There is no question anywhere that the dealings of a "bucket shop," where market prices are used as a basis for the settlement of differences on so-called purchases and sales and where no delivery is ever made or expected, are gambling; 36 but the bulk of the speculative transactions in the United States is carried on through the machinery of stock and produce Exchanges, by the rules of which an actual delivery of the stock or produce (or of its symbols) is required as between the members of the Exchanges who contract with one another as principals. These contracts made on the Exchanges are, therefore, not within the definition of gambling transactions, and the use of a clearing house where contracts to buy and to sell made by the same broker on the same day may be set off against one another without actual deliveries in so far as the contracts cancel one another, is not objectionable.37 As between the broker and his customer the situation is different. The party called a broker is in reality much more than that. He does not bring his customer in contact with a principal, but contracts on the Exchange himself as a principal. He advances in speculative transactions ordinarily the greater part of the capital needed to finance them on the Exchange. He knows frequently that the customer's resources are insufficient to enable the latter to pay in full either immediately or within any probable time in the future the full cost of the stock or produce purchased on his account, or to furnish the full amount of anything sold "short" for his account. The ordinary method of carrying on the business will, therefore, involve the making of new transactions on the Exchange of the converse kind to those first made, and a settlement of differences between broker and customer. No agreement to this effect is ordinarily made and none is needed, for the Exchanges being in constant operation, the customer always has it in his power to order the settlement of his account by new transactions on the Exchange, and if the customer's margin becomes insufficient, the broker similarly has power to close the account by making the necessary transactions on the Exchange, and applying whatever credit or se-; curities of the customer he may have towards the balance. This being the ordinary situation, two questions arise:

34 Grizewood v. Blane, 11 C. B. 526; Clews v. Jamieson, 182 U. S. 461, 489, 45 L. Ed. 1183, 21 Sup. Ct. 845; Wil-hite v. Houston, 200 Fed. 390, 118 C. C. A. 542; In re Trion Mfg. Co., 214 Fed. 161; Flowers, v. Bush & Witherspoon Co., 254 Fed. 519, 166 C. C. A. 77; Hooper' v. Nuckles (Ala.), 39 So. 711; Johnston v. Miller, 67 Ark. 172, 53 S. W. 1052; Whitehead v. Ballinger, 38 Colo. 66, 88 Pac. 169; Watson v. Haslehurst, 127 Ga. 298, 56 S. E. 459; Robson v. Weil, 142 Ga. 429, 83 S. E. 207; Logan v. Musick, 81 111. 415; Scanlon v. Warren, 169 111. 142, 48 N. E. 410; Vigel v. Gatton, 61 HI. App. 98; Semler Milling Co. v. Fyffe, 127 11I. App. 514; Whiteside v. Hunt, 97 Ind. 191, 49 Am. Rep. 441; Sondheim v. Gilbeit, 117 Ind. 71, 18 N. E. 687, 5 L. R. A. 432, 10 Am. St. Rep. 23; Pearce v. Dill, 149 Ind. 136, 48 N. E. 788; Murray p. Ocheltree, 59 Iowa, 435, 13 N. W. 411; Counsel-man v. Reichert, 103 Iowa, 430, 72 N. W. 490; Sawyer v. Taggsrt, 14 Bush, 727; Rumsey v. Berry, 65 Me. 570, 573; Dillaway v. Alden, 88 Me. 230, 33 Atl.'981; Barnes v. Smith, 159 Mass. 344,34 N.E. 403; Davy v. Bangs, 174 Mass. 238, 54 N. E. 536; Gibney v. Olivette, 196 Mass. 294, 82 N. E. 41; Gregory v. Wendell, 40 Mich. 432; Donovan v. Daiber, 124 Mich. 49, 82 N. W. 848; Cadwell v. Lean's Est., 169 Mich. 117, 134 N. W. 1110; McCarthy v. Weare Commission Co., 87 Minn. 11,91 N. W. 33; Clay v. Allen, 63 Miss. 426; Cockrell v. Thompson, 85 Mo, 510; Crawford v. Spencer, 92 Mo. 498, 4 S. W. 713, 1 Am. St. Rep. 745; Edwards Brokerage Co. v. Stevenson, 160 Mo. 516, 61 S. W. 617; Deierling v. Sloop, 67 Mo. App. 446 (but see Missouri decisions at end of this note); Rogers v. Marriott, 59 Neb. 759, 82 N. W. 21; Thompson v. Williamson, 67 N. J. Eq. 212, 58 Atl. 602; Amsden v. Jacobs, 75 Hun, 311, ami., without opinion, 148 N. Y. 762, 43 N. E. 985; Zeller v. Leiter, 114 N. Y. App. D. 148, 99 N. Y. S. 624; Bolts v. Mercantile Bank, 170 N. Y. App. D. 879, 156 N. Y. S. 700; Dows v. Glaspel, 4 N. Dak. 251, 60 N. W. 60; MacDonald v. Gessler, 208 Pa. 177, 57 Atl. 361; Winward v. Lincoln, 23 R L 476, 51 Atl. 106, 64 L. R. A. 160; Carson v. Milwaukee Produce Co., 133 Wis. 85; 113 N. W. 393; Kassuba Commission Co. v. Blodgett, 155 Wis. 529, 143 N. W. 1060; Jacobs v. Wisconsin Nat. Ins. Co., 162 Wis. 318,156 N. W. 159. The law of Missouri on this point seems otherwise. The wrongful intention of one party makes the transaction invalid. Wilhite v. Houston, 200 Fed. 390, 118 C. C. A. 542; Medlin Milling Co. v. Moffatt Commission Co., 218 Fed. 686; Connor v. Black, 119 Mo. 126, 24 S. W. 184; Hingston v. Montgomery, 121 Mo. App. 451, 97 S. W. 202; Taylor v. Sebastian, 158 Mo. App. 147, 138 S. W. 549; and so in Tennessee, McGrew v. City Produce Exchange, 85 Tenn. 572, 4 S. W. 38, 4 Am. St. Rep. 771.

35Higgins v. McCrea, 116 U. S. 671, 685, 29 L. Ed. 764, 6 Sup. Ct. 557; Nash Wright Co. v. Wright, 156 111. App. 243.

36 See cases cited in notes to the preceding section.

37 Clews v. Jamieson, 182 U. S. 461, 45 L. Ed. 1183, 21 Sup. Ct. 845; Board of Trade v. Christie, etc., Co., 198 U. S.

236, 49 L. Ed. 1031, 25 Sup. Ct. 637; Cleage v. Laidley, 149 Fed. 346, 79 C. C. A. 284; Dillaway v. Alden, 88 Me. 230, 235,33 Atl. 981.

(1) May the contract between broker and customer be in-valid, though the contracts or sales entered into on the Exchange for the customer's account are valid?

(2) Assuming that the first question is answered in the affirmative, is the contract between broker and customer invalid under such circumstances as are stated above?