550 
APPENDIX 
concerted action. The whole movement, which has undoubtedly ac- 
complished valuable results already, owes much to Mr. Simmons, who 
not only initiated it but who has subsequently made addresses in many 
parts of the United States and abroad in connection with it. 
(IVb) It must be realized that the American security underwriting 
and flotation business has grown up under sometimes unique economic 
and legal conditions, and that in method and organization it differs 
considerably from the practices of foreign financial centers. In London, 
for example, underwriting and issuing securities are looked upon as 
distinctly separate operations, and frequently a new flotation will be 
underwritten by one firm or group and issued by another. In America, 
it is almost always the same firm or syndicate which underwrites and 
issues. Also, the practice of issuing to secondary “subsyndicates” is 
largely peculiar to this country. 
In general, European underwriting and issuing technique evolved 
during the last century when the leading European countries were 
creditor nations. Our business, however, was inevitably influenced 
by the fact that through the same formative period the United States 
was a debtor nation, where capital was almost regularly more scarce 
than legitimate domestic securities. Thus, the emphasis abroad was 
upon obtaining new securities to issue, while with us it was upon 
obtaining capital. This is perhaps the basic reason why direct security 
selling by bond-salesmen has always been a unique American practice. 
It is interesting to conjecture just what differences to our under- 
writing and issuing practice our present status as a creditor nation 
is likely to produce. It may be that more and more the United States 
will have to adapt its practice to the condition of a regular surplus 
of capital. The description of American security underwriting and 
issuing methods in this chapter must therefore be considered as tradi- 
tional but not necessarily immutable, and notably different from 
orthodox European methods. 
(IVc) The origin of the New York Curb Market is obscure, but 
it first attained permanent size and significance during Civil War 
times. For many years it used to meet in the middle of Broad Street 
a little south of Exchange Place. Being an open-air market, it lacked 
administrative discipline, dependable quotations, or limitations as to 
the character either of its members or of the securities in’ which it 
dealt. Although basically a useful market, it gained a general repu- 
tation of “caveat emptor.” 
In 1921 the leading firms with representatives on the Curb organ- 
ized an association modeled in general after that of the New York