210 THE WORK OF THE STOCK EXCHANGE 
for other brokers. The name “specialist” is derived from the 
fact that he specializes in the execution of orders in stocks 
located at the same post on the floor. Sometimes, indeed, in an 
unusually active stock with a heavy turnover, he will confine 
his entire attention to dealing in the stock issue of a single 
corporation. 
Tradition has it that the first specialist on the Exchange 
was a member who had been prevented from pursuing an active 
career in the commission business through breaking his leg. 
As a temporary experiment, therefore, he took his seat in the 
midst of the crowd trading in Western Union, then a very 
active stock, and executed orders only in it. Much to his own 
surprise, as well as to that of his associates, he soon found his 
new occupation more profitable than his former one, and even 
after his leg had mended, he continued in it. Other brokers 
followed his example and became specialists—a shift which the 
steadily growing volume of business on the Exchange favored 
—until today over 300 Exchange members can be found con- 
stantly stationed at the various posts, and constituting a vital 
and integral factor in the present-day stock market. Since 
there is probably no class of dealers or brokers within the mem- 
bership of the Stock Exchange concerning which more mis- 
understanding exists, it is of importance that the methods and 
significance of the specialist Be described at some length here. 
Clearance and Trading of the Specialist—Sometimes, as 
in the case of the floor trader, the specialist clears his own pur- 
chases and sales of stocks through some commission house. 
For such service he pays the same sort of fee as the floor trader 
does. On the other hand, the specialist sometimes not only 
performs his own clearance, but also clears for other members 
in return for a clearance fee. On orders of stock which he 
purchases or sells as 3 broker for other members, the specialist, 
as in the case of the two-dollar broker,® receives a commission 
from the broker for whom he executed the order. 
8 See Chapter IIT, p. 83, and Appendix VIIIc.