The work of the Stock Exchange

Bibliographic data

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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636 but no serious effort was made until July, 1882. By this time, New York banks had become alarmed at the large totals to which certifica- tion of checks to stock-brokers required by current stock market activ- ity had reached. Accordingly, some system for obviating unnecessary certification became more and more desirable. A new system planned by a Mr. Osterburg was sponsored by several large brokerage houses and embodied in the “New York Stock Clearing House Association”’— an organization entirely independent of the Stock Exchange, capital- ized at $200,000, and to be supported by fees paid by its users. Never- theless only 85 out of the 1,100 Stock Exchange members could be persuaded to employ the new service, and the effort to maintain it was speedily abandoned. The next attempt was made by the Stock Exchange itself, and the ‘Auditing Department of the New York Stock Exchange” was estab- lished in 1885 at 14 Broad Street for the weekly settlement of Ex- change contracts; its employment remained voluntary, however, and was so little resorted to that the effort soon failed. Meanwhile the volume of Stock Exchange sales continued to grow, to cause congestion in member offices, and to put an undue strain on the New York money market. During the whole period of these un- successful attempts to establish a security clearing system in New York, certain Stock Exchange brokerage firms had become accustomed in a limited way to clear contracts for fellow-members on payment of a clearance fee. This practice dates back before 1880, was con- tinuously followed till 1892, and is indeed still in vogue to some extent. The usual charge before 1892 for such service was $1 for each 100 shares both received and delivered, but if stock was carried overnight the charge was $3.12 (or “three and a shilling” as it was called) accompanied by adequate margin. Only minor economies were effected by this practice. In 1888 ag attempt was made to “centralize” this clearing practice by appointing the Manhattan Trust Company as a clearing house under control of a Stock Exchange committee; again ‘his plan was made voluntary for Exchange members, and again ‘nsufficient interest was aroused to lead to success. Thus, for over 30 years every attempt to inaugurate a security clearing system had ended in failure, owing primarily to the disin- clination of Stock Exchange members to expose the facts and figures of their business to the scrutiny of others, and perhaps the additional clerical work entailed. For these reasons, the use of the various clearing systems was never made compulsory by the Exchange for its members, and voluntary systems failed to attract sufficient support to achieve success. APPENDIX

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