(2) All exchange dealings for “the account” in the shares of mining and industrial companies forbidden. (3) An “Exchange Register” was established in which was to be entered the name of every person who wished to engage in exchange transactions for future delivery. Contracts made by two persons entered in the register were declared binding and exempt from the defence of wager. The immediate effect of this law on the German grain market was disastrous. Futures were not suppressed. The grain trade was simply forced by the law to give up the modern machinery that experience had developed, and go back to antiquated forms of dealing. “It was like taking machinery out of a mill,” says Frank Fayant, “and putting manufacture back to hand labor.” As to trading in securities “for the account,” here, too, the law failed utterly. Even the government--at that time most unfriendly to the Exchanges--admitted in its official reports that the law had “proved injurious to the public,” and that “the dangers of speculation have increased.” We have high authority for a detailed examination of the disaster attending this costly experiment in the remarks of Professor Emery, who tells us not merely _how_ the German law failed, but _why_: (1) Fluctuations in prices have been increased rather than diminished. The corrective influence of the bear side of the market having been restricted, the tendency to an inflated bull movement was increased in times of prosperity. This in turn made the danger of radical collapse all the greater in proportion as the bull movement was abnormal. The greater funds needed to carry stocks on a cash basis further increased the danger when collapse was threatened. The result was an increased incentive to reckless speculation and manipulation. Says the report of 1907, “The dangers of speculation have been increased, the power of the market to resist one-sided movements has been weakened, and the possibilities of misusing inside information have been enlarged.” (2) The money market has been increasingly demoralized through the greater fluctuations in demand for funds to carry speculative cash accounts. The New York method is held in abhorrence by German financiers, who attribute to it, in large part, the wild fluctuations in New York call rates, the frequent “money panics” and the tendency to reckless “jobbery.” In proportion as the new Berlin methods approached the cash delivery system of New York, these evils have appeared there.