RISE OF THE NEW YORK STOCK EXCHANGE 69 
1864) and the 173 members of the “Government Bond Depart- 
ment” (an organization devoted to dealing in U. S. Govern- 
ment issues), to form the “New York Stock Exchange” with 
a total membership of 1,060. Membership in the new organi- 
zation was temporarily limited to this number, although none 
of the three merged exchanges had previously possessed a fixed 
membership. In 1879 the membership was increased to 1,100 
by the sale of 40 new “seats” to defray expenses in expanding 
the Stock Exchange building southward along Broad Street. 
A membership or “seat” in the New York Stock Exchange 
thus became a species of property owned by the member, and 
if for any reason he sold it, the net proceeds of the sale went 
to him. 
From 1879 to 1929 the membership of the Exchange was 
thus limited to 1,100 members. In the latter year, the growth 
of its business rendered a larger membership desirable.® Ac- 
cordingly, each existing member was given an additional 
quarter-membership (something like a 25% stock dividend) ; 
the 275 new memberships thus created brought the total mem- 
bership up to 1,375. 
Prior to 1869, most administrative measures were sub- 
mitted to the vote of the whole Exchange membership. But 
the larger membership resulting from the merger in that year 
rendered the continuance of this system impossible. Accord- 
ingly, the Constitution of the new Exchange installed a repre- 
sentative system of government by vesting the administrative 
powers of the Exchange in a Governing Committee of 42 
members. More will be said in a later chapter about the 
details of this administrative system.’ 
Public Utility and Industrial Securities—As we ap- 
proach modern times through the prosperous eighties, another 
tendency becomes apparent in the stock market. In the wake 
of the great railroad lines which earlier decades had established 
throughout the United States, there had sprung up new and 
© 7See Appendix Ike.