ADMINISTRATION OF THE STOCK EXCHANGE 437
buttonwood tree, that the American brokerage business in
securities could not otherwise be conducted conservatively and
safely. Without minimum commission rules, brokerage orders
would constantly tend to flow into rash Exchange firms which,
to secure business by cut-rate methods, would assume danger-
ous risks by reason of improperly small margins of profit. Not
only would many disciplinary provisions of the Exchange be
harder to enforce under such circumstances, but the insolvency
of such firms would harm not only themselves and their cus-
tomers, but also more conservative firms which had done busi-
ness with them.
The provision against splitting commissions with non-
members is a unique feature of the New York Stock Exchange
among the leading security markets of the world, yet one for
which in theory if not in practice this Exchange has been
heartily envied by other markets. Not only does it check
“money trust” tendencies in the market arising from the activi-
ties of corporate banks engaging in the commission business,
but it also prevents the formation here of a miscellaneous class
of “business getters” such as may be seen abroad, which is
mostly beyond the control of the exchanges and sometimes
irresponsible and harmful to them. The absence of these
unnecessary middlemen in the New York Stock Exchange
commission business largely accounts for the lower commission
charges to the public here, as compared with those of the for-
eign stock exchanges to their respective clienteles.
Another rule of the Exchange? restricts the advertising of
its members to “a strictly legitimate business character.” Z.
glance at the financial section of any leading metropolitan news-
paper will reveal how thoroughly this regulation is enforced.
Members of the London Stock Exchange are not allowed to
advertise at all, but in the United States such a flat prohibition
would not prove salutary, both because of the more extensive
employment of advertising with us, and because of other even
“4 Constitution (Rules, Chapter VIII, Sec. 1)
