Correspondence

Correspondence is the interchange of thought by means of letters.

A large per cent of the world's business is transacted by correspondence, and in these days of rapid transit and cheap transportation friends and relatives become widely scattered and their only means of keeping in touch with one another is through letter writing.

To be able to write a good letter is therefore not only an accomplishment but an important necessity.

It is the opinion of competent judges that a man's habits and qualities as a business man may be fairly estimated from familiarity with his business letters, and his social correspondence is likewise an index to the trend of his thought, and his general character. It is safe to say that the majority do not appreciate the value of the ability to write a good letter.

First in Importance. -- Perhaps the matter of first importance in a letter is the expression of the proper ideas in the proper language.

Next to That an easy, graceful style of writing, with words correctly spelled, and sentences properly punctuated. Improper punctuation often renders the meaning unintelligible or the opposite of what was intended altogether.

Classes of Letters.-- Letters are usually divided into two general classes, Social and Business.

Social Letters are those that grow out of social and personal relations: as, letters of affection, friendship, congratulation, sympathy, introduction, condolence, etc.

Business Letters, as the term implies, are such as are written regarding matters of business of whatever kind.

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The Practice of Short Selling Sometimes Abused.

That the practice of "short selling", though ordinarily legitimate, is sometimes perverted so as to work an injury to the public is shown by the following extract from a message of Governor Sulzer of New York, sent to the Legislature in January, 1913:

"The subject of so-called 'short sales' is one requiring your serious consideration. A contract to sell property which a man does not own at the time, but with which he can provide himself in time for the performance of his contract, is a general transaction in various branches of business.

"The best views seem to be that short selling in and of itself is not wrongful, but the abuse of this practice works injury to the public.

"Your efforts should therefore be to draw a distinction, so that what will be condemned is the perversion of a legitimate form of business to improper ends."

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Gambling on Prices

Gambling on prices is betting on the rise and fall in market prices by means of pretended purchases and sales or pretended employment as a broker or commission merchant to make pretended purchases and sales. In other words, it is using the forms of buying or selling, or the forms of employment to buy and sell, where no real buying or selling or real employment is contemplated, the parties agreeing to settle with each other by the mere payment of differences of the prices of pretended purchases and pretended sales.

Thus is appears that in speculation and in gambling on prices the result depends upon an uncertain future event. The difference is that, in one the parties are engaged in legitimate business beneficial to both of them, while, in the other they are engaged in an idle and useless occupation beneficial only to the party winning and, when carried to excess, injurious to society.

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Selling Produce Short

Selling produce short is selling it for future delivery when the seller does not own the property at the time of the sale, but hopes to be able to buy it at a less price when or before the time for delivery arrives, thus making a profit from a fall in price. The short seller is therefore a speculator.

In a 'short sale' of stock the contract for future delivery employed is a contract of borrowing. The seller does not, at the time of the sale, own any of the stock sold, but he borrows the same amount of stock from one who does own it and delivers the borrowed stock to the purchaser. The seller must return the stock to the lender and for this purpose he must buy it at some future time. He hopes to be able to buy it at less price than he sold it and thus make a profit of the difference between the two prices.

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Abuses of the Stock Exchange.

The distinction between legitimate speculation in "futures" and gambling on prices is not generally understood and, therefore, to many people both are equally objectionable.

The difference between gambling and selling "short" -- the limit of legitimate speculation and futures -- is thus clearly pointed out by Mr. T. Henry Dewey, of the New York Bar, in a booklet he has recently published.


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Bank Loans to Stock Brokers.

"The making of bank loans to stock brokers is bottomed primarily on the confidence which the banker has in the broker as a person, and secondarily on the goodness of the securities offered. The modus operandi is substantially this: The broker, knowing from the clearing sheet of yesterday what payments he has to meet today, obtains from his bank in the morning authority to draw for this aggregate amount at an agreed rate of interest. As his checks come in during the day the bank certifies them and the banker sends to the broker the bank securities whose market value is greater by a certain margin than the amount borrowed.

"These loans are usually payable on call. As National Banks are forbidden by law to certify checks for a sum greater than the drawer of checks has on deposit, the practice in such cases is for the broker to execute a promissory note, which note the banker discounts, putting the proceeds to the credit of the broker, and attaching the security to it as it comes in during the day. While this method exposes the banker to some danger of loss in the interval between the certification of checks and the receipts of the securities, such losses seldom occur. There is an unwritten rule of the stock exchange that the bank must be protected at all hazards, both as a matter of personal honor and because the stock brokerage busines cannot be carried on otherwise."

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Capital

"Capital is the result of saving. If not the parent of civilization, it is the indispensable promoter and handmaid of it, since capital gives mankind the leisure and the means to take new steps forward in solving the problems of human existence. It is desirable that there should be facilities for investing the savings of the people without serious delay. Such facilities promote saving. It is desirable that investments should be convertible into cash without delay. The raison d'etre of a stock exchange is to supply a place where money can be invested quickly and recovered quickly, or investments made upon which the investor can borrow money if he so desires. It is an incidental advantage that the stock exchange informs all investors, and intending investors, daily and without cost to themselves, of the prices at which they can buy or sell the securities on the active list of the exchange. These prices are made by the competition of buyers and sellers in the market, who are acting under the spur of self-interest. There is no other way in which true prices can be made. If the quotations so made are not precisely the truth in every case, they are the nearest approach to it that mankind has yet discovered."

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