $5.30 to each ticket.
METHODS OF THE “HOUSE.”
Let it not be supposed, however, that the book maker, or his confederates who stand in with him, are to be contented with a fifteen per cent. upon the money that passes through the pool book. On the contrary, he is the most expert and successful of all the gamblers who “play the races.” He is generally the only one of this nefarious outfit who receives a genuine and reliable “tip.” His intimate relations with the jockeys, stablemen and all the habitues of the training stables and racing grounds, are such that he is generally able to pick out a winner, and to discount the results of a race in advance. Thus assured he skillfully sends out his touts to give “tips” that will bring the most grist to his mill, that is to say, to industriously disseminate the belief that that horse will win, which he knows has no chance of success. Under this influence the amateur sport, and the average patron of the racing ground or pool-room, will generally plunge largely on the horse they imagine is to bring them a rich booty, while the pool-seller looks on complacently, knowing that all the money in the strong box belongs to him as surely as if the race had been already run.
The methods employed by these pool-room experts are of the most ingenious and daring order. For instance, at a race in St. Louis recently, the book maker had a secret wire brought into his pool-room, by which he received the actual result several seconds sooner than the news sent by the public wire which supplied the official record. In these few brief seconds of opportunity, and in the intense excitement always prevailing at this point, he was enabled to pocket thousands by “betting on a sure thing.” In short there is no device nor subterfuge, nor daring rascality of any description, to which he will not bend the most astute cunning and the greatest energy in order to extend his thieving operations upon the pockets of those innocent pigeons who lend themselves to be plucked under the miserable and baseless delusion that the pool-room is run “on the square” and that he is getting even a gambler’s chance in the unequal contest with the skillful and audacious knavery with which he is led to contend. Indeed, it is remarkable that men of courage, of resources, of acute perception, of tireless energy, of a self poise that never fails, and an activity of intellect equal to any emergency, as most of these successful sharpers are, should not have preferred to bring their talents to bear upon honorable and lawful occupations in which they could not fail to apply those qualities to the greatest advantage.
THE FRIENDLY “TIP.”
In every pool room, amid the conglomeration of representatives of “queer” industries always there to be found, is invariably a liberal sprinkling of “cappers” or “touts.” These are the lowest and most contemptible of all the instrumentalities employed by the turf sharp, and the most dangerous because they always do their work in the guise of pretended friendship, and under the basest kind of betrayal of confidence. The lowest kind of a bunko steerer is a gentleman by comparison with this most contemptible of all the crawling things that infest this footstool. We have given some insight into the character of his operations. Let it be remembered that every tout is in the employ of the book maker; that every man who offers another a “tip” on a race- course or at a pool room is a “tout,” beyond any peradventure, and be certain that his frank and apparently generous and off-handed advances are but in reality the means by which he intends to aid in the operation of picking your pocket. He is a liar by instinct, by choice and by occupation, and no matter how engaging his manners, or however plausible his representations, you may safely set him down as a thief, and deal with him accordingly. His very approach is an insult to the intelligence of every man whom he seeks to “play for a sucker.”
EXTENT OF THE DEPREDATIONS OF TURF GAMBLERS.
The amount of money abstracted from the business industries, and incomes of the people, mainly of the cities, of the United States, is simply something appalling in its magnitude. In all the great centers of population in the United States: New York, Chicago, Philadelphia, Boston, St. Louis, Cincinnati, Louisville, Kansas City, Denver, New Orleans and San Francisco, the depredations of the gambler will be found to run into the millions in each case. In Chicago and New York it is impossible to make any estimate. The actual truth, if it could be revealed, would no doubt be deemed incredible. One fact, however, that is definitely ascertained, will give some idea of the magnitude of this crime against society, in the western metropolis. At the Fall meeting at Washington Park, in 1889, forty-two gamblers paid to the track authorities, $100 each per day for the term of twenty-four days, the duration of the meeting. That amounted to $100,800. In addition to that they had to pay for the most expensive kind of living at the highest- priced hotels; and had to pay for “police protection,” touters, cappers and hangers-on, salaries that professional men would envy, and had to make high-rollers’ profits. Altogether, there cannot be a question that these sharpers, for the privilege for which they paid over $100,000, must have taken away out of the city, in the neighborhood of half a million of dollars for this one meeting alone. This would represent at a fair computation $2,000,000 for the year, without taking into account the enormous amount constantly being drained from the community by the other gambling operations.
NEVER A LOCAL AFFAIR.
In addition to these features—which certainly those responsible for the social, moral and material welfare of the community do not seem to realize—it is to be remembered that when the race-meeting has closed, when the principal thieves with their robber retainers have departed for the scene of their next activity, and good people heave a sigh of relief that their boys or their clerks or their students are now no longer in danger of this temptation, their deadly influence still remains. While the races, for instance, are progressing in St. Louis, the pool-rooms, the billiard rooms and saloons, by use of the telegraph, continue to keep alive the taint of turf gambling, to keep the temptation to our youth ever present, and to make easy for all, the deadly descent to Avernus. Here, too, the work of the skin gambler, the jackal of his tribe, is made particularly easy. Fraternities of these fragrant personalities are organized, who between the different cities keep each other “posted” on the true tips on races, and give the very latest and most reliable information as to the probabilities of each race. The dupe bets upon the regular “blackboard” reports; the scoundrel upon a dead certainty. The robber rejoices in his good fortune; the victim curses his “bad luck,” perhaps, but has no suspicion that he has not had an even chance upon the board.
POOL-ROOM HABITUES.
If any young man, or old man for that matter, who is in the least degree fastidious upon the point of keeping decent company, will but get some one acquainted with the character of pool-room assemblies, or take the trouble to exercise judgment for himself, he will learn or perceive that which will make him take himself speedily away. Here all the proper distinctions of society are violated, and the lawyer or doctor, lost by his infatuation to self-respect, may be observed taking “pointers” from a ragged and ill-smelling stable-boy. The banker, with the cashier of his competitor, are jostling with a frowsy bootblack; the business man discusses the board with the pickpocket; the thief and gambler is everywhere. The odor of state prison associations is upon many. The pimp, the bummer, the thug, the midnight housebreaker and the daylight lawbreaker, all mingle in the throng with the representatives of business probity and youthful innocence—with the prop and stay of one family, and with the hope and pride of another household. If it were not for the fascination that centers upon the betting board and renders decency oblivious to its shameful surroundings, no man of sense, with a spark of manhood or self respect about him, could, for a moment endure the contamination of surroundings so degrading. The scene is one of the most repulsive that any pure mind could conceive. It is the monstrous anomaly presented of the vesture of life with warp of virtue and woof of vice.
FEATURES PECULIAR TO THE TRACK.
While many of the evil influences which are organized in the pool-room to defraud, deceive and destroy, are common to the race-track, yet the latter possesses nefarious peculiarities whose features ought to be well scanned, and therefore carefully avoided. At the race track, while the vile types of character which infest the pool-room are to some extent visible, they have not the same freedom of communication nor familiarity with the visitor to the track as is the case in the pool-room. In the pure outer air they shrink from intrusion upon respectability, and are content to flock by themselves. Here it is, the well-dressed thief, the polite and polished tout, the sanctimonious sharper, and the keen and experienced shark, who carry on the operation of fleecing the victims of turf rapacity are to be found. The scene in itself is far from repulsive, as is the case with the pool-room. On the contrary, it is a kaleidoscopic view of human society of every decent grade seen in its most attractive form. Costly equipages, daintily dressed fair ladies, bright colors, the beauty of flowers and the fragrance of delicate perfume; men, each one dressed, like McGinty, in his best suit of clothes, moving hither and thither in constant bustle, flutter and excitement, the busy hum of multitudes of voices and the general and exhilarating impression of life, movement and animation, combine to give the race-course attractions that are apt to obscure its deadly menace to honor, honesty and morality. Looking beneath this fair exterior, however, we find a very charnel house, reeking foul with infamy and fraud.
THE LADY GAMBLER.
Here we may observe the lady of fashion in her costly equipage stopping to despatch her coachman for a card, and to take instructions for a tip. Of course he gets the tip, for he knows where to go for it. He and the tout are pals, and after the lady shall have lost every one of her eager and confident ventures and leaves the ground with pocket-book light but disappointment heavy in her heart, we may get a glimpse at the decorous coachee as he smiles softly to himself, and thinks upon the liberal portion of his mistress’ money he will have to divide with the tout in the evening. Ladies who visit the race-track to bet are carefully “spotted;” their servants are suborned, and they become the very easiest and silliest victims that fall to the lot of the “fancy.”
THE CONFIDENTIAL STAKE-HOLDER.
A common swindle in the crowd at the pool-seller’s stand at the track is the eager and excited young man who is victimized by a brace of sharpers. They have watched him and sized him up; they recognize when he is ripe enough to pick and then dexterously perform the operation of gathering him in. “Bet two to one on Susie G.,” cries Mr. Verdant Green, after a short argument with his elbow neighbor. “I’ll take you,” retorts the other, counting out his bills, “we’ll put the money into the hands of this gentleman here.” Benevolent-looking rascal, who has been abstractedly looking the other way, is appealed to and consents to be the depository of the wagers. The race is on; excitement becomes intense; everybody is straining eyes upon the flying horses. Not so the confidential stake-holder and his friend. They have gone from the gaze of Mr. Verdant Green—“though lost to sight, to memory dear.” If they could be found ten minutes later they might be discovered in the act of dividing an easily earned “swag.” This kind of swindle is as old as the flood. But all do not read the newspapers, and, as the gams say, “there’s a sucker born every minute.” That is a cardinal doctrine with them, and they ought to believe in it firmly, for does not their experience seem to prove it? No one, however, who has read this book, whether he read newspapers or not, will be liable to be deceived by this simple fraud.
SKIN GAMES OUTSIDE THE TRACK.
One of the very worst features that attend race meetings is the unavoidable presence, at every convenient point of proximity to the race track, and lining every approach and avenue to the central scene, of all the known skin games of which the reader of this book will have been afforded ample knowledge elsewhere. Here assemble the three-card-monte swindler, the shell-game shark, the wheel of fortune fakir, and in short every conceivable representative of the smaller forms of swindling by means of the practice of gambling. They cannot, it is true, get into the enclosure. Race-track representatives draw the line of its virtue there. True they are not a whit worse than their brethren inside, who play for higher game. Both are merely plundering honest people by means of gambling schemes. It is the case of the pot saying to the kettle, “Keep off; I fear you may besmut me.” But the shell game man and his confreres do not hanker to be within the sacred high fence. They can catch their kind of suckers just as well outside, as they come and go; and many a confiding innocent beside, who has not enough money to buy a seat on the grand stand, nor to make a bet on the race, has yet sufficient to lose by a turn of the wheel. They are not particular, bless you, these smaller knaves. They do not want the earth. So long as they get all the sucker has got, even though it be but a little, they are content.
Again, there are cases where the winning horse actually has become sick; so sick that he has had to be scratched, or been compelled to fail in even getting a “place,” and that even where the stable has been watched night and day by a man with a blunderbuss. Of course everybody knows, including the dupes who have laid their money on him, that the favorite has been “dosed.” Some suspect that the watcher may have been bribed by the enemy, and permitted his care to be drugged for a fee. It might be; but the odds are in favor of his innocence. The experienced mind will look for a larger villain. There was a big sum of money on the race: it would be an easy matter for the owner of the horse winning to scratch him, or allow him to be beaten, and win more than was on the board and in the stakes. Horses have been sold out by their owners, on American and English race courses, and will be again, so long as knavery lasts in the form of gambling on horse racing. And when you observe that said owner is particularly tumultuous and volcanic in the expression of his wrath, and encrimsons the surrounding air with richly embroidered profanity, then you may be tolerably sure that you might reach the secret of the case if you could only get deep down into his trousers pockets.
WAYS THAT ARE DARK AND TRICKS THAT ARE NOT VAIN.
In no other human enterprise is it more frequently demonstrated that “the race is not always to the swift.” It is a not uncommon practice for owners of a horse by confederacy with book makers, and other necessary aids, to groom a horse to win a heavy stake upon a dead certainty. First the horse and his capabilities are discovered. Then he is ridden in one or two races to lose. He becomes regarded as a permanent tail-ender. His appearance on the blackboard is greeted with derision. Reports are circulated that the horse is “sick,” particularly just before the event for which he is being held back. He makes his appearance when his time has come. Nobody will bet on him. The wildest sort of odds against him are cheerfully offered, and as quietly gathered in by the confederates of the owner and pool-seller. He takes the field and comes in an easy winner in such a handsome manner that old sports who were not in the combine, recognize, with words not loud but deep, as they go down into their pockets to settle, that they have been “sold again.” In this as in all other ways the average bettor or amateur gambler stands no show. He has no chance, though he may think he has. He is simply food for sharks.
THE JOCKEY.
As the “king maker” to the claimant to the thrones of the days of old, so the jockey to the horse race, and to the high hopes which rest upon the particular animal in his charge. The jockey is generally a kind of person who would be a stable-boy, a boot-black or a street sweeper, if he were not a jockey. Being a jockey, he is clothed in purple and fine linen, and gets his $10,000 or $12,000 per year—which would pay salaries for two ministers of the gospel of the very first water, or of at least four superintendents of schools. Is the jockey paid this magnificent salary for being a jockey? Not at all; nor is he paid for being honest. It is for being honest to his employer in carrying out his wishes in regard to the horse, as it may happen to be more profitable to the owner to win or lose. Do jockeys ever sell a race? Probably: sometimes in obedience to the orders of the owner, and occasionally on his own account. In the latter event it is generally his last race; but he can afford to retire to an opulent private life, for his reward is exceedingly liberal. Who shall tell when the jockey is riding honestly or dishonestly? He alone knows the minutest shade of the temper and capacity of the horse. Half a nose may lose a race when he has seemed to have done his best. And yet he might have won by a neck had he so elected. The plain amateur, everyday sport who is slated to be swindled in any case, as well as the anxious owner, the vendor of pools, and the maker of books, are all at the mercy of the discretion of the jockey. Hence the frills upon his raiment; hence a salary so large that it is concluded that life can offer him no other temptations. In very many instances, indeed, the jockey is the instrument through whom the thousands of dupes are sold, the owner sometimes directing the robbery, and on other occasions being included in the list of goods delivered. The high-salaried jockey is a part of an evil system. Take away the gambling feature from horse racing, and let us have honest sport, and the jockey would be glad indeed to ride “square” for a dollar a day and found. And there will be no honest competitions of speed on the race- track until the immoral, rascally and thieving element of betting on the result, or gambling, as you may be pleased to term it, has been abolished, either by legal enactment, by public opinion, or by repudiation on the part of the people who now patronize it—in which latter case, the victims refusing to come to the fold to be sheared as they do now, the evil would die for want of pockets to pick.
THE HANDICAP FRAUD.
In the “handicap” race lies one of the great opportunities for rascality on the race track. There is no doubt that some of the events which offer the largest prizes, in which the public takes the deepest interest, and which seem on the surface to be about the fairest tests of all for a square contest of speed, have become masterpieces of organized scoundrelism. The theory of the handicap is that all the horses are so exactly weighted that they start on a footing of perfect equality in the race, and that if it were possible for them all to cross in an exact line at the starting point, they would come under the wire nose to nose. Of course, to secure such an exact start is an impossibility, and the struggle is presumed to be a supreme effort on the part of each jockey to make up the space lost at the start. It makes a grand and thrilling spectacle to witness a handicap race: but it is generally a delusion. They are just going through the motions, and any gentlemen in the combination can tell you when the “start” is declared which horse is destined to come out first at the finish. In cases of crooked races of this kind, the horse is generally selected a season in advance and a combination between certain leading horsemen is made to allow him to be the winner and divide stakes and betting winnings. The stable from which this “dark horse” comes will have generally two or three others in the field, and the selected winner is ridden falsely for a whole season, and given a bad record, so as to give him so ridiculously light a weight at the handicap race that his winning is a comparative certainty. To be sure, other elements of fitness to win the race have been carefully ascertained, and his exact speed and staying qualities are well known to those interested. When he goes into the field a certain winner, he gets lightest weights and the longest odds to be had, and when he comes under the wire he is worth his weight in gold to his owner or managers. Sometimes it happens that there are two cliques working in the dark in this fashion, and then a division has to be made. A private meeting between the two selected horses is had, and this is a race for keeps and in which the best horse wins. Then both parties form a common syndicate, and labor to double the anticipated profits. Being leaders of the turf, they have ample opportunity to gull the public. The sporting papers, or sporting editors are “tipped” to systematically “bear” the winning horse, and to “write up” other horses which appear to give the public a fair chance for winning, or at least an even chance in betting upon the few favorites which have been selected for “stool pigeons,” which are “bulled,” in the estimation of the public without stint. When it comes to the test, the dark horse has a comparative walk-over; the syndicate reaps a golden harvest, and the public can divide the loss between the individual suckers who have been gulled. Sometimes it has happened that a genuine dark horse has honestly won, and these schemers come to grief. But that is as rare as teeth in the mouth of a hen, and the fact remains, generally speaking, that in this as in every other department of betting on the events of the turf, the confiding public is swindled on a deliberate system by which the professional gambler could not lose if he chose, unless he were to conspire actively to attain that end. This, however, there is no fear of, for a more selfish, cold-blooded and rapacious breed of blood-hounds never pursued a defenceless prey.
OFFICIALLY PROTECTED CRIME.
The author of this work has traveled over most of the surface of the United States, and has set up the green tables in towns and cities in nearly every State in the Union, and in each and every instance he has been compelled to purchase official protection for his unlawful trade; making payments in some cases to mayors; sometimes to the chiefs of police or city marshals, and on other occasions to individual policemen. In this way the authority that is invested with the duty of protecting society is suborned and prostituted to the vile end of extending official protection to the very crime which it is its sworn duty to exterminate. That this perversion of public authority is almost universal seems to be unquestionable. We have recently been furnished with a forcible example of this in the great city of Chicago, where it has been strikingly illustrated that when rogues fall out honest men sometimes get their own. For months in the western metropolis efforts had been made to compel the public authorities to the enforcement of the law regarding this vice. It was persistently denied by the local authorities that there was any gambling going on in Chicago, and this in the face of a general public knowledge to the contrary. In order to prove the hypocrisy of the position of the officers of the city government in this matter, a daily newspaper entered upon a crusade upon its own account. Private detectives were hired and raids constantly made for some weeks, resulting in many arrests, the seizure of a large quantity of gaming apparatus and its destruction in the court-rooms of the city. Yet, still the authorities refused to act and continued to ignore the prevalence of gambling rooms throughout the city, even after the press had given lists of names and full information upon which to proceed. It was publicly and very directly intimated that this alleged ignorance on the part of the city government was a matter of bargain and sale—that specific money payments were made by the criminals for immunity from the proper consequences of their criminal operations; that, in fact, the officials of a great corporation had been suborned to become accessory to the operations of the gamblers. One part of this nefarious understanding was that while the races at Washington Park were in progress the down-town pool-rooms should remain closed in order that the race-track swindlers might be enabled to make the most of their opportunities. With the same scrupulous fidelity which is said to characterize transactions between some other violators of the law, this agreement was carried out. Then followed another race meeting at the track of one Corrigan, a noted horseman on the West Side. Corrigan claimed the same privilege of shutting out the pool-room competition as had been extended to the Washington Park club.
The pool-room keepers refused to recognize any obligation of the kind. They claimed that their agreement with the city administration had been completed; that they could not afford to remain longer closed up, and that by reason of their payment of the assessments which had been regularly levied upon them by the representatives of the city administration, they were entitled to continue their business without molestation. Then Corrigan began a war upon them by the aid of a private detective organization, and the shameful fact that the gamblers had the protection of the police force and its management became apparent beyond dispute. Not only was this the case, but the officials who had hitherto placidly ignored general and widespread gambling in the center of the city, became the active and open allies of the city gamblers, and used their legal powers in an endeavor to punish Corrigan by making arrests at the race-track. Corrigan resorted to the courts for protection against this interference, and secured a bill of injunction restraining the Mayor and Chief of Police from interfering with book making at his track. In the bill filed to secure this injunction the whole disgraceful bargain between the representatives of the city’s police force and the crooks and gamblers was distinctly related, alleging a direct compact of corruption by which crime purchased a stipulated protection at the hands of those sworn to uphold and enforce the laws. There is little reason to doubt that this practice is not confined to Chicago. It exists everywhere. It calls for a remedy, because it is a dangerous and deadly menace to morality, and to the security and safety of society. An aroused public opinion is needed everywhere to offset this great evil, and it is one of the earnest purposes of this work that good people may be awakened to the sense of the danger that threatens the public welfare in this particular. The foundation of justice, the fountain of the law, are thus assailed with an unscrupulous boldness that would be incredible if the facts were not beyond dispute. It is impossible to conceive a graver danger to the best interests of the republic than this widespread pollution of the honor of the custodians of law and morality, and the instinct of self-preservation on the part of all the decent elements of society should point the way to a united effort to secure reform and redress.
THE EXTENT OF THE MANIA.
Year by year the fever of gambling on the races increases in intensity and the range of its operations. Thousands upon thousands go to the races who would not be able to distinguish between a Kentucky thoroughbred and a Miami valley towpath mule. They do not go for the “sport” there is in a splendid contest between the noblest of the brute creation. They go to “speculate,” to “buy pools;” in short, to gamble, in the idiotic hope that by some blind chance they may return a “winner,” with a hat full of gold bought for a silver dollar. In fact they go out sheep and they return home shorn. Speaking of the recent universality of this gambling mania, a story goes that lately a St. Louis wholesale merchant’s cashier came to him one day and said:
“I should like to get away this morning sir; my sister is to be married to-day.”
“Certainly, certainly,” said the good-natured merchant.
Presently came the book-keeper, with a rueful countenance, who said:
“I’m feeling very unwell, sir, and if you could spare me, I’d like to be excused for to-day.”
The amiable merchant cheerfully gave the requested permission. Shortly after the errand boy appeared.
“Please, sir; my grandmother died last night, and she’s to be buried this afternoon. Please may I go home?”
“To be sure, my boy,” said the merchant. “Sorry for your mother; here’s a quarter for you.”
“Well,” soliloquized the merchant, “since they’re all gone, I might as well shut up shop. I guess I’ll call and see the doctor to-day.”
At the doctor’s he got word that the physician had just been called away to visit a patient in the country, so he concluded to do some business with his lawyer. At the latter’s office he discovered that the man of law had gone to file a paper in the probate court.
“Well, if I can’t see anybody,” said he to himself, “I might just as well go over to the races awhile.”
As he approached the grand stand he observed astride the roof a small animate object, which closer inspection proved to him was his office boy, who was thus attending his grandmother’s funeral. In front of the stand stood the doctor holding a roll of bills in one hand, and shouting for bets on his favorite horse. Up on the stand he observed the lawyer wildly swinging his hat and hallooing like a maniac. Passing around the corner of the stand he came upon his sick clerk and the one who was marrying his sister, each with a schooner of lager in his hand and in an evidently hilarious condition.
“Well,” mused he, “King David was a good judge of human nature when he said, ‘All men are liars.’”
A FALSE GUIDE.
There is one topic more that may appropriately be used to conclude this chapter, and that is the recalcitrancy to the highest welfare of the people, and the best interest of true public morality, of the most powerful instrument for good or evil that to-day exists. The press of the country is not only fully cognizant of the deplorable evils that arise from gambling on the turf, but lends to it countenance, encouragement and aid; and it does so undoubtedly for the money there is in it. The newspapers spread page after page of the turf and its events over their daily issues. The attractions and the interest of the race meetings are set forth with all the skill at their command. They become agents of thieves by publishing “pointers” on the races, and giving advice to bettors which is no more honest nor reliable than that of the sharks of the pool-room. They are thus false to their high mission; false to their lofty responsibilities, which should in all things guide and direct; false to the interests of society, and to the welfare of their readers and patrons. Surely it is time to call a halt in the prostitution of this noble influence to the purposes of race track gambling and systematic knavery. The sordid influence which leads them to become an active party to the debauchery of public morals would no doubt give them the cohesion in action that grows out of a common source of plunder; but newspapers are amenable to one influence—that of a united public opinion. Let the ministers of the gospel, the natural guardians of our morality; the teachers, the parents, and all good men everywhere, bring a united and emphatic protest to bear upon the press, to induce it to desist from encouraging this national crime, and from familiarizing the youth of America with the methods and fascinations of turf gambling, and we may yet hope to see the newspapers of the land stand upon this question on the side of the family hearth, and of God and morality.
II. THE EXCHANGE
The origin of the commercial exchange is coeval with the beginning of commerce. According to that eminent Oriental scholar and historian, Rawlinson, the city of Babylon contained several of these marts, each devoted to the sale of some particular description of merchandise, and Herodotus intimates that one of them was set apart exclusively to the sale of wheat, corn, barley, millet and sesame. Athens and Rome also had their exchanges, and during the middle ages the traders of Venice were wont to assemble in the Rialto. Marseilles boasted of a Chamber of Commerce in the fifteenth century, and as early as 1566 London merchants were accustomed daily to convene in the open air at various localities in Lombard Street, until the erection of the present Royal Exchange, and to-day exchanges or bourses are among the prominent commercial features of every great European city.
The idea of a commercial exchange germinated in the United States before the war of the American Revolution. Here, as in Europe, the basis of every mercantile exchange is a voluntary union of business men, who deem it for their mutual interest regularly to assemble in some convenient locality, for the purpose of effecting the sale of commodities or securities, and of profiting by the fluctuations in market prices. Stock exchanges, produce exchanges, chambers of commerce and boards of trade are all essentially identical in character, the principal point of difference being the nature of the commodities bought and sold.
The New York Chamber of Commerce, founded in 1768, is the oldest organization of this kind in this country. Similar institutions were established in Baltimore in 1821, and in Philadelphia in 1833. In 1858 there were ten chambers of commerce and twenty boards of trade between Portland and San Francisco. In 1865 these bodies organized what is known as the “National Board of Trade.” In this association are represented Albany, Baltimore, Boston, Buffalo, Charleston, Chicago, Cincinnati, Cleveland, Denver, Detroit, Dubuque, Louisville, Milwaukee, Newark, New Orleans, New York, Oswego, Peoria, Philadelphia, Pittsburg, Portland, Providence, Richmond, St. Louis, St. Paul, Toledo, Troy and Wilmington.
As an institution, the commercial exchange has been productive of some good, but much harm. If restricted in its scope to the legitimate purposes of commerce, it is unquestionably of the highest benefit to the business world. When its operations are diverted into illegitimate channels it becomes a source of incalculable injury to society. As a great market place, it plays an important part in modern civilization; as a gigantic agency for the promotion of gambling in the commodities of the world, it is a snare, a delusion and a curse.
Not all the gaming hells of the country combined afford facilities for gambling equal to those furnished by these organizations. The faro dealer places a limit upon the stakes wagered; upon the floor of ’Change one may bet without limit. Not everyone can obtain admittance to the gilded salon of the tiger; the commission merchant, or broker, who does business upon the Stock Exchange or Board of Trade accepts orders from all comers. The character of the transactions in which his principals engage is to him a matter of indifference, his interest being centered in their frequency and extent.
To one who is not versed in the methods of conducting trading in the mercantile exchange, the jargon of the ordinary journalistic report of a day is unmeaning gibberish. “Longs” and “shorts,” “puts, calls and straddles,” “scalpers” and “plungers,” a “squeal,” a “squeeze,” an “unloading,” are terms as destitute of significance as though they were words from a foreign tongue. Yet the mode of doing business is not so complicated that any man of average intelligence need fail to grasp it. The author—as he has already stated in his autobiography—was once connected with a firm operating on the Chicago Board of Trade, and as such, acquired an intimate acquaintance with the modus operandi of its dealings, and he believes that his work would be incomplete should he ignore the marble palace through whose noiselessly swinging doors so many thousands have entered upon the path of shame which leads to ruin. Not that the Chicago Board of Trade is either worse or better than the score of similar institutions scattered through the country; nor is it intended to select that organization as the object of special animadversion. The methods of all commercial exchanges are, as has been said, substantially identical.
Members of these bodies may be classified on any one of several general principles. One system of classification has relation to the character of their operations; in other words, all members may be divided into two classes, the first comprising those who venture on their own account (popularly known as “speculators”), and the second embracing those who buy or sell only on the receipt of orders from outsiders (i. e., brokers). Under another system, members may be classified as those who wish to enhance the prices of commodities on the one hand, and those who, on the other, seek to depress market quotations. The former are technically known as “bulls,” and the latter as “bears.” These sobriquets are derived from the well-known propensities of the two descriptions of animals, the one to hoist and the other to pull down. A “bull” is one who seeks to advance prices; a “bear” one who strives to lower them. The distinction between “longs” and “shorts” is substantially of the same nature. A “long” is a speculator who, believing that the price of a certain commodity is destined to advance, buys freely in anticipation of a rise. It follows that he is naturally, if not inherently, a “bull.” On the other hand, a “short,” judging that quotations are destined to decline, sells wherever he can find a purchaser. He, naturally, is a “bear.” It must not be forgotten, however, that neither of these parties for a moment actually expects either to receive or deliver the articles which he buys or sells; and the reason for this apparently inconsistent statement will be explained hereafter.
With these few prefatory words of explanation, we will pursue the course of the speculator, after which will be given a definition of the slang terms used, and following this the reader will find a concise description of the adventitious agencies employed in the manipulation of the market.
And first, as to the speculator: He may fall within either one of two categories—the professional or the occasional. Yet even under the general caption of professional speculators, operators may be divided into two classes. One embraces men whose large wealth enables them to contrive and engineer what is popularly known as a “corner;” the other includes those who follow in their wake, believing that they can discern their intentions, and laying the flattering delusion to their souls that they can presage the course of prices. The professional speculator, as being the “larger fish,” should first claim our notice. He it is who originates and conducts “corners,” by which term is meant the forcing up of prices for any given commodity to a point far beyond their legitimate value, with a view to enriching the few at the expense of the many. Men of this stamp ordinarily associate with themselves kindred spirits, whose natural bent is the same as their own, and whose capital may prove of value in carrying out their schemes. The combination having been formed, the first objective point is the selection of some commodity or stock to “corner.” The choice having been made, the next step is, quietly and unostentatiously to buy all of it that can be purchased. Let not the unsophisticated reader for a moment suppose, however, that the syndicate thus formed proposes to buy the article in question at current rates. Far otherwise. Prices must be depressed, and there is an obvious way in which to effect this result. Every market in the world is supposed to be governed by the normal relations between supply and demand. It follows that free offerings of any commodity are likely to reduce its quotable value. What, then, are the tactics of the “operator”? Evidently to offer to sell freely. Under the influence of the precipitation of large lots, prices recede, and the speculator is shrewd enough to purchase “at the bottom of the market.” Of course he does not expose his policy by buying such enormous quantities in his own name. He has recourse to firms doing a strictly commission business, of whom he employs a multiplicity, and who always refuse to disclose the name of their principal—not from any high sense of honor, but from motives of self-interest, for the simple reason that such exposure would result in a peremptory withdrawal of business. Having secured the desired quantity of the stock or commodity selected, the clique proceeds to advance the price, not abruptly but gradually, selling a little here and buying a little there, the object being the mystification of the miscellaneous dealers. At last comes what is known as the “squeeze.” The cabal having all, or at least the great preponderance, of the article where they can, if they choose, call for its immediate delivery, refuse to entertain any offers at less than the limit fixed. The consequence is that the “shorts”—i. e., the men who have sold to the syndicate—are compelled to settle at the price to which the coalition has forced quotations. The method of operation can be best illustrated by a suppositious case. Let us suppose—simply by way of illustration—that a coterie of dealers in grain resolve to force up the price of wheat, although not to localize the illustration, we might assume the formation of a “corner” on some one of the numerous stock exchanges with which the country is blessed (?), or cursed. But let us take the Chicago Board of Trade, with whose methods the author is most familiar: Let us suppose that the article to be “cornered” is “July wheat,” and that the combination has been formed in March. Resort is had to the tactics above explained. Wheat for July delivery is first depressed, then bought, and in the end sold without regard to its inherent value, but solely with a view to what the “shorts” may be forced to pay. The profits of such “corners,” thus constructed, are sometimes enormous. Yet, as in the game of faro, the most expert dealer is sometimes put to heavy loss by the combination which is playing against the bank; so even the machinations of the strongest and shrewdest operators are brought to naught either by a combination of brighter minds, by a failure carefully to guard every weak spot, or, it may be, by very chance. The same elements are present in both games, faro and stock-jobbing. These corners are conceived in cupidity, carried on in deceit, and consummated in heartlessness; yet there are not wanting those who affirm that the commercial exchange is the very prop and bulwark of American commerce! That the exchange, in its legitimate scope, affords an easy and safe way of doing business, cannot be denied; that its practical operation is to foster speculation and encourage reckless gambling is equally indisputable.
This assertion seems, on its face, perhaps, ill-considered, yet it is abundantly justified by facts. We have, thus far, considered only the tactics of the professional “operator.” Let us, for a moment, consider the fortune (or misfortune) that awaits the occasional speculator. The latter closely resembles the man who plunges, headlong, into the Niagara rapids without even a rudimentary knowledge of the art of swimming. Like a chip, he sports upon the crest of the eddying waters of the whirlpool, until, gradually drawn nearer and nearer toward the centre, he is sucked into its very vortex, sinking to reappear no more. Yet this comparison is weak. The outside speculator who fancies that he can buy or sell on “pointers,” (i. e. private information) given him by parties well- posted, very nearly approaches an idiot in the matter of intelligence. Let us take, as a single illustration, a case which fell under the author’s personal observation. The experience of the victim (whom we will call Jones) is by no means exceptional. Mr. “Jones” was advised by a friend (?) that “old Higgenbotham” had bought up all of a certain article and that within sixty days prices were destined materially to appreciate. Naturally “Mr. Jones” found his interest, as well as his cupidity stimulated. What would his friend recommend him to do? “Buy, of course; and buy heavily,” was the answer. “But I don’t know how to buy,” objected Jones. “Why,” replied his advisor, “that’s the easiest thing in the world, Q X & Z, one of the best houses in the street, are particular friends of mine. Take my card and go down and see them. They’ll use you right.” The unfortunate “Jones” listened to the siren song. He interviewed Q X & Z, by whom he was received with distinguished consideration. The firm of brokers explained to him how he could, by depositing with them a “margin” of five per cent. on the par value of his prospective purchase, become the putative owner of twenty times the amount of his deposit. Of course he must buy for future delivery, this not being a “cash” transaction. But there was no doubt that prices would advance. Oh, certainly not.
Mr. “Jones” was naturally a little timorous, being unaccustomed to speculation. He advanced a few hundred dollars, however, by way of “margins,” and at the conclusion of the “deal,” found himself winner by a handsome sum. His experience was a revelation to him. He ventured again and again, with varying success. Finally he found himself heavily interested on the wrong side of the market. He was assured that prices must necessarily take a turn, and he could ill afford to lose the sum already risked.
To understand the nature of the risk which he had incurred, however, some explanation of the method of speculating by means of margins is necessary. To illustrate: let us suppose that a certain article—say, wheat is to-day at $1.00 per bushel, of course 10,000 bushels are nominally worth $10,000. Imagine a legitimate purchase of such a quantity at these figures. Should the price advance one cent per bushel, the 10,000 bushels would be worth $10,100; should it fall off one cent the wheat would be worth only $9,900. In the former case the buyer would win $100; in the latter he would lose a like sum. In the case of a bona- fide sale, the whole of the $10,000 is actually paid. In a speculative transaction the purchaser only advances a part of the price, usually a few cents per bushel, which is placed in the hands of his broker, who gives him a receipt therefor. The commission merchant conducts the business in his own name, assuming personal responsibility for the payment of the money. To protect himself against possible loss, which may result from violent fluctuations in the market, he insists upon a marginal deposit as above stated. Should the depreciation in value approach the limit of the margin, the speculator is called upon to advance more money. If he fail to do so, and the decline continues, the broker protects himself by selling out the article bought, charging his customer with the loss sustained, together with his own brokerage charges, and handing over to him whatever small balance may remain to his credit. In the case of a speculative sale, precisely the same methods are employed, except that as the seller’s gain is derived from a depreciation and his loss through an advance, when the “margin” is in danger of being “wiped out,” the broker closes the transaction by buying on the customer’s account instead of selling.
But to return to the experience of Mr. “Jones.” As has been said he had ventured largely, and he found himself confronted with financial ruin. Although engaged in a money-making business, he had plunged so deeply into the maelstrom of speculation that his capital was seriously impaired. What was to be done? To withdraw meant bankruptcy; yet, how could he go on? Only one way presented itself to him. He was the executor of his brother’s will and the guardian of his brother’s minor children. The trust funds placed under his control might be utilized to avert impending disaster. Not that he would wrong the orphans whose patrimony had been committed to his care, but he would temporarily borrow the money of the estate, to be returned with interest, within a few weeks. He succumbed to the temptation and the result need hardly be told. The combination formed for the purpose of controlling prices absorbed these funds as it had the others, with the same relentless rapacity as do the knights of the green cloth the last hard-earned dollar of the day-laborer. The day of settlement arrived, the bubble burst and the unfortunate man found himself buried fathoms deep in dishonor and ruin. Not only was he penniless, but he realized that wherever he went the finger of scorn pointed out his every step. A temperate man before, he plunged headlong into dissipation. His wife found herself compelled to leave him, and to-day, stripped of fortune, bereft of family, deserted by friends, he walks the streets with faltering tread, aimlessly and hopelessly; living God knows how; hanging about bucket-shops and pool-rooms, considering that a fortunate day on which, honestly or dishonestly, he can earn half a dollar.
Nor is this an isolated case. The speculator who has been alluded to is but a type of a class of men whose name is legion. The ruined reputations of confidential clerks, cashiers and administrators of trust funds mark the path of the reckless operator as milestones mark the causeway. The terrible fascination of gambling, whether through speculation or cards, when once the votary has succumbed to it, can be most fitly compared to that of the opium habit. The victim of this body- debasing, soul-destroying vice is willing to risk his hopes, not only for time but for eternity, on the gratification of his appetite. So does the devotee of the faro table or the man infatuated with the allurements of the exchange stake his life, his honor, his very salvation upon the turn of a die or the rise or fall of a particular stock.
Better, far better, were it for the man who enters a gaming resort that his first wager prove unsuccessful; far happier would he be who determines to “speculate in futures” did his first venture result in heavy loss. In either case the influence of failure would prove a deterrent sufficiently powerful to avert years of future misery, if not ultimate destruction.
The technical nomenclature of the exchange—sometimes termed the “slang of the street”—which, as has been remarked, is incomprehensible to the uninitiated, in itself affords some key to the nature of the business transacted. Some of the most common terms are here defined, although to enumerate them all would swell the dimensions of the present chapter beyond the limits assigned it.
A “scalper” is an operator who makes it his practice to close his transactions as soon as he can see a small profit, say a quarter of one cent. His operations are neither more nor less than betting on a rise or fall in prices.
The “guerilla” is a species of the genus “scalper,” few in number, and makes a specialty of dealing in stocks and commodities: So unsavory is the reputation of this class that it has fixed the appellation of “Hell’s Kitchen” and “Robber’s Roost” upon certain localities in the New York Stock Exchange.
Still another class is composed of those who strive to enrich themselves by the fictitious rise and fall of a particular stock in which they constantly deal.
The terms “long” and “short,” when used as adjectives, have been already explained, and their signification when employed as nouns is practically the same. A “long” is a speculator who has bought heavily in anticipation of a rise. A “short” is one who has sold freely in expectation of a decline. The action of the former is called “loading.”
“Forcing quotations” is keeping up prices by any means whatever. When this is accomplished by the dissemination of fictitious news or the circulation of unfounded rumors, the operator is said to “balloon” prices.
A speculator is said to “take a flyer” when he engages in some side venture; he “flies kites” when he expands operations injudiciously; he “holds the market” when he prevents a decline in prices by buying heavily; he “milks the street” when he manipulates so skilfully that they rise or fall at his pleasure; he “unloads” when he sells the particular stock or commodity of which he is “long;” he “spills stock” when he offers large quantities with a view to lowering or “breaking” prices; if he is successful in these tactics he is said to “saddle the market.”
A “bear” is said to be “gunning” a stock when he employs all his energy and craft to “break” its price. He “covers,” or “covers his shorts,” when he buys to fulfill his contracts. He “sells out” a man by forcing prices down so that the latter is obliged to relinquish what he is “carrying,” perhaps to fail.
The nature of a “corner” has been already set forth in detail. The operator or clique organizing and managing it is said to “run” it. The day when final settlement must be made between the opposing parties engaged in such a transaction is termed “settling day.” If the “bears” are forced to settle at unusually high prices they are said to be “squeezed.” The “squeeze” which has followed many a corner has precipitated not a few wealthy men into financial ruin. This circumstance, however, is usually a matter of utter indifference to the manipulators. The success of a “corner” is sometimes prevented by what is known as a “squeal,” or revelation of the secrets of the pool or clique by one of its members. Sometimes the plans of the organizers of a “corner” are brought to naught by a “leak” in the pool, that is, by one of the members secretly selling out his holdings. Of course, a “corner” can be formed only on what is known as a “future,” or future delivery, by which is meant the sale and purchase of some stock or commodity to be delivered at some period in the future.
Yet another form of gambling very common upon the floors of stock and commercial exchanges is known as dealing in “puts,” “calls” and “straddles.” When a person buys a “put,” he pays a stipulated sum for the privilege of selling to the party to whom it is paid, a certain quantity of some particular stock or other article, within a fixed time, at a designated price. Thus A might pay to B one hundred dollars for the privilege of selling him one hundred shares of Union Pacific stock at a stipulated price, within ten days. As a matter of course, the price named is always a little below the current quotation ruling at the time the contract is made, i. e., the day upon which the “put” is bought. If, for instance, the “put” is sold at 80 cents on that day, and the market declines to 75, A might tender to B the one hundred shares, and the latter would be compelled to take them at that price. In such a case A would have gained five dollars per share, or five hundred dollars in all, provided he had “covered his shorts,” i. e., bought in the stock which he had already put, at the latter figure. As a matter of fact, neither party contemplated an actual delivery. The market having declined, A’s net gain is, of course, only four hundred dollars, he having already paid one hundred dollars to B. This appears an easy method of winning money. As a matter of fact, however, experience has shown that very few men win through the purchase of “puts” and “calls.”
A “call” is similar in its general nature to a “put,” but differs from it in that the buyer of the former has the privilege of calling or buying a certain quantity, under the same conditions. The seller of the “put” contracts to buy, and of the “call” to sell, whenever the demand is made.
A “straddle” is a combination of the “put” and the “call,” and is the option of either buying or selling. The cost of these “puts,” “calls,” and “straddles,” which are known as “privileges,” varies from one to five per cent. of the par value of the stock, or the market value of the commodity involved, and depends upon the time they have to run, the range covered, and the activity and sensitiveness of the market.
It is claimed in behalf of these privileges that they are, in their essence, really contracts of insurance, and as such are entirely legitimate. The general public, however, has always regarded them as a complex system of betting, and believes that they constitute one of the most pernicious features of the exchange. The fallacy of the argument in their favor, above outlined, becomes apparent when it is remembered that the law regards all contracts of insurance as being one form of gambling, and sanctions and enforces them only on grounds of public policy. The burden of proof is upon the defenders of “puts” and “calls” to show that, even if it be conceded that they are contracts of insurance, they can be justified as being necessary to the furtherance of commerce or the welfare of society. That they do not tend to promote commerce is shown by the fact that neither party to the transaction for a moment contemplates the actual delivery of the article bought or sold. It is essentially a wager between two individuals as to the future course of the market, one betting that prices will advance, and the other that they will decline. The absurdity of claiming that they promote the general welfare of society, (were such a claim advanced), may be easily demonstrated by calling attention to the economic consideration that the winner has done nothing to produce the money which he pockets, and by pointing to the pecuniary loss and moral debasement which they entail. They sustain somewhat of the same relation to the dealings of the large operators as does the keno room to the faro bank.
The legislature of Illinois, a few years ago, placed the seal of its condemnation upon the practice by making it a misdemeanor to deal in privileges. It is said (although the author is unable to vouch for the truth of the statement), that this virtuous action on the part of the lawmakers was due to the influence brought to bear upon them by a well- known member of the Chicago Board of Trade, who had been dealing extensively in “puts” and “calls,” and had lost heavily. However that may be, the Chicago Board, after permitting the practice for years, adopted a rule prohibiting their sale, and even went to the length of suspending a few members for its violation, among them being one of the most prominent operators upon the floor. This spasm of virtue, however, was not of long duration, and at the present time such privileges may be procured from members of that august body with the greatest ease.
The action of this great Western Exchange in the premises may possibly have been prompted by motives other than a desire to comply with the statutes. Long after the enactment of the law, privileges were sold as freely as before its passage. In time, however, it was found to be a two-edged sword. Operators found it possible to purchase “puts” for the purpose of buying against them, and to buy “calls” with a view to shield themselves from loss when they became “bears.” Thus an army of sellers appeared when the “call” price was reached, and a horde of buyers when the market touched the price at which “puts” had been sold, the consequence being that the range of the market was curtailed. Members objected to tactics which robbed the market of that elasticity so dear to the speculator’s heart. Carping critics say that the virtue of the directors was the outgrowth of disappointed self-seeking. In other words—speculation—the very life-blood of the exchange was being curtailed. Hinc illae lachrymae.
But the action of the directors, as was soon found, rendered it possible for certain members, who were willing to incur the risk, to do a thriving business in privileges provided the transactions were secret. Of course firms desiring to obey the rules were at a disadvantage, and legitimate brokerage suffered. There was one obvious, logical conclusion: “Allow every one to engage in the business or no one.” This commended itself to common sense, and a carefully worded resolution was adopted, the practical effect of which, as every one understood it, was virtually to remove the ban from the sale of privileges. Since that time, “puts” and “calls” may be purchased with the same ease as one may pay his taxes.
But let us return to the methods employed in the manipulation of prices. Reference has been already made to the very common practice of attempting to “bull” or “bear” quotations by buying or selling large quantities, or “blocks” of some particular article. There is probably no description of market in the world so extremely sensitive as the commercial exchange. A sale or purchase of any given commodity by certain, well-known operators, is often sufficient to excite its pulse to fever heat. A similar result may ensue from a report that the Secretary of the Treasury contemplates a call of a certain denomination of bonds; that Bismarck had been heard to say that the French blood was too thin and needed a little more iron; that a norther in Texas had killed a herd of cattle; that a few grasshoppers had been seen in the neighborhood of Fargo; or that the mercury was believed to be about to fall in Northern Minnesota. The great speculators, the master minds of these gigantic institutions, are quick to perceive this sensitiveness, and equally prompt to avail themselves of it. Fictitious news is as potent an agency in advancing or depressing prices as is the genuine article, and it is a sad truth that there are not wanting large operators who do not scruple to employ it. It is said—and there is good reason to believe the statement to be true—that there are men at all great commercial centers whose only occupation is the dissemination of unfounded reports, with a view of raising or lowering the prices of certain commodities in regard to which the rise or fall of a fraction of a cent may mean the gain or loss of millions. These manufacturers of fictitious news are said to “wear purple and fine linen and fare sumptuously every day.” The results of their operations are to be found in the wrecking of important financial and corporate interests and the corresponding enrichment of the unprincipled manipulators who employ them.
Some years ago, there came a mysterious rumor to the New York Stock Exchange, that the directors of a certain railroad in the Northwest had decided upon taking a step which could not fail to prove disastrous in the extreme to the interests of the corporation. No one was able to tell just where the rumor originated, yet it found sufficient credence to depress the price of the road’s stock, and to induce free selling. The next day came the refutation of the story; the stock recovered its tone, and the clique in whose interest the lie had been sent over the wires reaped a profit of $60,000. In the slang of Wall Street this was called “a plum.” It is difficult to see the difference in moral turpitude between such tactics as these and “steering” for a “brace” faro bank.
An acquaintance of the author, who served with distinction during the late civil war, on his return home, was employed by a company owning alleged oil lands in Pennsylvania, to superintend the sinking of wells within its territory. The salary was liberal and the duties not arduous. Wells were duly sunk, but no oil discovered, after a time, the gentleman in question received instructions from the headquarters of the company in an Eastern city to telegraph, on a certain day, that a well recently sunk, was yielding a certain large number of barrels per day. This dispatch was to be followed, a day later, by one of similar tenor, making a like assertion in reference to another well. The party who gave these instructions well knew that a certain class of speculators on the exchanges are in the habit of discounting private information through the bribery of telegraph employees, and he placed no little reliance upon this fact for the furtherance of his scheme. The event proved that he had calculated wisely. The telegrams were duly sent and were read by other parties before they reached the man to whom they were addressed. The result was that the company’s stock bounded upward with the celerity of a rubber-ball, and the projectors of the enterprize unloaded at an enormous profit. Of course, the purchasers found out that they had been deceived, but as none of the officers of the corporation had disseminated the report of the finding of oil, it was impossible to attach any responsibility to them.
And yet there are not wanting those who affirm, and stoutly maintain, that without the commercial exchange, business would be brought to a stand-still, and commerce paralyzed; that Boards of Trade and Produce and Stock Exchanges are prime factors in advancing the welfare of the country. And this is said despite the fact that the percentage of legitimate business done is utterly insignificant in comparison with that which is purely speculative in its character. The sales of one agricultural product alone upon the floor of a single mart of this sort for one month alone have been known to equal the production of the entire country for a whole year! Is this legitimate commerce, or is it gambling on the wildest and most extensive scale? Members of various Boards in the United States who assume to do a strictly legitimate business, send out circulars through the rural districts, the sole object of which is to induce the recipients to speculate upon the floor of ’Change. These communications depict, in glowing terms, the ease and certainty with which ignorant countrymen may acquire fortunes in a day, through the purchase of a “put” or a “call,” or a “straddle.” They purport to explain, fully and clearly, the methods of speculating in stocks and grain, and represent the system as simple and easily comprehensible, while the authors know that the system is in itself complex and the issue a venture—at the very best—uncertain. It is not pretended that the transaction contemplates an actual transfer of the commodity from seller to buyer. Is this frank? Is it manly? Is it honest?
Scarcely a decade has passed since the whole country rung with the echoes of the “Fund W” scandal. Unquestionably the men who engineered that gigantic scheme of fraud were not representative members of any commercial exchange, yet it is equally certain that but for the facilities afforded for the perpetration of the fraud through the Exchanges’ methods of doing business, that stupendous swindle would have been impossible. Yet the infatuated speculators who do business through legitimate houses, believe that they can trust their own judgment as to the future of the market! It may be that such folly has its parallel, but it is not to be found in that of the man who stakes his money on the issuance of a particular card from a faro box.
Few of those who have never witnessed the daily routine of business on the floor of an Exchange can conceive the wild uproar, the hubbub, the confusion, the tumultuous excitement, which there reigns supreme. Let us take a glance at one of the best known. During the busy hours of the session the floor of the magnificently proportioned room is crowded. Scattered about at distances more or less regular, are large marble- topped tables, about which gather groups of men engaged in quiet, though sometimes earnest, conversation. These tables contain drawers, in which members, who pay well for the privilege, keep samples of the commodities in which they deal. Hurrying to and fro about the room may be seen brokers and their clerks, carrying in their hands small paper bags, containing samples of grain which has been consigned by growers or other shippers, for sale. Similar bags are strewed all over the tables. Everything indicates activity, and it is evident that important business is being transacted. The sound of the voices of the traders rising from the floor to the visitors’ gallery, joined to the clicking of the myriad of telegraphic instruments, reminds one of the ceaseless hum of bees around a hive, heard in midsummer, when the nodding clover and bending buckwheat invite the tireless workers to taste their sweets.
Such is the scene during the early hours, but as the morning advances the picture changes. In the center of the room are four octagonal “pits,” formed by short flights of steps which rise from the floor on the outside and again descend on the inside. In these so-called pits is carried on the heaviest business of the Exchange. One is devoted to the sale of wheat, another to corn, and a third to provisions, pork, lard, etc. Gradually, as the minutes and hours pass, they fill with an eager crowd of traders, which swells in numbers until the area itself and the steps leading to it, are literally jammed with an excited throng, yelling, gesticulating, waving their arms and shaking their fists in each other’s faces. The hum has risen to a surge, and to the onlooker in the gallery the scene seems to have been transformed into Bedlam or pandemonium. On the upper row of steps of one of the pits, men stand facing each other, forty feet apart. One raises his hand and makes what appear to be cabalistic signals to the other, who makes some other equally mysterious signs. Then each produces a card on which he makes an entry, and the dumb show is duplicated by others. To understand this pantomime, no less than the significance of these frenzied cries and frantic gyrations of arms and fingers requires an education of peculiar character, the education of the habitué of the floor. Each motion of the hand, each turn of a finger has its significance, representing the quantity of the particular commodity sold, and the price at which it is bought. These angry, dissonant voices, proceed from the hoarse throats of opposing factions, one trying to “bull” and the other to “bear” the market, and each striving to rival the other in clamor and persistency. No wonder that the excitement is intense. The entire wheat crop of the country is being sold before it is harvested, and much of it before it is planted, and on transactions of such magnitude a variation in price of even a fraction of a cent, means the gain to one and loss to another of tens of thousands of dollars. Fortunes are accumulated and sunk in an hour. One operator sees wealth within his grasp; another perceives bankruptcy staring him in the face. It is not strange that under such circumstances the strongest passions in the human breast should struggle for mastery, and find vent in expressions as wild as they are exaggerated.
Yet outside this howling, seething, surging crowd, within hailing distance from the center of all this hubbub (were language audible at a distance of thirty feet), sits a row of men, some of them in the prime of life, some of them scarcely past its meridian, others wearing the silver crown of age. Cool, collected, seemingly dispassionate, they exchange conversation which appears to be humorous, to judge from the laughter which it provokes. To the casual observer, they seem to be in the “madding crowd,” but not of it. Yet one who carefully watches their movements may see that from time to time signals are exchanged between some one or other of them and some individual on the steps of the pit. These men, thus sitting apart, are the great operators, those who make prices, and whose every movement is watched, as possibly affording a clue to their intentions. Jealously, however, do they guard their secrets; impassable are their countenances, and imperturbable their demeanor. With the seemingly stolid indifference of the veteran gamester, who sees his last dollar swept from the table by the turn of a card and gives no sign of regret, these men calmly witness the wiping out of a fortune by a rise or fall in prices, and manifest not the slightest indication of emotion.
To the visitor sitting aloft the spectacle is strange, bewildering, fascinating.
But let us descend to the floor, to enter upon which the stranger must obtain a card of admission. Here one passes men who have won largely, but whose countenances betray no symptom of exultation, and others whose losses have been heavy, yet whose laughing faces and merry jests indicate no dissatisfaction either with the world or with life. The busy operators at the telegraph key-board are too much absorbed in their work to give heed to the Babel of confusion around them. Messenger boys scurry hither and thither, in anxious quest of men for whom they bear tidings, perhaps of grave consequence. Suspended from various points about the room are charts, tables and diagrams, relating to almost every conceivable subject, the report and forecast of the Signal Service office; the supply of cereals at every market in the civilized world; the movement of breadstuffs and provisions at home and abroad; the cargoes of steam-ships from American, European and East Indian ports; comparative statements of receipts and shipments; and one thousand and one other matters, a knowledge of which may be of interest to members. On the front of one of the long galleries are huge dials, whose index fingers record the fluctuations of prices in the pit. On days when speculation runs riot and excitement is more than usually rampant, these pointers sway to and fro with a rapidity of movement almost bewildering.
But before we have satisfied our curiosity, or sufficiently indulged our admiration of the completeness of the mechanism of the gigantic machine whose revolutions we have been contemplating, the striking of the great gong indicates that the active business for the day in one of the world’s greatest marts has closed. To one who has regarded the transactions with the indifference of a chance spectator, this sound means little more than the tolling of the bell, which in some high tower marks the hour. But on more than one listening ear upon the floor it falls like the knell of doom. To many a venturesome speculator who has unfortunately placed himself upon the wrong side of the market, it is ominous of a crisis in his affairs which must be promptly met if he is not to be overtaken by ruin, perhaps by disgrace. He must become a borrower, or be publicly posted as being unable to meet his contracts. Perhaps he has already overstrained his credit, and knows that his commercial paper must go to protest. Who can surmise all the varied feelings which the sound of that gong awakens in the breasts of not a few of those who hear it? Yet no sign of emotion is visible in the vast throng of brokers and their principals as they descend the broad marble staircase or hurry to the elevators. They laugh, smoke and chat as though they were returning from a merrymaking, rather than from a gathering where millions of money had been staked, and where, perchance, some of them had sold their honor for a mess of pottage.
The charter powers bestowed upon some of these commercial corporations is enormous, rivalling those conferred upon courts of law. Thus, the charter of the Chicago Board of Trade contains the following provision:
Section 7, after providing for the appointment of a “Committee of Reference and Arbitration,” and a “Committee on Appeals,” and fixing their jurisdiction, further provides that “the acting chairman of either of said committees, when sitting as arbitrators, may administer oaths to the parties and witnesses, and issue subpœnas and attachments compelling the attendance of witnesses, the same as justices of the peace, and in like manner directed to any constable to execute.”
Section 8 contains provisions of an equally extraordinary character. It reads as follows: “Whenever any submission shall have been made, in writing, and a final award shall have been rendered and no appeal taken within the time fixed by the Rules or By-Laws, then, on filing such award and submission with the Clerk of the Circuit Court, an execution may issue upon such award, as if it were a judgment rendered in the Circuit Court, and such award shall thenceforth have the force and effect of such a judgment, and shall be entered upon the judgment docket of said Court.”
The granting of such extra-judicial powers upon men who possess no special aptitude for their exercise is, to say the least, an anomaly in jurisprudence. That a court so constituted should naturally incline to the enforcement of agreements which are, in their essence, gambling contracts, is no more surprising than that juries of unbiased men should set them aside, or that courts, whose aim is to enforce the spirit as well as the letter of the law, should non-suit plaintiffs seeking relief under their provisions. Over and over again have courts and juries declined to regard a sale, the parties to which did not contemplate a bona fide delivery in any other light than as a bet or wager, the collection of which could not be legally enforced. It is a serious question whether an act clothing a loosely organized—if not self- constituted—tribunal with the powers of the highest court of original jurisdiction in a great commonwealth, is not a blot upon the judicial system of the State which sanctions it.
In what has been said, however, the author intends to draw no invidious distinction between the commercial exchanges of the country. As a rule, they occupy the same plane; and in respect of being a blessing or a curse to the country at large, they must stand or fall together. At the same time, the Board of Trade of the Western metropolis has seen fit to take a position which is, to say the least, somewhat anomalous. In the preamble to its “Rules and By-Laws” it declares that among its objects are: “to inculcate principles of justice and equity in trade * * * *” and “to acquire and disseminate valuable commercial and economic information.”
As regards the “principles of justice and equity in trade” which are “inculcated” by commercial exchanges generally, nothing more need be said. Were the transactions on their floors confined to actual sales at prices influenced only by legitimate means and natural causes, there can be little doubt that they would prove potent factors in the furtherance of commerce and advancements of its best interests. It is not in this aspect that the author is considering them. His reprehension of their practices is predicated upon the other, and broader, side of their character, i. e., their speculative side. It can scarcely be called an open question whether it “inculcates principles of justice and equity in trade” for one man to buy up all the wheat in sight (and out of sight too, for that matter) and then force an alleged buyer, but an actual rival whom he has done his best to mislead, to settle with him at a price exceeding by 100 to 150 per cent. the actual value of the commodity.
But it is the “object” last mentioned—the “dissemination of valuable commercial and economic information”—concerning which the exchange in question has taken such a peculiar position. Originally, the “information” at its command, whether “valuable” or otherwise, was “disseminated” with the automatic regularity of clock work. Whether this dissemination was undertaken for the benefit of the public at large, or from motives purely selfish is immaterial in this connection, although the “object” may be, perhaps, inferred from the course of the directors. It was found that places far less pretentious were being opened and were doing a thriving business. Within the shadow of the great tower sprang up an “Open Board,” which attracted speculators who might otherwise have conducted their operations through the channels opened by the more august body. Moreover “bucket shops” (the pernicious character of whose methods will be explained hereafter) multiplied and flourished. The quotations of the regular exchange were as the “vital air” to the smaller concerns. “Withdraw our quotations,” said the directors, “and all competition will come to naught.” A wrangle ensued, followed by litigation in the courts, resulting in the triumph of the more renowned body, the “genuine, old, original Jacobs.” In other words, the “dissemination of valuable commercial and economic information,” came to an abrupt and untimely end, and one of the “objects” of the organization, announced to the world with gravity, parade and rhetorical flourish, failed of accomplishment.
Alas for the rarity Of Christian charity Under the sun;
And alas, too, for the sincerity and consistency of poor, weak human nature.
Some years since, the president of this same exchange, in congratulating the members upon belonging to the ideal institution of the world, went out of his way to stigmatize all the other exchanges of the country as “bucket shops,” justifying his assertion by the charge that the latter depended for quotations upon that over which he presided, a circumstance which, in his opinion, formed the essential nature of a “bucket shop.” In other words, if the “valuable commercial and economic information” as “disseminated” by one body were used by members of another similar organization, the latter were preying upon the public, setting snares for the unwary and fleecing the ignorant. It is difficult to conceive of any loftier height to which egotism could soar. Of what value are the charts and diagrams to which reference has been made except to “disseminate” among members of this particular exchange the “valuable commercial and economic information” gathered by a kindred organization?
Yet the self-stultification went even farther. At the very moment when the chief executive of this board was indulging in these rhapsodical flights of rhetoric, a determined effort was being made to open, in connection with that institution, as a sort of “side-show,” a stock exchange, where speculation might be carried on for the benefit of brokers and others, which should be based upon “information disseminated by the New York Stock Exchange!” Could inconsistency farther go? To use quotations on grain and provisions is piratical; to take advantage of quotations on stocks derived from a market one thousand miles away is, in every sense, proper and legitimate!
This fact is not mentioned in derision of the particular organization in question, but as an illustration of the absolute selfishness, the unbridled greed for gain, and the instinctive spirit of gambling which form the salient features of the average American commercial exchange as it exists in the present year of grace. For its members, the world is divided into two classes—the exchange and the rest of mankind, the latter having been created for the aggrandizement and glorification of the former. If the dissemination of information result in the enrichment of the master spirits, and the garnering of a golden harvest of commissions by brokers, let the good work go forward; if the publication of private news, however untrustworthy, will, like an ignis fatuus, lead the unsuspecting still further into the morass of blind and reckless speculation, let the “valuable economic information” be scattered broadcast upon the four winds of Heaven. But palsied be the hand which, with unhallowed touch, would desecrate the ark in which is contained the sacred privilege of the members to monopolize the fictitious sale of breadstuffs and provisions, to absorb alike the fortunes of the rich and the earnings of the poor, who like foolish children, chase the rainbow, in the vain hope that at the foot of the arch, so gorgeous in its prismatic tints, they may find the fabled pot of gold.
Yet if the legitimate exchange presents features worthy of condemnation, what shall be said of those veritable plague spots upon the body commercial, those festering cancers which eat into the very heart of social morals—the “bucket shops”?
These institutions are peculiar to American cities. The more phlegmatic temperament of the denizens of the old world does not lead him into the vagaries of the citizen of the “great Republic,” where wealth fixes caste, and gold is too often worshiped in the place of God. In the United States, more than in any other country, activity, mental as well as physical, is regarded as the chief end of man. In fact, a rocking chair under full swing, would be no inappropriate heraldic national emblem. It is true, as a German paper says of us, that we “chew more tobacco and burst more steam engines than any other nation on earth.” With us, life is restless, and we can find recreation only in excitement. It is this feature of our national character that inclines us to gaming and to speculation in a far higher degree than any other people. Could it be eliminated from our nature the “bucket shop,” like Othello, would find its occupation gone.
Yet the reader, the lines of whose quiet life are cast outside the whirl and turmoil of a great city, may not understand the signification of the term. A “bucket shop” is an establishment where those whose inclinations prompt them to speculate in stocks or produce, but the scantiness of whose means forbids their operating on an extensive scale, may gratify their tastes by risking (and losing) the few dollars which they can ill afford to spare. The epithet “bucket” is a term of derision, having been originally applied to such an institution to imply that a customer might buy or sell a “bucketful” of any commodity which he might select.
These concerns differ only in respect of size and appointment. They are all conducted on one and the same principle. The visitor, on entering, finds himself within a large room, sometimes handsomely, sometimes meanly furnished. Rows of chairs are arranged for the convenience of customers and chance-comers, facing a blackboard. The latter is the indispensible requisite, the sine qua non, without which the transaction of business would be practically impossible. In these chairs are seated men of every age and of nearly all grades of social distinction. Clerks, artisans, merchants and men about town mingle in a sort of temporary companionship, truly democratic. Beardless youths sit side by side with men whose heads have grown bald and whose step has become feeble in a vain chase after a phantom, a chimera, a will-of-the- wisp, always just within the grasp, yet ever eluding the clutch. Here may be met the confidential clerk, who sees nothing wrong in following, at a respectable distance, the example of his employer, who ventures his thousands upon the floor of ’Change. Here one jostles against the decrepit old man, once a millionaire, but who having sunk his fortune in the maelstrom of some great Board of Trade, now passes his waking hours before these blackboards, reckoning that a red-letter day upon which he wins five dollars. And here, too, may be encountered the successful business man, keen of eye, quick of step, alert of perception, who has been drawn hither partly through a desire for speedy wealth, partly through an inordinate craving for the excitement which is not to be found in the legitimate walks of trade. The eyes of all are turned toward the immense board on which, chalk in hand, some attache of the establishment momentarily records some change in quotations of stocks or grain, and which seems to have for them all the fascination of the candle for the moth.
Far different is the scene here presented from that witnessed on the floor of the great Exchange. There all was clamor and apparent confusion; here quiet and decorum reign supreme. The silence is unbroken, save by the sharp tick of the telegraphic instrument and the droning monotone of the blackboard marker. Yet there is one point of resemblance between the habitues of the “bucket shop,” the dealers upon ’Change and the patrons of the gaming hell; one and all, they win without displaying exultation and lose without manifesting regret. In the “bucket shops,” however, the attentive observer may sometimes hear the heavy sigh of dispair from the young man who has been tempted to risk his employer’s money, as he perceives the last dollar of his margin swept away by an unlucky turn of prices; or witness a senile smile of satisfaction momentarily gleam upon the face of the feeble old man who sees himself about to be provided with the means of keeping soul and body together for another day. O, wretched picture of sordid greed, of fallacious hopes, of blank despair! O, sad illustration of the sadder truth that in the contact for the mastery of the heart of man, the evil too often outstrips the good!
But let us examine into the business methods of the proprietors of these resorts where gambling is made easy, and ruin is placed within reach of the humblest. As an illustration, let us suppose that the customer wishes to speculate in some stock, say Missouri, Kansas and Texas. The blackboard shows the fluctuations in quotations as they occur on the New York Stock Exchange. The margin which he is called upon to advance, is one dollar per share, and he may limit his transactions to five shares, if he sees fit. It is a matter of indifference to the proprietor whether he elects to buy or sell; that obliging individual will accommodate himself to his wishes, whatever they may be. Suppose that he buys five shares of the stock in question, at a moment when it is quoted at 16¼. If it rises to 17¼, he may, if he chooses, close his deal, receiving back the five dollars which he advanced as margin, together with another five dollars, the latter representing his profit. If, on the other hand, it drops to 15¼, he loses his margin. It is easy to see that such a transaction as this is nothing but a bet, pure and simple.
The illustration given above is drawn from the smallest description of business done. Yet, as has been said, these dens of iniquity are patronized by the wealthy merchant, as well as by the poor mechanic and clerk. It is on the poorer class of customers that the proprietors depend for their steady income; it is from the wealthier customers that they obtain sums of money which they denominate “plums.”
The manner in which such traders are fleeced by the unscrupulous scoundrels who conduct these institutions may be illustrated as follows: One of them will inform a confiding patron that he has received information from a source which he regards as trustworthy, that some inactive stock—perhaps Denver & Rio Grande—then selling at 9, is about to rise. At his suggestion his customer purchases, let us say, 15,000 shares on a margin of one dollar per share. This done, the proprietor of the “bucket shop” telegraphs to a broker to “sell 3,000 D. & R. G.—quick, quick,” in blocks from 8¾ to 8. The broker who receives the dispatch, either alone or with assistance, offers the stock; the offer is promptly accepted by another broker, to whom the wily manager has telegraphed instructions to buy the stock at the price named. The final quotation, 8, fixes the price, and the sale is promptly reported to the bucket shop by telegraph. The result is that the too trustful customer’s $15,000 advanced as margin, is swept into the coffers of the daring rascal who has perpetrated the fraud, and whose only outlay is the payment of one-fourth of a cent commission on the fictitious sale and purchase.
Let us take another illustration, drawn from a suppositious transaction in wheat. The speculator perceives from the quotations on the blackboard that some future delivery of wheat opened at 86⅛. Every minute or two new quotations are shown on the board, the apparent tendency of the market being upward. He also sees that during the preceding hour the price has been as high as 86⅝, and as low as 86. When it touches 86 again he concludes to buy, guessing that it is likely to rise. Accordingly he purchases 1,000 bushels at that price, advancing ten dollars as a margin. Perhaps the next change is an advance to 86⅛. He might now sell out without loss, as the ⅛ in his favor amounts to exactly the commission charged by the shop. The next quotation is, say 86, and the following one 85⅞. If it should continue to fall until 85⅛ is touched, he is said to be “frozen out,” inasmuch as the decline of ⅞ added to the ⅛ brokerage charged by the proprietor, equals the ten dollars which he has advanced. Perhaps he concludes to “re-margin,” in which case he will put up ten dollars more. Possibly the market may now take an upward turn and rise until 86⅛ is again reached. It is now within his power to close the transaction without loss other than that involved in the payment of the commissions. Let us suppose that he does so. It is quite probable that it will now occur to him that the market is likely again to recede, and he accordingly sells 1,000 bushels at 86⅛, once more advancing ten dollars as a margin. If the price continues to rise until 87 is reached, our venturesome speculator is again frozen out, and is ten dollars lighter in pocket.
The above supposed cases are fair illustrations of the average bucket shop trading. A majority of the patrons of these establishments are “scalpers,” satisfied if they can win five, ten, or twenty dollars, and close observers say that fully seven out of ten guess the market wrong. The shop always makes its regular commission, no matter what may be the result of the transaction. “Puts,” “calls” and “straddles” are also sold at these places, although, of course on a far smaller scale than by members of the regular exchanges.
But bucket shops have other and darker sides. It is by no means uncommon for a manager so to manipulate quotations as to wipe out speculators margins at his own pleasure. Thus, if it is for his interest that a certain stock or commodity should decline, the quotations which he posts upon his blackboard show a fall, without reference to the actual course of the market at the regular exchanges.
Another, and favorite, device of the gentry, by which large sums are often realized, is to “fail.” A considerable amount of money—say $50,000 or $60,000—having been received as margins, and being carried by the house, a plan is formed by which it may be absorbed by the proprietor with but little chance of detection. In order to accomplish this he has resort to the aid of some reputable (?) firm of brokers, who are members in good standing, of some regular exchange. He arranges with them to enter in their books, records of fictitious transactions with him of such a character and to such an amount that he may appear to have lost the money in speculating, for the benefit of his customers, upon ’Change. The obliging firm of brokers receive, for rendering this valuable service, the regular commission of one-eighth of one cent per bushel upon the transactions thus fraudulently entered. It is, in itself, a striking commentary upon the methods and morals of the average commercial exchange of the last quarter of the nineteenth century, that brokers can be found, who, while claiming to be upright, honorable business men, are willing, for so paltry a consideration to outrage integrity, and drag honor in the dust.
Apropos of bucket shops, however, it may be cited as a singular commentary on the sincerity of the instituted condemnation heaped upon them by the Western exchange which resolved to cease its dissemination of “valuable commercial and economic information,” that the same organization has recently adopted a rule reducing the limit of bushels of grain which may be bought and sold upon the floor to one thousand bushels. It would be uncharitable to suppose that the institution in question intended to enter into rivalry with the bucket shops; yet had that been its intention it could scarcely have devised a scheme better calculated to bring about such a result. Men, the scantiness of whose means had forbidden their speculating on the regular exchange, may now gratify their inclinations upon the “floor” with almost the same ease as before the huge blackboard in the bucket shop.
Nor should it be forgotten that there is an aspect in which the great commercial exchanges work more harm to the community at large than do the less reputable concerns which follow at a respectable distance in their wake. A sale or purchase of a large “block” of grain or provisions upon the floor of a regular exchange affects the price of the commodity in every retail market throughout the country, thus working a direct injury to the consumer, who finds himself unable to judge, from one day to another, what will be the cost on the morrow, of the necessaries of life. A transaction involving precisely the same quantity of the same commodity in a bucket shop works no such result. It is the “operators,” whose selfish greed brings about the fluctuations which work such hardships to the poor.
Such is the commercial exchange of to-day, and such the fungus-like excrescence which is its off-shoot. Call these practices which have been here described by what name you will, plain, unvarnished truth stamps them as gambling on a gigantic scale and in one of its deadliest forms. And yet the State holds over them the protecting ægis of the law, and the community at large gives them the moral support of its approving smile. For the avowed professional gambler there is no place in the political edifice. In the eye of society he is a pariah; in that of the law a culprit; in that of the church a moral leper. Yet the heartless operator who deliberates long and earnestly how he may most speedily and surely accomplish the ruin of the man for whom he professes the sincerest friendship; for the selfish speculator who passes toilsome days and sleepless nights in devising schemes for forcing up the price of the necessaries of life; for the far-seeing scoundrel who concocts a cunningly devised scheme for wrecking a railroad in whose stock, it may be, are invested the funds on which the widow and the orphan depend for subsistence—for these men, society has no condemnation, the law no terrors, and the pulpit no denunciation. They build churches and found colleges; they preside at public gatherings and occupy posts of honor upon public committees. It is a trite aphorism that “nothing succeeds like success,” and no more apt illustration of its truth could be given than the adulation bestowed upon men whose fortunes have been cemented by the groans of the unfortunate, and the tears of the widow. Of a truth it is time that society placed the seal of its disapproval upon gambling openly conducted in marble palaces as emphatically as upon the same vice carried on behind darkened windows and barred doors. In this, as in every other great moral reform, much depends upon the attitude and influence of the clergy, who, as a body, have hitherto kept silent as to the crying evil spread out before them.
The idea of the inception of the exchange was grand in its scope. Such organizations have a lofty mission, and it is within their power to encourage commerce, to promote honesty in trade, and to advance the best interests of the State. When an enlightened public sentiment shall compel the elimination from them of those baleful features which have been here portrayed, when the pure gold of legitimate traffic shall have been separated from the dross of illegitimate speculation, when the revival of a healthful moral tone shall have averted the danger which now menaces us, that through the influence and example of the exchange we shall become a nation of gamblers, then no longer shall phantoms haunt the imagination and fallacies pervert the judgment of men; but there shall rise upon the eye of the world the lineaments of a republic far transcending the loftiest conceptions of Plato; a republic of which poets have dreamed and which prophets have foreshadowed; the flowerage of centuries; the bloom and perfume of a Christian civilization.
THE CLOCK.
An offshoot of the mania for gambling in stocks—yet one which is chargeable rather to the bucket shop than to the regular exchange—is known as the “clock.” Of all the multitudinous devices by which swindlers deceive dupes, this is, perhaps the most inherently and transparently absurd. I have fastened its parentage upon the bucket shop for the reason that it is undoubtedly the offspring of the fertile brain of some proprietor of one of these establishments, where rascals grow rich on the gullibility of fools.
The “clock” is a gambling device which can be likened to nothing so aptly as to a “brace” faro box. Both contain cards; in both these, cards are arranged according to the will of the manipulator; in both, the proprietor, or dealer, or other person operating the implement, can determine with tolerable accuracy, whether it is wisest to permit the victim to win or lose.
Yet there are minor points of difference. In the faro box the cards are drawn out through a slit; in the clock they are exposed to view by pulling a string which allows them to fall at the operator’s will. At faro, ordinary playing cards are used; in the case of the clock the cards employed contain the names of stocks—sometimes actual and sometimes fictitious—together with figures which purport to represent values of the stocks named, but which, as a matter of fact, sustain no more intimate relations to actual market quotations than would a map of China to the topography of the moon. The reader who will peruse the description given below will, if he has already had the patience to familiarize himself with the explanation of frauds at faro, recognize the fairness of the comparison above drawn.
The gambling “clock” consists of two parts: a contrivance in which the cards are kept and from which they are dropped, and a sort of dial in which they are exhibited to the interested gaze of the players. Its mechanism appears to be a triumph of the simplicity of invention. The operator sits either directly in front or at some convenient point where he may see the inscriptions on the cards as they fall. From time to time he pulls a string; the card exposed disappears from sight and is replaced by another.
The method of “speculating” (or, as it might more properly be called, betting) is as follows: The player notes the course of some stock—perhaps one called “Jem Dandy”—observing its “rise” or “fall,” as shown by the figures on the cards, and possibly keeping a record of its ostensible “fluctuations,” very much as a faro player records the issuance of cards from the dealing box. Perhaps one of them concludes that some particular “stock” having fallen, as shown by the cards during three or four consecutive exposures, he imagines that the chances are in favor of the next card of the same stock showing an “advance.” Accordingly, he concludes to back his judgment with his money. He does not bet directly, as a faro gamester, for instance, might place a stack of chips upon a queen. He “purchases” a certain number of “shares” of the “stock” in question, advancing the amount which he is willing to risk as a “margin,” precisely as he would were he buying stocks or grain in a bucket shop. His fate is sealed by the appearance of the next card inscribed with the same suit. If “Jem Dandy,” or whatever other stock he may have bought, “goes up” he wins; if it “falls” he loses.
The reader will have no difficulty in perceiving that, as has been intimated, the pretended “sale” was in reality no sale at all, the entire transaction being a wager, pure and simple, on the turn of a particular card. Nor is it difficult to comprehend that a professional gambler can manipulate pre-arranged cards by pulling a string as easily as by using his thumb and forefinger.
The rooms where the “clock” is used are not infrequently infested by confidence men of a peculiar sort. The verdant visitor who appears to be a “soft mark” is often approached by men who tell him that their “wives” are clairvoyants, or trance mediums, who can predict with infallible accuracy, the order in which these cards will leave the receptacle on the ensuing day. For a small consideration—e. g., five dollars—they will impart to him information through the possession of which he may certainly win hundreds, if not thousands. These persons, however, never explain why they should prefer to sacrifice, for such a paltry sum, the knowledge which would enable themselves to accumulate fortunes with a celerity which would cast completely into the shade the rapid mathematical computations of the “lightning calculator.”
It occasionally happens, however, that the proprietor of one of these “clocks” comes to grief through the wiles of a more adroit scoundrel than himself. Within a comparatively short period a manipulator of a machine of this kind in a great western metropolis found his attention diverted from his “clock,” with its attached string, by the progress of a fight in one corner of his room. There appeared to be no doubt as to the genuineness of the combatants’ hostility, the blows were heavy and blood flowed freely. The available force of the place was called into requisition to separate the combatants and restore order. Peace having once more settled down upon the establishment and the brawlers having been ejected, business was resumed. A quiet-looking gentleman, who had recently entered, became deeply interested in the market for “Jem Dandy;” he bought and sold with apparent recklessness, yet—mirabile dictu—he invariably won. He bet largely and won enormously. In consequence the proprietor concluded to abjure “speculation” for the day. In other words, he posted a placard to the effect that holders of contracts might cash their winnings at once, but that the house proposed to suspend further business until the next morning.
Of course the fight was what gamblers term a “stall,” i. e., a trick by which another gang of sharpers might have an opportunity of resorting to the same tactics employed by professionals who travel about the country “snaking” cards. In other words, and plainer English, the “fight,” however seemingly earnest, was in reality a sham. Five sharpers were confederated in the perpetration of the scheme. Three of them engaged in the scrimmage, one of them took advantage of the melee to “ring in a cold deck,” and the other, handsomely dressed and imperturbable of demeanor, quietly saw his confederates “pound” one another, and then quietly bet upon the descent of the cards from a pre- arranged pack which had been substituted in the receptacle for those placed there by the proprietor’s employes.
I hardly know how I could more fittingly close my exposition of gambling than by a description such as that given above. Nothing could more aptly illustrate the remorseless tactics of the professional scoundrel; nothing could better show the gullibility of the dupe; nothing could better exemplify the hollowness of the adage that there is “honor among thieves.”
O, young men of the only republic which has demonstrated its past vitality by the average virtue of its citizens; O, parents, to whose tender care has been committed a charge which God Himself has denominated a sacred trust; O, law-makers, to whose wisdom is entrusted the framing of statutes for the repression of vice and the propagation and perpetuation of public morals—listen to the voice of a penitent who has sounded the utmost depths of degradation. The enlightenment of the intellect, the awakening of the conscience, the conversion of the will—these are the agencies which Divine Providence may employ to avert from the American people the wrath of Him who has said that the casting of the lot is in the hands of the Lord.
“OLD HUTCH.”
No description of the Chicago Board of Trade would be complete which failed to bring out, in bold relief, the figure of the daring speculator whose mysterious movements have long proved an enigma to his fellow members, the sphinx of the chamber, the “king of the wheat pit,” Mr. Benjamin Peters Hutchinson, better known to his friends and to the country at large as “Old Hutch.” The accompanying cut is a good likeness of this remarkable man. Born in New England, he emigrated to the West while a mere youth, and has “grown up” with Chicago. Endowed by nature with indomitable pluck and marvelous energy, he has carved out his own success. He is beyond question the largest operator on the floor of ’Change in the city of his choice, and his ventures are as bold as they are gigantic. In a business enterprise he fears no foe, as he recognizes no friend, and his tall, spare form looms up as a tower of granite in the midst of the turbulent waves of speculation which surge around him.
III. NATURE AND EFFECTS OF GAMING
Gambling holds a high place among the vices of society. It proposes to the young that they secure money without earning it honestly. It thus asks thousands of persons to disregard the noble pursuits and to become gamblers. True manhood is made by the following of an honorable industry. If we contrast Watt, who made the engine, with some gambler, the difference at once appears between the noble callings and the games of chance. The lawyer, the physician, the mechanic, the inventor, the writer can show a reason of existence. With the gambler this is impossible. He has no reason for being in life.
The first evil of gambling is this intellectual loss, incurred by being turned away from all those honorable pursuits which create mental power. Astronomy helped make Newton, art made Angelo, the law helped make Burke and Webster, traffic made Peabody and Peter Cooper, the press made Greeley and Raymond, but gambling will take the best mind the age can produce and degrade it to the level of the brain of a trickster or a thief. There is nothing in gambling except a kind of sneaking hope of a shameful success. It is a contest in which victory is as shameful as defeat.
The professional gambler does not glory in his calling. He does not call a convention for the purpose of conferring with the scientific men of the age; nor does he demand a corner in the world’s “fairs” that he may exhibit his implements and methods. His occupation asks concealment, and thus makes the features of the face carry at last the strange evidences of the hidden art.
The many fashionable people who play cards for a little money extract from the game a little amusement, but a certain per centum of those who thus begin so modestly move on to a financial and mental ruin. The taste for games of chance grows as days pass, and the one who played a little passes on until he plays much. Soon the heart, mind and face are those of the gambler.
The gambling room is based upon fraud. The philosophy is simply that of craft against innocence. It is a well known fact that a large part of the human race is simple-minded. These can be preyed upon by those who have made craft a study. Many persons are weak and innocent enough to be caught in a trap. The professional gambler belongs to a form of humanity which will spend life in betraying persons younger and less suspicious than itself. A large part of the human race possesses innocence enough to enable them to be betrayed. The gambler thus makes his fortune by wrecking the trust men have in each other. He picks the pockets of the simple of heart.
The game of the professional gambler is not one of chance. They cannot afford to use a fair game of chance, because nature would be against them half the time and loss and gain would be equal. All those games played on the railway and in the “den” are the gambler’s own games. They are doctored so as to fall, like loaded dice, in his favor. For the young man to play with a gambler is to be beaten. Fairness is a virtue for which the gambler has no use. If he loved fairness he would work at some trade or turn farmer. Luck may help a man for a day, but it will go over to the other man to-morrow, for it is no respecter of persons. The only help that will stand by a gambler all the year through is fraud.
It is difficult to measure this vice, but it is so great as to merit from all civilized States immediate destruction. Like the opium habit, it must be checked by law. When the police will not enforce an existing law, they cease to be police, because the word “police” implies the care of a city, the study of its welfare. It is a bad condition of wool- growing when wolves are employed to guard sheep.