CONTENTS 
CaaprER IV 
THE DISTRIBUTION OF SECURITIES - 
Listed securities. Basis of corporate security financing. The 
security underwriting business. Function of the security under- 
writer. Allotment of syndicate “participations.” The public 
offering. Distribution following the offering. Further prelimi- 
nary distribution. Part of the Stock Exchange in distributing 
process. Requirements for listing on the Stock Exchange. Regu- 
lations regarding security. certificates. Transfer and registry 
offices. Responsibility of the Stock Exchange. Insistence by the 
Stock Exchange upon publicity. The test of distribution. The 
routine with applications to list. The creation of an active market. 
The question of “scale orders.” Practical power of syndicates in 
the market. The “seasoning” of a new security. Speculative 
maintenance of the floating supply. Striking securities from the 
list. The problem of “corners.” Function of the floating supply. 
Time needed to complete distribution. The example of U. S. 
Steel stocks. The floating supply of commodities. Slowness of 
security distribution. Listed securities always salable. The re- 
ciprocal flow of money into industry. The Stock Exchange as a 
capital market. Pre-war importation of investment funds. The 
new American investing public. The menace of the stock 
swindler. 
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Cuarrer V 
HE DANGERS AND BENEFITS OF STOCK SPECULATION - . 
Attitude of the uninformed. Certain undoubted evils of specula- 
:ion. Definitions. Distinctions between investment and specula- 
tion. Meaning of the term “investment transaction.” Distinction 
between speculation and gambling. Superficial resemblances. 
Gambling forbidden on the Stock Exchange. Economic function 
of speculation. Economic education and progress. Stock specu- 
lation and trade depressions. Absorption of credit. Effect of 
speculation upon prices. Losses from speculative ventures. Spec- 
ulation impossible to “abolish.” Stock Exchange attitude toward 
margins. Inevitable risks of business enterprise. Assumption of 
risk in the modern world. Antiquity’ of speculation. Speculation 
and the growth of America. A socialist’s testimony regarding 
speculation. Speculation a phase of all pioneering. The economic 
value of unsuccessful speculation. Exploration replaced by ex- 
ploitation. Modern civilization built upon risks. Speculation in 
times of calamity. A more recent example. Function of the 
stock speculator. Speculation necessary to improved marketing 
methods. Relation of speculation to organized markets. Adjust- 
ing prices to values. American fondness for new legislation. 
Lesion and economic principles. Education the only genuine 
remedy. 
121 
CuarTER VI 
Typical INVESTMENT TRANSACTION - = . . +. . « . . 157 
Bidding and asking. Market price fluctuations. Work of the 
commission broker. Origin of a selling order. Usefulness of the 
stop-loss order. Forms of limited orders. Transmission of the 
order. In the Wall Street office. Signaling the Exchange 
A