Chapter 1

I went to work when I was just out of grammar school. I got a job as quotation-board boy in a stock-brokerage office. I was quick at figures. At school I did three years of arithmetic in one. I was particularly good at mental arithmetic. As quotation-board boy I posted the numbers on the big board in the customers’ room. One of the customers usually sat by the ticker and called out the prices. They couldn’t come too fast for me. I have always remembered figures. No trouble at all.

I started work just after finishing grammar school. I got a job as a quotation-board boy at a stockbroker’s office. I was quick with numbers. At school, I completed three years of arithmetic in one. I was especially good at doing arithmetic in my head. As a quotation-board boy, I posted prices on the big board in the customers’ room. One of the customers usually sat by the stock ticker and called out the prices. No matter how fast the prices came in, I could keep up. I have always remembered numbers. No trouble at all.

There were plenty of other employes in that office. Of course I made friends with the other fellows, but the work I did, if the market was active, kept me too busy from ten A.M. to three P.M. to let me do much talking. I don’t care for it, anyhow, during business hours.

There were plenty of other employees in the office. Of course, I made friends with the other guys. But if the market was active, my work kept me too busy to talk much from 10 a.m. to 3 p.m. I don’t care for talking during business hours anyway.

But a busy market did not keep me from thinking about the work. Those quotations did not represent prices of stocks to me, so many dollars per share. They were numbers. Of course, they meant something. They were always changing. It was all I had to be interested in—the changes. Why did they change? I didn’t know. I didn’t care. I didn’t think about that. I simply saw that they changed. That was all I had to think about five hours every day and two on Saturdays: that they were always changing.

But even when the market was busy, I kept thinking about the work. To me, the quotes did not represent stock prices in dollars per share. They were numbers. Of course, the numbers meant something. They were always changing. The changes were all I had to be interested in. Why did the numbers change? I didn’t know. I didn’t care. I didn’t think about that. I simply saw that the numbers changed. For five hours every day and two on Saturdays, that was all I had to think about: the numbers were always changing.

That is how I first came to be interested in the behaviour of prices. I had a very good memory for figures. I could remember in detail how the prices had acted on the previous day, just before they went up or down. My fondness for mental arithmetic came in very handy.

That’s how I first became interested in how prices move. I had a very good memory for numbers. I could remember exactly how prices had moved the day before, just before they rose or fell. My love of doing arithmetic in my head came in very handy.

I noticed that in advances as well as declines, stock prices were apt to show certain habits, so to speak. There was no end of parallel cases and these made precedents to guide me. I was only fourteen, but after I had taken hundreds of observations in my mind I found myself testing their accuracy, comparing the behaviour of stocks to-day with other days. It was not long before I was anticipating movements in prices. My only guide, as I say, was their past performances. I carried the “dope sheets” in my mind. I looked for stock prices to run on form. I had “clocked” them. You know what I mean.

I noticed that stock prices tended to follow certain patterns, whether they were rising or falling. There were countless similar cases, and these gave me precedents to guide me. I was only fourteen, but after making hundreds of mental observations, I began testing them for accuracy. I compared how stocks behaved today with how they had behaved on other days. Before long, I was anticipating price movements. As I said, my only guide was how stocks had performed in the past. I carried the “dope sheets” in my mind. I expected stock prices to follow their usual patterns. I had “clocked” them. You know what I mean.

You can spot, for instance, where the buying is only a trifle better than the selling. A battle goes on in the stock market and the tape is your telescope. You can depend upon it seven out of ten cases.

For example, you can spot when buying is only slightly stronger than selling. A battle is going on in the stock market, and the ticker tape is your telescope. You can rely on it seven times out of ten.

Another lesson I learned early is that there is nothing new in Wall Street. There can’t be because speculation is as old as the hills. Whatever happens in the stock market to-day has happened before and will happen again. I’ve never forgotten that. I suppose I really manage to remember when and how it happened. The fact that I remember that way is my way of capitalizing experience.

Another lesson I learned early is that there is nothing new on Wall Street. There can’t be, because speculation is as old as the hills. Whatever happens in the stock market today has happened before and will happen again. I’ve never forgotten that. I suppose I really do remember when and how it happened. Remembering that way is how I make use of experience.

I got so interested in my game and so anxious to anticipate advances and declines in all the active stocks that I got a little book. I put down my observations in it. It was not a record of imaginary transactions such as so many people keep merely to make or lose millions of dollars without getting the swelled head or going to the poorhouse. It was rather a sort of record of my hits and misses, and next to the determination of probable movements I was most interested in verifying whether I had observed accurately; in other words, whether I was right.

I became so interested in my game that I wanted to predict rises and falls in all the actively traded stocks. So I got a small notebook and wrote down my observations. It wasn't a record of imaginary trades, like the ones so many people keep. They use those records to make or lose millions without becoming conceited or ending up in the poorhouse. Instead, my notebook was a record of my hits and misses. Besides predicting likely price movements, I was most interested in checking whether I had observed accurately. In other words, I wanted to know whether I was right.

Say that after studying every fluctuation of the day in an active stock I would conclude that it was behaving as it always did before it broke eight or ten points. Well, I would jot down the stock and the price on Monday, and remembering past performances I would write down what it ought to do on Tuesday and Wednesday. Later I would check up with actual transcriptions from the tape.

Say I studied every price change in an actively traded stock during the day. I might conclude that the stock was behaving as it always did before falling eight or ten points. So I would write down the stock and its price on Monday. Based on its past performance, I would note what it should do on Tuesday and Wednesday. Later, I would check my predictions against the actual ticker tape records.

That is how I first came to take an interest in the message of the tape. The fluctuations were from the first associated in my mind with upward or downward movements. Of course there is always a reason for fluctuations, but the tape does not concern itself with the why and wherefore. It doesn’t go into explanations. I didn’t ask the tape why when I was fourteen, and I don’t ask it to-day, at forty. The reason for what a certain stock does to-day may not be known for two or three days, or weeks, or months. But what the dickens does that matter? Your business with the tape is now—not to-morrow. The reason can wait. But you must act instantly or be left. Time and again I see this happen. You’ll remember that Hollow Tube went down three points the other day while the rest of the market rallied sharply. That was the fact. On the following Monday you saw that the directors passed the dividend. That was the reason. They knew what they were going to do, and even if they didn’t sell the stock themselves they at least didn’t buy it. There was no inside buying; no reason why it should not break.

That’s how I first became interested in what the ticker tape had to say. From the start, I thought of the fluctuations as upward or downward movements. Of course, there’s always a reason for fluctuations, but the tape doesn’t concern itself with why they happen. It doesn’t explain anything. I didn’t ask the tape why when I was fourteen, and I don’t ask it now, at forty. The reason a particular stock moves today may not be known for days, weeks, or months. But what the heck does that matter? Your business with the tape is now, not tomorrow. The reason can wait. But you must act instantly or be left behind. I see this happen time and again. You’ll remember that Hollow Tube fell three points the other day while the rest of the market rallied sharply. That was the fact. The following Monday, you saw that the directors had decided not to pay the dividend. That was the reason. They knew what they were going to do. Even if they didn’t sell the stock themselves, at least they didn’t buy it. There was no insider buying and no reason the stock shouldn’t fall.

Well, I kept up my little memorandum book perhaps six months. Instead of leaving for home the moment I was through with my work, I’d jot down the figures I wanted and would study the changes, always looking for the repetitions and parallelisms of behaviour—learning to read the tape, although I was not aware of it at the time.

Well, I kept my little notebook for perhaps six months. Instead of going home as soon as I finished work, I wrote down the figures I wanted. I studied how they changed, always looking for repeated patterns and similarities in their behavior. I was learning to read the stock ticker, though I didn’t realize it at the time.

One day one of the office boys—he was older than I—came to me where I was eating my lunch and asked me on the quiet if I had any money.

One day, one of the office boys came over while I was eating lunch. He was older than I was. He quietly asked if I had any money.

“Why do you want to know?” I said.

“Why do you want to know?” I said.

“Well,” he said, “I’ve got a dandy tip on Burlington. I’m going to play it if I can get somebody to go in with me.”

“Well,” he said, “I’ve got a great tip on Burlington. I’m going to trade on it if I can find someone to join me.”

“How do you mean, play it?” I asked. To me the only people who played or could play tips were the customers—old jiggers with oodles of dough. Why, it cost hundreds, even thousands of dollars, to get into the game. It was like owning your private carriage and having a coachman who wore a silk hat.

“What do you mean, act on the tip?” I asked. As far as I knew, only the customers acted on tips, or could afford to. They were old guys with piles of money. It cost hundreds, even thousands of dollars, to trade stocks. It was like owning a private carriage and having a coachman who wore a silk hat.

“That’s what I mean; play it!” he said. “How much you got?”

“That’s what I mean. Play it!” he said. “How much do you have?”

“How much you need?”

“How much do you need?”

“Well, I can trade in five shares by putting up $5.”

“Well, I can trade five shares by putting up $5.”

“How are you going to play it?”

“How are you going to play it?”

“I’m going to buy all the Burlington the bucket shop will let me carry with the money I give him for margin,” he said. “It’s going up sure. It’s like picking up money. We’ll double ours in a jiffy.”

“I’m going to buy all the Burlington stock the bucket shop will let me carry with the margin money I give him,” he said. “Burlington is sure to go up. It’s like picking up money. We’ll double our money in no time.”

“Hold on!” I said to him, and pulled out my little dope book.

“Hold on!” I said to him, pulling out my little notebook.

I wasn’t interested in doubling my money, but in his saying that Burlington was going up. If it was, my note-book ought to show it. I looked. Sure enough, Burlington, according to my figuring, was acting as it usually did before it went up. I had never bought or sold anything in my life, and I never gambled with the other boys. But all I could see was that this was a grand chance to test the accuracy of my work, of my hobby. It struck me at once that if my dope didn’t work in practice there was nothing in the theory of it to interest anybody. So I gave him all I had, and with our pooled resources he went to one of the near-by bucket shops and bought some Burlington. Two days later we cashed in. I made a profit of $3.12.

I wasn’t interested in doubling my money. I was interested in his saying that Burlington was going up. If it was, my notebook should show it. I checked. Sure enough, by my calculations, Burlington was acting as it usually did before rising. I had never bought or sold anything in my life, and I never gambled with the other boys. But all I could see was a great chance to test the accuracy of my work, my hobby. It struck me right away that if my analysis didn’t work in practice, nobody would be interested in the theory behind it. So I gave him all I had. With our money pooled, he went to a nearby bucket shop and bought some Burlington. Two days later, we cashed in. I made a profit of $3.12.

After that first trade, I got to speculating on my own hook in the bucket shops. I’d go during my lunch hour and buy or sell—it never made any difference to me. I was playing a system and not a favorite stock or backing opinions. All I knew was the arithmetic of it. As a matter of fact, mine was the ideal way to operate in a bucket shop, where all that a trader does is to bet on fluctuations as they are printed by the ticker on the tape.

After that first trade, I started speculating on my own in the bucket shops. I’d go during my lunch hour and buy or sell. It made no difference to me which I did. I was following a system, not playing favorites with a stock or betting on my opinions. All I knew was the math. In fact, my approach was ideal for a bucket shop. All a trader does there is bet on price changes as the ticker prints them on the tape.

It was not long before I was taking much more money out of the bucket shops than I was pulling down from my job in the brokerage office. So I gave up my position. My folks objected, but they couldn’t say much when they saw what I was making. I was only a kid and office-boy wages were not very high. I did mighty well on my own hook.

Before long, I was making much more money at the bucket shops than I earned at my brokerage office job. So I quit. My family objected, but they couldn’t say much when they saw how much I was making. I was just a kid, and office boys weren’t paid much. I did very well on my own.

I was fifteen when I had my first thousand and laid the cash in front of my mother—all made in the bucket shops in a few months, besides what I had taken home. My mother carried on something awful. She wanted me to put it away in the savings bank out of reach of temptation. She said it was more money than she ever heard any boy of fifteen had made, starting with nothing. She didn’t quite believe it was real money. She used to worry and fret about it. But I didn’t think of anything except that I could keep on proving my figuring was right. That’s all the fun there is—being right by using your head. If I was right when I tested my convictions with ten shares I would be ten times more right if I traded in a hundred shares. That is all that having more margin meant to me—I was right more emphatically. More courage? No! No difference! If all I have is ten dollars and I risk it, I am much braver than when I risk a million, if I have another million salted away.

I was fifteen when I made my first thousand dollars and laid the cash in front of my mother. I had made it all in bucket shops in a few months, on top of what I had already brought home. My mother was terribly upset. She wanted me to put the money in a savings bank, out of reach of temptation. She said she had never heard of a fifteen-year-old boy making so much money after starting with nothing. She could hardly believe it was real money. She used to worry and fret about it. But all I could think about was proving again and again that my calculations were right. That’s all the fun there is, being right by using your head. If I was right when I tested my convictions with ten shares, I would be ten times more right trading a hundred shares. That’s all having more margin meant to me. I was right more emphatically. Did it take more courage? No! No difference! If all I have is ten dollars and I risk it, I am much braver than when I risk a million while keeping another million tucked away.

Anyhow, at fifteen I was making a good living out of the stock market. I began in the smaller bucket shops, where the man who traded in twenty shares at a clip was suspected of being John W. Gates in disguise or J. P. Morgan traveling incognito. Bucket shops in those days seldom lay down on their customers. They didn’t have to. There were other ways of parting customers from their money, even when they guessed right. The business was tremendously profitable. When it was conducted legitimately—I mean straight, as far as the bucket shop went—the fluctuations took care of the shoestrings. It doesn’t take much of a reaction to wipe out a margin of only three quarters of a point. Also, no welsher could ever get back in the game. Wouldn’t have any trade.

Anyway, at fifteen, I was making a good living from the stock market. I started in the smaller bucket shops. There, a man trading twenty shares at a time was suspected of being John W. Gates in disguise or J. P. Morgan traveling under a false name. In those days, bucket shops rarely cheated their customers outright. They didn’t have to. There were other ways to separate customers from their money, even when they guessed right. The business was tremendously profitable. When it was run legitimately, I mean honestly, as far as a bucket shop could be honest, price swings took care of customers trading on a shoestring. It doesn’t take much of a price drop to wipe out a margin of only three quarters of a point. Besides, anyone who refused to pay up could never get back into the business. They wouldn’t have any customers.

I didn’t have a following. I kept my business to myself. It was a one-man business, anyhow. It was my head, wasn’t it? Prices either were going the way I doped them out, without any help from friends or partners, or they were going the other way, and nobody could stop them out of kindness to me. I couldn’t see where I needed to tell my business to anybody else. I’ve got friends, of course, but my business has always been the same—a one-man affair. That is why I have always played a lone hand.

I didn’t have a following. I kept my business to myself. It was a one-person business, anyway. I was the one doing the thinking, wasn’t I? Prices either moved the way I expected, without help from friends or partners, or they went the other way. And if prices went the other way, nobody could stop them out of kindness to me. I didn’t see why I needed to tell anyone else about my business. Of course, I have friends, but my business has always been mine alone. That’s why I’ve always worked on my own.

As it was, it didn’t take long for the bucket shops to get sore on me for beating them. I’d walk in and plank down my margin, but they’d look at it without making a move to grab it. They’d tell me there was nothing doing. That was the time they got to calling me the Boy Plunger. I had to be changing brokers all the time, going from one bucket shop to another. It got so that I had to give a fictitious name. I’d begin light, only fifteen or twenty shares. At times, when they got suspicious, I’d lose on purpose at first and then sting them proper. Of course after a while they’d find me too expensive and they’d tell me to take myself and my business elsewhere and not interfere with the owners’ dividends.

As things stood, it didn’t take long for the bucket shops to get angry with me for beating them. I’d walk in and put down my margin, but they’d look at it without reaching for it. They’d tell me they wouldn’t take my business. That was when they started calling me the Boy Plunger. I had to keep changing brokers, going from one bucket shop to another. Eventually, I had to use a fake name. I’d start small, with only fifteen or twenty shares. Sometimes, if they got suspicious, I’d lose on purpose at first and then take them for plenty. Of course, after a while, they’d decide I was costing them too much. They’d tell me to take myself and my business elsewhere and stop interfering with the owners’ dividends.

Once, when the big concern I’d been trading with for months shut down on me I made up my mind to take a little more of their money away from them. That bucket shop had branches all over the city, in hotel lobbies, and in near-by towns. I went to one of the hotel branches and asked the manager a few questions and finally got to trading. But as soon as I played an active stock my especial way he began to get messages from the head office asking who it was that was operating. The manager told me what they asked him and I told him my name was Edward Robinson, of Cambridge. He telephoned the glad news to the big chief. But the other end wanted to know what I looked like. When the manager told me that I said to him, “Tell him I am a short fat man with dark hair and a bushy beard!” But he described me instead, and then he listened and his face got red and he hung up and told me to beat it.

Once, a big firm I’d been trading with for months shut me out. I decided to take a little more of their money. That bucket shop had branches all over the city, in hotel lobbies, and in nearby towns. I went to one of the hotel branches, asked the manager a few questions, and finally started trading. But as soon as I traded an active stock in my own special way, the manager began getting messages from the head office. They wanted to know who was trading. The manager told me what they were asking, and I told him my name was Edward Robinson, of Cambridge. He phoned the good news to the big boss. But the man on the other end wanted to know what I looked like. When the manager told me that, I said, “Tell him I am a short, fat man with dark hair and a bushy beard!” But he described me instead. Then he listened, his face turned red, and he hung up and told me to get out.

“What did they say to you?” I asked him politely.

“What did they say to you?” I asked him politely.

“They said, ‘You blankety-blank fool, didn’t we tell you to take no business from Larry Livingston? And you deliberately let him trim us out of $700!’” He didn’t say what else they told him.

“They said, ‘You damn fool, didn’t we tell you not to take any business from Larry Livingston? And you deliberately let him take $700 from us!’” He didn’t say what else they told him.

I tried the other branches one after another, but they all got to know me, and my money wasn’t any good in any of their offices. I couldn’t even go in to look at the quotations without some of the clerks making cracks at me. I tried to get them to let me trade at long intervals by dividing my visits among them all. But that didn’t work.

I tried the other branches one after another, but they all recognized me and refused to take my money. I couldn’t even go in to check the prices without some of the clerks making jokes at my expense. I tried visiting all the branches in turn, hoping they would let me trade if enough time passed between visits. But that didn’t work.

Finally there was only one left to me and that was the biggest and richest of all—the Cosmopolitan Stock Brokerage Company.

Finally, I had only one left. It was the biggest and richest of all: the Cosmopolitan Stock Brokerage Company.

The Cosmopolitan was rated as A-1 and did an enormous business. It had branches in every manufacturing town in New England. They took my trading all right, and I bought and sold stocks and made and lost money for months, but in the end it happened with them as usual. They didn’t refuse my business point-blank, as the small concerns had. Oh, not because it wasn’t sportsmanship, but because they knew it would give them a black eye to publish the news that they wouldn’t take a fellow’s business just because that fellow happened to make a little money. But they did the next worse thing—that is, they made me put up a three-point margin and compelled me to pay a premium at first of a half point, then a point, and finally, a point and a half. Some handicap, that! How? Easy! Suppose Steel was selling at 90 and you bought it. Your ticket read, normally: “Bot ten Steel at 90⅛.” If you put up a point margin it meant that if it broke 89¼ you were wiped out automatically. In a bucket shop the customer is not importuned for more margin or put to the painful necessity of telling his broker to sell for anything he can get.

The Cosmopolitan was considered first-rate and did a huge business. It had branches in every manufacturing town in New England. The firm accepted my trades, and I bought and sold stocks and made and lost money for months. But in the end, the same thing happened as usual. They didn’t flatly refuse my business, as the smaller firms had. Oh, that wasn’t because refusing me would have been unsportsmanlike. They knew it would look bad if word got out that they had refused someone’s business just because he made a little money. But they did the next worst thing. They made me put up a three-point margin and pay a premium. At first it was half a point, then one point, and finally a point and a half. Some handicap, that! How did it work? Easy! Suppose Steel was selling at 90 and you bought it. Normally, your ticket would read: “Bought ten Steel at 90⅛.” If you put up a one-point margin, you were automatically wiped out if Steel fell below 89¼. In a bucket shop, the customer isn’t pressed to put up more margin. Nor does he have to go through the painful business of telling his broker to sell for whatever he can get.

But when the Cosmopolitan tacked on that premium they were hitting below the belt. It meant that if the price was 90 when I bought, instead of making my ticket: “Bot Steel at 90⅛,” it read: “Bot Steel at 91⅛.” Why, that stock could advance a point and a quarter after I bought it and I’d still be losing money if I closed the trade. And by also insisting that I put up a three-point margin at the very start they reduced my trading capacity by two-thirds. Still, that was the only bucket shop that would take my business at all, and I had to accept their terms or quit trading.

But when the Cosmopolitan added that premium, they were hitting below the belt. If the price was 90 when I bought, my ticket should have read: “Bought Steel at 90⅛.” Instead, it read: “Bought Steel at 91⅛.” Why, the stock could rise a point and a quarter after I bought it, and I’d still lose money if I closed the trade. They also insisted that I put up a three-point margin right from the start. That reduced my trading capacity by two-thirds. Still, the Cosmopolitan was the only bucket shop that would take my business at all. I had to accept their terms or quit trading.

Of course I had my ups and downs, but was a winner on balance. However, the Cosmopolitan people were not satisfied with the awful handicap they had tacked on me, which should have been enough to beat anybody. They tried to double-cross me. They didn’t get me. I escaped because of one of my hunches.

Of course, I had my ups and downs, but I came out ahead overall. Still, the Cosmopolitan people weren’t satisfied with the terrible handicap they had imposed on me. It should have been enough to beat anyone. They tried to double-cross me, but they didn’t get me. I escaped because of one of my hunches.

The Cosmopolitan, as I said, was my last resort. It was the richest bucket shop in New England, and as a rule they put no limit on a trade. I think I was the heaviest individual trader they had—that is, of the steady, every-day customers. They had a fine office and the largest and completest quotation board I have ever seen anywhere. It ran along the whole length of the big room and every imaginable thing was quoted. I mean stocks dealt in on the New York and Boston Stock Exchanges, cotton, wheat, provisions, metals—everything that was bought and sold in New York, Chicago, Boston and Liverpool.

As I said, the Cosmopolitan was my last resort. It was the richest bucket shop in New England, and it usually set no limit on trades. I think I traded more than any of its other regular, everyday customers. It had a fine office and the largest, most complete quotation board I have ever seen anywhere. The board ran the length of the big room and listed prices for everything imaginable. I mean stocks traded on the New York and Boston Stock Exchanges, cotton, wheat, provisions, metals, everything bought and sold in New York, Chicago, Boston and Liverpool.

You know how they traded in bucket shops. You gave your money to a clerk and told him what you wished to buy or sell. He looked at the tape or the quotation board and took the price from there—the last one, of course. He also put down the time on the ticket so that it almost read like a regular broker’s report—that is, that they had bought or sold for you so many shares of such a stock at such a price at such a time on such a day and how much money they received from you. When you wished to close your trade you went to the clerk—the same or another, it depended on the shop—and you told him. He took the last price or if the stock had not been active he waited for the next quotation that came out on the tape. He wrote that price and the time on your ticket, O.K.’d it and gave it back to you, and then you went to the cashier and got whatever cash it called for. Of course, when the market went against you and the price went beyond the limit set by your margin, your trade automatically closed itself and your ticket became one more scrap of paper.

You know how trading worked in bucket shops. You gave your money to a clerk and said what you wanted to buy or sell. The clerk looked at the ticker tape or the quotation board and took the price from there. Of course, it was the latest price. The clerk also wrote the time on the ticket, so it looked almost like a regular broker’s report. It showed how many shares of a stock the shop had bought or sold for you, at what price, and at what time and date. It also showed how much money the shop had received from you. When you wanted to close your trade, you went to a clerk and said so. Depending on the shop, it might be the same clerk or another one. The clerk took the latest price. Or, if the stock had not been actively traded, the clerk waited for the next price to appear on the tape. The clerk wrote that price and the time on your ticket, approved it, and gave it back to you. Then you went to the cashier and got whatever cash the ticket called for. Of course, if the market went against you and the price went beyond the limit set by your margin, your trade closed automatically. Your ticket became just another scrap of paper.

In the humbler bucket shops, where people were allowed to trade in as little as five shares, the tickets were little slips—different colors for buying and selling—and at times, as for instance in boiling bull markets, the shops would be hard hit because all the customers were bulls and happened to be right. Then the bucket shop would deduct both buying and selling commissions and if you bought a stock at 20 the ticket would read 20¼. You thus had only ¾, of a point’s run for your money.

In the more modest bucket shops, people could trade as few as five shares. The tickets were small slips of paper, with different colors for buying and selling. At times, such as during a booming bull market, the shops would take heavy losses. That was because all their customers were betting on prices rising, and they happened to be right. Then the bucket shop would deduct commissions for both buying and selling. If you bought a stock at 20, the ticket would read 20¼. That left you only ¾ of a point’s movement for your money.

But the Cosmopolitan was the finest in New England. It had thousands of patrons and I really think I was the only man they were afraid of. Neither the killing premium nor the three-point margin they made me put up reduced my trading much. I kept on buying and selling as much as they’d let me. I sometimes had a line of 5000 shares.

But the Cosmopolitan was the best in New England. It had thousands of customers, and I really think I was the only man the Cosmopolitan feared. Neither the steep premium nor the three-point margin they made me put up reduced my trading much. I kept buying and selling as much as they would let me. Sometimes I held a position of 5,000 shares.

Well, on the day the thing happened that I am going to tell you, I was short thirty-five hundred shares of Sugar. I had seven big pink tickets for five hundred shares each. The Cosmopolitan used big slips with a blank space on them where they could write down additional margin. Of course, the bucket shops never ask for more margin. The thinner the shoestring the better for them, for their profit lies in your being wiped. In the smaller shops if you wanted to margin your trade still further they’d make out a new ticket, so they could charge you the buying commission and only give you a run of ¾ of a point on each point’s decline, for they figured the selling commission also exactly as if it were a new trade.

Well, on the day this happened, I was short 3,500 shares of Sugar. I had seven big pink tickets for 500 shares each. The Cosmopolitan used large slips with space to record additional margin. Of course, bucket shops never ask for more margin. The less money you put up, the better for them, because they profit when you’re wiped out. In the smaller shops, if you wanted to add more margin to your trade, they’d issue a new ticket. That let them charge you a buying commission. It also meant they’d give you only ¾ of a point for each point the price fell. They calculated the selling commission too, exactly as if it were a new trade.

Well, this day I remember I had up over $10,000 in margins.

Well, I remember that on this day, I had put up over $10,000 in margin.

I was only twenty when I first accumulated ten thousand dollars in cash. And you ought to have heard my mother. You’d have thought that ten thousand dollars in cash was more than anybody carried around except old John D., and she used to tell me to be satisfied and go into some regular business. I had a hard time convincing her that I was not gambling, but making money by figuring. But all she could see was that ten thousand dollars was a lot of money and all I could see was more margin.

I was only twenty when I first saved up ten thousand dollars in cash. And you should have heard my mother. You’d have thought nobody but old John D. carried that much cash. She used to tell me to be satisfied and go into a regular business. I had a hard time convincing her that I wasn’t gambling, but making money by calculating. But all she could see was that ten thousand dollars was a lot of money. All I could see was more margin.

I had put out my 3500 shares of Sugar at 105¼. There was another fellow in the room, Henry Williams, who was short 2500 shares. I used to sit by the ticker and call out the quotations for the board boy. The price behaved as I thought it would. It promptly went down a couple of points and paused a little to get its breath before taking another dip. The general market was pretty soft and everything looked promising. Then all of a sudden I didn’t like the way Sugar was doing its hesitating. I began to feel uncomfortable. I thought I ought to get out of the market. Then it sold at 103—that was low for the day—but instead of feeling more confident I felt more uncertain. I knew something was wrong somewhere, but I couldn’t spot it exactly. But if something was coming and I didn’t know where from, I couldn’t be on my guard against it. That being the case I’d better be out of the market.

I had sold 3,500 shares of Sugar short at 105¼. Another fellow in the room, Henry Williams, was short 2,500 shares. I used to sit by the ticker and call out the prices to the board boy. Sugar's price behaved as I thought it would. It quickly dropped a couple of points and paused to catch its breath before taking another dip. The overall market was weak, and everything looked promising. Then, all of a sudden, I didn't like the way Sugar was hesitating. I began to feel uncomfortable. I thought I ought to get out of the market. Then Sugar sold at 103, its low for the day. But instead of feeling more confident, I felt more uncertain. I knew something was wrong somewhere, but I couldn't pinpoint it. And if something was coming and I didn't know where it was coming from, I couldn't guard against it. So I'd better be out of the market.

You know, I don’t do things blindly. I don’t like to. I never did. Even as a kid I had to know why I should do certain things. But this time I had no definite reason to give to myself, and yet I was so uncomfortable that I couldn’t stand it. I called to a fellow I knew, Dave Wyman, and said to him: “Dave, you take my place here. I want you to do something for me. Wait a little before you call out the next price of Sugar, will you?”

You know, I don’t do things blindly. I don’t like to. I never have. Even as a kid, I had to know why I should do certain things. But this time, I had no clear reason I could give myself. Still, I was so uncomfortable that I couldn’t stand it. I called to someone I knew, Dave Wyman, and said: “Dave, take my place here. I want you to do something for me. Wait a little before you call out the next price of Sugar, will you?”

He said he would, and I got up and gave him my place by the ticker so he could call out the prices for the boy. I took my seven Sugar tickets out of my pocket and walked over to the counter, to where the clerk was who marked the tickets when you closed your trades. But I didn’t really know why I should get out of the market, so I just stood there, leaning against the counter, my tickets in my hand so that the clerk couldn’t see them. Pretty soon I heard the clicking of a telegraph instrument and I saw Tom Burnham, the clerk, turn his head quickly and listen. Then I felt that something crooked was hatching, and I decided not to wait any longer. Just then Dave Wyman by the ticker, began: “Su—” and quick as a flash I slapped my tickets on the counter in front of the clerk and yelled, “Close Sugar!” before Dave had finished calling the price. So, of course, the house had to close my Sugar at the last quotation. What Dave called turned out to be 103 again.

He said he would, so I got up and gave him my place by the ticker. That way, he could call out the prices for the boy. I took my seven Sugar tickets out of my pocket and walked over to the counter. The clerk there marked the tickets when you closed your trades. But I didn’t really know why I should get out of the market. So I just stood there, leaning against the counter, holding my tickets where the clerk couldn’t see them. Soon I heard a telegraph instrument clicking. I saw Tom Burnham, the clerk, turn his head quickly and listen. Then I felt that something crooked was being planned, and I decided not to wait any longer. Just then Dave Wyman, who was by the ticker, began: “Su—” Quick as a flash, I slapped my tickets on the counter in front of the clerk. I yelled, “Close Sugar!” before Dave had finished calling the price. So, of course, the house had to close my Sugar trades at the last quoted price. The price Dave called turned out to be 103 again.

According to my dope Sugar should have broken 103 by now. The engine wasn’t hitting right. I had the feeling that there was a trap in the neighbourhood. At all events, the telegraph instrument was now going like mad and I noticed that Tom Burnham, the clerk, had left my tickets unmarked where I laid them, and was listening to the clicking as if he were waiting for something. So I yelled at him: “Hey, Tom, what in hell are you waiting for? Mark the price on these tickets—103! Get a gait on!”

By my own figuring, Sugar should have dropped below 103 by now. The engine wasn’t firing right. I had a feeling there was a trap somewhere nearby. In any case, the telegraph instrument was now clicking like mad. I noticed that Tom Burnham, the clerk, had left my tickets unmarked where I had put them. He was listening to the clicking as if he were waiting for something. So I yelled at him: “Hey, Tom, what the hell are you waiting for? Mark the price on these tickets: 103! Get a move on!”

Everybody in the room heard me and began to look toward us and ask what was the trouble, for, you see, while the Cosmopolitan had never laid down, there was no telling, and a run on a bucket shop can start like a run on a bank. If one customer gets suspicious the others follow suit. So Tom looked sulky, but came over and marked my tickets “Closed at 103” and shoved the seven of them over toward me. He sure had a sour face.

Everybody in the room heard me, looked our way, and started asking what the trouble was. You see, the Cosmopolitan had never failed to pay, but you never knew. A run on a bucket shop can start just like a run on a bank. If one customer gets suspicious, the others follow. So Tom looked sulky, but he came over and marked my tickets “Closed at 103”. Then he shoved all seven tickets toward me. He sure looked sour.

Say, the distance from Tom’s place to the cashier’s cage wasn’t over eight feet. But I hadn’t got to the cashier to get my money when Dave Wyman by the ticker yelled excitedly: “Gosh! Sugar, 108!” But it was too late; so I just laughed and called over to Tom, “It didn’t work that time, did it, old boy?”

Tom’s place was no more than eight feet from the cashier’s cage. But before I reached the cashier to collect my money, Dave Wyman yelled excitedly from beside the stock ticker: “Gosh! Sugar, 108!” But it was too late. So I just laughed and called over to Tom, “It didn’t work that time, did it, old boy?”

Of course, it was a put-up job. Henry Williams and I together were short six thousand shares of Sugar. That bucket shop had my margin and Henry’s, and there may have been a lot of other Sugar shorts in the office; possibly eight or ten thousand shares in all. Suppose they had $20,000 in Sugar margins. That was enough to pay the shop to thimblerig the market on the New York Stock Exchange and wipe us out. In the old days whenever a bucket shop found itself loaded with too many bulls on a certain stock it was a common practice to get some broker to wash down the price of that particular stock far enough to wipe out all the customers that were long of it. This seldom cost the bucket shop more than a couple of points on a few hundred shares, and they made thousands of dollars.

Of course, it was a setup. Henry Williams and I had sold a total of six thousand shares of Sugar short. The bucket shop held the margin money from both of us. Other customers in the shop may have been short on Sugar too, possibly bringing the total to eight or ten thousand shares. Suppose the shop held $20,000 in Sugar margins. That was enough to make it worthwhile for the shop to rig the market on the New York Stock Exchange and wipe us out. In the old days, a bucket shop might find itself with too many bulls betting on a stock to rise. When that happened, it was common practice to get a broker to drive down the stock’s price. The broker would drive it down far enough to wipe out all the customers who were long on it. This seldom cost the bucket shop more than a couple of points on a few hundred shares, and the shop made thousands of dollars.

That was what the Cosmopolitan did to get me and Henry Williams and the other Sugar shorts. Their brokers in New York ran up the price to 108. Of course it fell right back, but Henry and a lot of others were wiped out. Whenever there was an unexplained sharp drop which was followed by instant recovery, the newspapers in those days used to call it a bucket-shop drive.

That was how the Cosmopolitan got me, Henry Williams, and the other Sugar shorts. Its brokers in New York pushed the price up to 108. Of course, the price fell right back, but Henry and many others were wiped out. In those days, whenever a price dropped sharply for no clear reason and recovered immediately, newspapers called it a bucket-shop drive.

And the funniest thing was that not later than ten days after the Cosmopolitan people tried to double-cross me a New York operator did them out of over seventy thousand dollars. This man, who was quite a market factor in his day and a member of the New York Stock Exchange, made a great name for himself as a bear during the Bryan panic of ’96. He was forever running up against Stock Exchange rules that kept him from carrying out some of his plans at the expense of his fellow members. One day he figured that there would be no complaints from either the Exchange or the police authorities if he took from the bucket shops of the land some of their ill-gotten gains. In the instance I speak of he sent thirty-five men to act as customers. They went to the main office and to the bigger branches. On a certain day at a fixed hour the agents all bought as much of a certain stock as the managers would let them. They had instructions to sneak out at a certain profit. Of course what he did was to distribute bull tips on that stock among his cronies and then he went in to the floor of the Stock Exchange and bid up the price, helped by the room traders, who thought he was a good sport. Being careful to pick out the right stock for that work, there was no trouble in putting up the price three or four points. His agents at the bucket shops cashed in as prearranged.

The funniest thing was that within ten days after the Cosmopolitan people tried to double-cross me, a New York operator cheated them out of more than seventy thousand dollars. He was a major force in the market in his day and a member of the New York Stock Exchange. He had made a great name for himself as a bear during the Bryan panic of ’96. He was always running up against Exchange rules that stopped him from carrying out plans at his fellow members’ expense. One day he figured that neither the Exchange nor the police would complain if he took some of the bucket shops’ ill-gotten gains. In the case I’m talking about, he sent thirty-five men to pose as customers. They went to the main office and the larger branches. On a certain day, at a set hour, the agents all bought as much of a certain stock as the managers would allow. They had instructions to slip out once they had made a certain profit. Of course, the operator spread tips among his friends that the stock would rise. Then he went onto the floor of the Stock Exchange and bid up the price. The floor traders helped him because they thought he was a good sport. He had been careful to pick the right stock, so he had no trouble raising its price three or four points. His agents at the bucket shops cashed in as planned.

A fellow told me the originator cleaned up seventy thousand dollars net, and his agents made their expenses and their pay besides. He played that game several times all over the country, punishing the bigger bucket shops of New York, Boston, Philadelphia, Chicago, Cincinnati and St. Louis. One of his favorite stocks was Western Union, because it was so easy to move a semiactive stock like that a few points up or down. His agents bought it at a certain figure, sold at two points profit, went short and took three points more. By the way, I read the other day that that man died, poor and obscure. If he had died in 1896 he would have got at least a column on the first page of every New York paper. As it was he got two lines on the fifth.

A fellow told me the man who came up with the scheme made a net profit of seventy thousand dollars. His agents covered their expenses and got paid too. He played that game several times across the country, hitting the bigger bucket shops in New York, Boston, Philadelphia, Chicago, Cincinnati and St. Louis. One of his favorite stocks was Western Union. A moderately active stock like that was easy to move up or down a few points. His agents bought it at a set price, sold it for a two-point profit, then sold it short and made three more points. By the way, I read the other day that the man died poor and unknown. If he had died in 1896, he would have gotten at least a column on the front page of every New York paper. Instead, he got two lines on page five.