92 
THE WORK OF THE STOCK EXCHANGE 
Further Preliminary Distribution.—Qften this prelimi- 
nary distribution of a new security is not sufficiently stable and 
complete to meet the listing requirements of the Stock Ex- 
change. In consequence, the new issue may undergo a further 
process of distribution on the New York Curb Market. 
Although Stock Exchange houses often have representatives 
there, nevertheless the Curb Market is an organization com- 
pletely separate from the Stock Exchange. 
The chief economic function of the Curb is as a preliminary 
market; frequently it anticipates the termination and even the 
opening of a public offering of new securities, by allowing 
contracts for their purchase and sale to be made “when, as and 
if issued.” 
After a new security has been traded in upon the Curb for a 
period, its distribution may of course undergo further changes. 
The principal sellers there are: (1) members of the syndicate 
or subsyndicate (provided, of course, that their allotments 
have not already been sold out); (2) speculators who pur- 
chased on the public offering ; and (3) speculators who wish to 
resell the securities also purchased there. The principal buyers 
are as before: (1) pure investors, (2) speculative investors, 
and (3) speculators “for the turn.” 
The chances are that a considerable proportion of the new 
issue may still remain in speculative hands. Nevertheless, the 
investment holdings usually tend to increase, provided, of 
course, that the security is of the sort which warrants purchase 
by investors. In this way a more stable and satisfactory pre- 
liminary distribution is attained. This is sometimes as far as 
the matter goes, either because the Stock Exchange authorities 
are unwilling to have the particular security listed on the latter 
market, or because the issuing company does not apply for such 
a listing. 
Part of the Stock Exchange in Distributing Process.— 
Thus far the operation of the underwriting syndicate or sub- 
6 See Appendix IVe.