ADMINISTRATION OF THE STOCK EXCHANGE 459 
wholesale commodity prices, either upwards or downwards— 
and both price movements proceeding from such a cause are 
equally bad. 
Closing Contracts “Under the Rule.”—A further set of 
regulations®® relates to the methods employed in closing con- 
tracts “under the rule.” Such contracts are occasioned when a 
house either announces its insolvency, or fails to make deliv- 
eries of stock or payment for stock by the proper time. The 
member to whom money or securities are due but have not been 
delivered, is permitted to make a new contract involving the 
same transaction in the same security, and substitute it for the 
old contract which has not been fulfilled. Any profit or loss 
occasioned to the member who is forced to make such a second 
contract is credited or charged to the member who has failed 
to keep his contract. Owing to this method of closing contracts 
under the rule, unnecessary delay and risk by the party closing 
the contracts are eliminated. 
Suspension of Trading.—It sometimes becomes necessary 
to halt the trading in securities upon the Exchange, either in a 
single security or in all securities. In the former case of an 
issue security, trading in it may be temporarily suspended, or 
it may be permanently stricken from the list, in the manner 
and for the reasons outlined more fully in a former chapter.” 
But upon two wholly exceptional and extraordinary occasions 
the entire Stock Exchange has failed to open its doors and all 
its operations have ceased.”® This has happened only twice 
since 1792—in the panic of 1873 and at the outbreak of the 
Great War in 1914. So drastic a step has been resorted to 
only in an economic convulsion, when the maintenance of a 
security market beneficial to the public has been rendered an 
impossibility. Needless to say, to close the Stock Exchange 
requires the affirmative vote of the Governing Committee. 
2 See Appendix XVi1. 
# See Chapter IV, p. 16 
B See Chapter III, p. 72