THE BOND MARKET
273
the definitive bond certificates are as yet printed. In the latter
case, trading in the Exchange bond market may be conducted
by contracts calling for the ultimate delivery of the bonds
“when, as, and if issued.” Thus a chance is given for public
opinion to express itself as to the price of the new issue, and
according to circumstances the Stock Exchange quotation may
rise above or fall below the price at which the new issue was
offered to the public.*?
The Stock Exchange bond market, by reason of its superior
organization, also acts as a “shock-absorber” to the rest of the
New York bond market, not only when all, but also when indi-
vidual, bond issues become unusually speculative. Sometimes
single bond issues will suddenly acquire hazardous and uncer-
tain qualities, and their primary market will speedily shift from
the outside market to the Stock Exchange market.
Finally, the Stock Exchange bond market offers generally
unequaled facilities to the small, average individual investor.
Due to these facilities, he can review the field of bond invest-
ment intelligently, select the bonds best suited to his investment
needs, and purchase them through a Stock Exchange firm under
standardized regulations especially designed to protect him.
While the small investor may and often does purchase bonds
direct from non-Exchange member dealers, he must select his
seller with much more discretion, since he is not protected by
the intermediary Exchange bond broker. Both the organized
character of the Stock Exchange bond market and the bond
ticker service which it maintains, give him superior assurance
as to the fairness of the prices of his purchases or sales. So
small are the Exchange bond commission rates that endeavors
to “save” them by dealing direct rather than through a broker
are apt to prove costly in the end to the inexperienced bond
Investor.
The ever-present risks and lightning changes of the stock
market, its thrills of optimism, and its fits of utter dejection,
12 See Chapter IV, p. 91
