The work of the Stock Exchange

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Monograph

Identifikator:: 1831284952

URN:: urn:nbn:de:zbw-retromon-225876

Document type:: Monograph

Author:: Meeker, James Edward http://d-nb.info/gnd/126597340

Title:: The work of the Stock Exchange

Edition:: Revised edition

Place of publication:: New York

Publisher:: The Ronald Press Company

Year of publication:: [1930]

Scope:: XVI, 720 Seiten; Illustrationen, Diagramme

Digitisation:: 2022

Collection:: Economics Books

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Document type:: Monograph

Structure type:: Chapter

Title:: Chapter III. The rise of the New York stock exchange

Collection:: Economics Books

RISE OF THE NEW YORK STOCK EXCHANGE 81 was when the only mechanical appliance in the New York stock market was the old buttonwood tree—and some skeptical modern historians have even claimed that this had been previ- ously chopped down in the Revolution by British soldiers, and that only its stump remained when the original securities market congregated nearby it! In all stock exchanges, two chief functions of members are clearly distinguished—brokerage and trading. The broker executes orders to purchase or sell securities simply as an agent for someone else, on a fixed commission. The dealer or trader, on the other hand, has no customers and acts as nobody’s agent but his own—that is to say, he buys and sells securities entirely for himself and “on his own account.” Brokers make their livelihood out of the commissions paid to them by the pur- chasers and sellers whom they represent, but cannot make a profit out of any difference between buying and selling prices. Dealers and traders depend entirely upon profits in trading, and cannot receive commissions. Different stock exchanges regulate the extent to which their members can exercise these two functions in different ways. The Compagnie des Agents de Change—the official brokerage organization in Paris—forbids any of its members on the Paris Bourse to act as dealers at all.’ The Stock Exchange of London divides its membership into brokers and “ jobbers” or dealers, and compels each member to be consistently either the one or the other. The New York Stock Exchange allows a member to act either as a broker or a dealer as he will, as long as he does not attempt to act in both capacities in the same transaction. Each of these systems can no doubt be defended in its own particular milieu, but there is little doubt that the American system is the most flexible and the least artificially constrained. Also, in practice, most members of the New York Stock Exchange tend to specialize in one class of dealing or brokerage through the great difficulty in one person’s ade- © 1 See Appendix VIIIa.

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