As all our resources are locked up in stocks and shares, we are anxious to realize them into solid cash, so that we may thus be able the better to meet any crisis, such as would follow on the outbreak of a war. As the majority of people are seized with the same fear, the same anxiety, and the same desire to save themselves before they are overtaken by the calamity, so all are anxious to sell their securities for cash, and, as buyers are not plentiful, prices fall. Rather than have no money at all, and their nervousness and their fears increasing, they will be glad to sell at a loss, if only they can get some of their money. So they sell at a loss, and the stocks and shares are accordingly taken up by those reflective speculators who make a study of the situation and gauge its possibilities. They may see that the quarrel is not serious enough to lead to any such calamity as war. They know that the statesmen and the nations themselves are averse to war, and that no effort will be spared to adjust the quarrel, or the misunderstanding, in an amicable spirit. They know, too, that the unreflecting will surely sell, and that prices, therefore, will inevitably fall. Thus, this is their great opportunity, and they do not hesitate to seize it. Many of these opportunities have presented themselves during recent years, and the reflecting, therefore, have greatly profited from them. And as many such opportunities will recur from time to time, they would be wise who would learn this lesson from experience.

This is an influence, therefore, that may be studied with profit. It is not so subtle and so deep as the study of individual and collective temperaments, for in affairs of this kind the counsel of reason, and even of wisdom, has a determining voice. Statesmen are not, as a rule, carried away by passion, by impetuous emotion, and though they may have a fear, that fear will be a safeguard, for it will inculcate cautiousness and be a corrective to any unreflecting action. Thus, the effects of that fear are diametrically opposed to the effects of it in individuals, because the latter do not allow it to be governed by reason and prudence. In the counsels of statesmen, however, reason and prudence are listened to, and speculators must therefore gauge from their past knowledge and experience of these statesmen to what degree they are likely to have their actions directed by reason. In proportion, therefore, to our insight into these matters will our success in speculation be, and as, after all, it is not a complex and intricate problem, necessitating laborious study and research, it is open to every man to profit from a study of it.

The value of money ruling in the open market is a further influence upon speculation, for if money is cheap, and is likely to continue cheap for an indefinite period, people will be more inclined to speculate than if it were dear. Cheap money is often evidence of dulness in trade, and when trade is dull and the opportunities for profitable employment of capital are thus limited, the temptation to employ that capital in other directions is more tempting, for no one likes to see capital lie idle for a protracted time. And yet this is an influence that is far from invariable in its effects, for it may be rendered impotent by other influences that negative its power. At the moment of writing money is cheap, both here and on the Continent, though it is scarcer and dearer in New York. And, what is more, it is likely to continue cheap, and though it might be dear in the autumn, owing to our indebtedness to America, it is not a prospect of absolute certainty. Therefore, as far as the cheapness of money is concerned, and its prospective plentifulness, both here and on the Continent - in France especially - there is every inducement to speculate. And yet the Stock Exchange has not been so dull and inactive for many years, whilst the mining market is in a state of stagnation. Why, therefore, does not this cheap money and this slackness of trade have one of its usual influences on the Stock Exchange?

The first and foremost reason is, of course, the continuation of the war in South Africa, and the uncertainty of its date of termination. We are told that the public will not speculate until the war is over, and we have been told this so often by writers in the press that the public have taken it as nothing more or less than a piece of advice, viz., that they must not speculate till the war is over. Anyone would think - that is to say, the ignorant man in the street - that there had been a massed meeting of the public somewhere, and that they had unanimously passed a resolution to the effect that: 'This assembly of public speculators and investors hereby resolves that it will not, individually nor collectively, speculate or invest in mining shares until the conclusion of the present Boer War, and that this assembly further resolves, in the name of the vast community of speculators and investors in this country, to adopt a waiting attitude until that happy time arrives.' There has been no such mass meeting, nor do I believe that there is any conspiracy or collusion or secret compact on the part of the public to carry such an intention into force. No; the public reads that the public do not intend to do so and so, and as the public waits upon the action of the public, and as the public learns the intention of the public from the imaginations of financial writers, it follows that it is these imaginations that largely counteract the influences of cheap money, or any other influences. Professional dealers commence to buy, in order to start the activity, and this the public learn the next morning. But they learn at the same time that they - that is, the public - are taking no hand in it, and as they all conclude that the other fellows are the public, and that they must wait for action on the part of the others, it follows that they are all waiting upon each other, which is truly a comical situation indeed. If one morning the financial papers all combined to say: 'There was a revival in the Kaffir market yesterday, there being a considerable amount of buying on the part of professionals, who thought the time had come when South African shares should be bought.,' etc., and no reference was made to the public, the public would read it, and very likely come to the conclusion that it should buy the shares, too. The public would say to itself, 'I wonder what the public will do,' and perhaps would answer the question by saying, 'It strikes me the public will begin to buy, too, if this is the right time to buy, as the paper seems to think. If it didn't think so it would say so.' So, as great numbers argue in this manner, and act in accordance with the favourable interpretation they put upon the announcement, the public buy the next day. This is duly recorded, and so the public, seeing the public buying, come forward and buy too, and thus the movement spreads.

That the public are unreasoning and foolish is indisputable. They have no individual initiative. They all wait patiently for someone to take the lead, and they all with one accord follow, whether they are led to their destruction or not. It all comes of the public's ignorance, their disinclination to think and reflect. If the public had any sense, for instance, they would see that now, the end of August, is the time to buy South African shares, and not to wait until everyone buys, and thus send up the prices of shares. If the public had the least ability to think and reflect, they would see that the war could not last for ever, that the mines are as safe as though they were in England, and that the gold will ultimately be extracted from them. If the public had any ability to reflect, they would know that South African shares will not remain at their present prices, but that they are bound eventually to appreciate, and in many cases considerably. It would foresee that immediately the war was over everybody would rush to buy, which of itself would enhance prices. But the public will not reflect. They will not see that this is the time to buy and to hold, either for investment or speculation. And, therefore, they are content to watch and wait, letting the golden opportunities slip by, until the boom is started, and. then, as usual, they will be eager to buy at inflated prices, buy the valuable as well as the rubbish, and some people will be ruined. But all hope that it will not be they, but only the other people, to whom they will sell at a profit.

In this chapter I have considered some influences that have a more or less potent sway over the market. There are many others to be noted, which are equally as powerful, and with some of these I will deal in the following chapters.