5Q0

APPENDIX

ments for either loans or customers’ accounts. No inflexible law can,
in this regard, ever prove an effectual substitute for wise and experienced
 administration.”

(Vd) “Both the writer and the reformer must reckon more than
they have done with the fact that speculation in the last half-century
has developed as a natural economic institution in response to the new
conditions of industry and commerce. It is the result of steam transportation
 and the telegraph on the one hand, and of vast industrial
undertakings on the other. The attitude of those who would try to
crush it out by legislation, without disturbing any other economic
conditions, is entirely unreasonable.” (H. C. Emery—“Speculation
on the Stock and Produce Exchanges of the United States,” p. 9.)

CHAPTER VI

A Typical Investment Transaction

(VIa) In case, however, one buying member had simply cried,
“Take it,” while another buyer had simultaneously made a definite
bid for the stock by saying “(I'll give) 150 for a hundred (shares),”
it is a rule of the Stock Exchange that the latter, because he is an
actual bidder, shall have the preference and get the selling member's
stock. Similarly, after—say—50 has been bid for a stock, if simultaneously
 one seller cries, “Sold,” while another says “(I'll) sell a
hundred (shares) for 50,” the latter member offering the stock is
accorded the sale.

(VIb) In 1929, the increase of the Stock Exchange membership
brought upon the floor a considerable number of new members some
of whom were inexperienced in the technique of floor dealings. To
inform them in this regard, and also to settle occasional disputed
points between the older members, a Special Committee of the Exchange
 after considerable effort codified the practice of the Stock
Exchange floor on numerous moot points of dealing, and this code
was subsequently published in pamphlet form by the Committee of
Arrangements. So essential is this material to a complete grasp of
Stock Exchange practice, that it is reproduced in full in this Appendix.
Dealings in Securities

Bins AND OFFERS
Precedence on the Floor. The first bid or offer, at a price for one or
more units of trading, entitles the maker to the floor; a sale removes bids
and offers from the floor in that classification only (regular way, cash,