Most coming events cast their shadows before, and it is on this that intelligent speculation must be based. The movement of prices in anticipation of such an event is called “discounting,” and this process of discounting is worthy a little careful examination. The first point to be borne in mind is that some events cannot be discounted, even by the supposed omniscience of the great banking interests—which is in point of fact, more than half imaginary. The San Francisco earthquake is the standard example of an event which could not be foreseen and therefore could not be discounted; but an event does not have to be purely an “act of God” to be undiscountable. There can be no question that our great bankers have been as much in the dark in regard to some recent Supreme Court decisions as the smallest “piker” in the customers’ room of an odd-lot brokerage house. If the effect of an event does not make itself felt before the event takes place, it must come after. In all discussion of discounting we must bear this fact in mind in order that our subject may not run away with us. On the other hand an event may sometimes be overdiscounted. If the dividend rate on a stock is to be raised from four to five per cent., earnest bulls, with an eye to their own commitments, may spread rumors of six or seven per cent., so that the actual declaration of five per cent. may be received as disappointing and cause a decline. Generally speaking, every event which is under the control of capitalists associated with the property, or any financial condition which is subject to the management of combined banking interests, is likely to be pretty thoroughly discounted before it occurs. There is never any lack of capital to take advantage of a sure thing, even though it may be known in advance to only a few persons. The extent to which future business conditions are known to “insiders” is, however, usually overestimated. So much depends, especially in America, upon the size of the crops, the temper of the people, and the policies adopted by leading politicians, that the future of business becomes a very complicated problem. No power can drive the American people. Any control over their action has to be exercised by cajolery or by devious and circuitous methods. Moreover, public opinion is becoming more volatile and changeable year by year, owing to the quicker spread of information and the rapid multiplication of the reading public. One can easily imagine that some of our older financiers must be saying to themselves, “If I had only had my present capital in 1870, or else had the conditions of 1870 to work on today!”