652 
APPENDIX 
pains to ascertain what proportion of the business transacted on the 
Exchange is furnished by New York City. The only reliable sources 
of information are the books of the commission houses. An investiga- 
tion was made of the transactions on the Exchange for a given day, 
when the sales were 1,500,000 shares. The returns showed that on 
that day 52 per cent of the total transactions on the Exchange appar- 
ently originated in New York City, and 48 per cent in other localities.” 
‘Hughes Commission Report, 1909.) 
CHAPTER XVI 
The Administration of the Stock Exchange 
(XVIa) Stock corporations have always been denied membership, 
not only in the New York Stock Exchange, but also in the Stock Ex- 
change of London and the Paris Bourse. In the German-speaking 
countries, incorporated banks are permitted to engage in business 
on the exchange floor; it should, however, be noted that membership 
in the Berliner Borse or the Wiener Borse does not mean the same 
thing as in the exchanges of the English-speaking countries. 
The prohibition against incorporated members has been due partly 
to the particular evolution of financial methods in this country, and 
partly to fundamental conceptions of the proper status and functions 
of the stock exchange. Undoubtedly it has been felt that the limited 
liability of corporations (as contrasted with the unlimited liability 
of individuals and partnerships) in cases of insolvency, would prove 
a hindrance to free market dealings, and perhaps an incentive to over- 
risky business methods. There is also the feeling in both England and 
this country that it is better both for the stock market and the money 
market to have stock brokemage organized as a specialized business 
separate and distinct from commercial banking. This attitude, from 
the American standpoint, can find adequate justification from the 
example of the Berlin market, whose commission business has been 
largely swallowed up by a few powerful incorporated banking institu- 
tions. In proportion as this development has occurred there, the 
Berlin broker has degenerated into a mere taker and handler of orders 
from these few great banks on the Borse floor. 
This evolution in Berlin has resulted there in an actual “money 
trust,” and prevented the development of a “free and open” market 
of the type maintained by the stock exchanges of New York and 
[.ondon. 
(XVIb) Since membership in the New York Stock Exchange is 
limited. a membership possesses value like a propertv right. The same