The number of members (1928) is nearly 4,000 and these employ about 2,000 clerks who have the right of entry to the house. The hours of business are nominally from 10.45 A.M. to 4 P.M. No bargains, however, are marked after 3.3o for inclusion in the lists published in the evening of the same day. Late bargains are marked and published the following day. During the war and for some time after, it was compulsory to mark all bargains, but owing to pressure of business, this excellent rule was abolished. Bargains are to-day recorded at the option of dealers or on request by brokers for their clients. During the period of com pulsory marking, the stock exchange had to issue a list of securities which were not included in the official list. This list is known as the supplementary list. Fortunately this continues to be published, though it is not so useful as it might be owing to optional marking. Since the war broke out no sessions have been held on a Saturday, and it seems unlikely that they will ever be resumed unless the public insistently demands it. This is im probable, for the reason that since 1914 Saturday has become to an increasing extent a day of clearing up. The banks have shortened their hours of work on a Saturday by closing at noon instead of at i o'clock, and this would have to be altered before the stock exchange would be justified in opening on a Saturday. The movement towards making Saturday more and more a holi day is the result of the increasing intensity of business. The motor car and the telephone make it possible to transact far more business in a day than was possible 3o years ago, and the hustle of modern business life renders more rest essential. More over, on the stock exchange great improvements in working practices have been introduced in recent years, and the efficiency of dealers' and brokers' staffs is much higher. The volume of work they transact in a day is far larger than before the war, the population of investors having enormously increased. Except in the gilt-edged market, every bargain a broker executes for his client is "for the account," unless otherwise specified. This means that the bargain will be completed—i.e., the stock handed over and paid f or—on the next settling day. The usual period of the account is a fortnight, but there are four 21-day accounts in the course of a year. Settling days are usually fixed for a Thurs day, the passing of tickets—ticket day—takes place on a Tuesday, and making-up day is Monday, prices for the settle ment of current securities being fixed at 11.3o A.M. Brokers on executing an order for a client send to him a contract note which sets forth the details of the transaction, the price obtained or to be paid, the amount of brokers' commission, of stamp and transfer fee, and the amount of the contract stamp. Later, as settlement day approaches, a further note is sent to a client who has bought stock, requesting him to forward the pur chase money. In the case of a speculative transaction the same procedure is adopted, except that the client, if he has bought stock, is required not to pay the total purchase money, but merely the difference between the price which he gave and the price fixed on making-up day if the latter is lower than the former. If, however, the security has risen in price, the client receives a cheque for the difference between the price at which he bought and the making-up price. A rate of interest or con tango, is charged for the facilities of buying and holding stock without paying for it. Contangoes vary in accordance with the current rate of interest. Usually they are higher on the more speculative securities than on the investment type. The rate of a contango is also affected by the state of the "open" account, as it is called, in a particular share.
If there is a large "bull" account—i.e., a large number of speculative purchases for a rise—and dealers are anxious to dis courage further buying, the contango may rise to o% or more. Rates are generally lower on the more active shares and higher on the less active, which means that there are fewer people ready to carry the latter type of share. Shares in which the market is narrow and difficult, cannot be contangoed. Some speculators sell for a fall as well as buy for a rise. Facilities for technically lending shares to speculators who have sold them are also provided, and the rate of interest charged for lending stock is called "backwardation." This varies with the size of the
"bear" account, as a speculative sale is called. If the "bull" account open in a stock is larger than the "bear," there will be a contango rate and no backwardation rate, and vice versa. Since the war the facilities for carrying over bargains from account to account have been greatly reduced, but speculation has not diminished. The speculators have merely changed their methods. The banks, instead of lending money to members of the stock exchange as largely as formerly, for relending to their clients, now lend freely to their own customers on stock exchange collateral. This is a safer method, for a bank rarely allows its client to borrow more than he can repay. Another popular device of speculators is to gamble during one account only. If markets are rising, a speculator will buy at the beginning of an account and sell towards the end, and vice versa. Speculation is cheaper in this form, for by completing his operation in one account, the operator pays only one commission. During one of the periods of stock exchange depression before the war a movement was started and carried to a successful conclusion for fixing a scale of minimum commissions. It was fixed on a generous scale, for after the war little change was made in spite of the great increase in all other prices and costs. The inflation of capital values, of course, helped to swell considerably the volume of business. (C. J. MO New York.—The New York Stock Exchange provides the principal securities market in the United States. It is situated in the financial district of New York, but its business extends to the far reaches of America and to foreign countries.
The New York Stock Exchange traces its beginning to a small group of brokers who, in the 1790's, bought and sold securities under a legendary buttonwood tree in lower Wall Street and who, on May 17, 1792, drew up an agreement prescribing methods of doing business. By 1817, the gradual increase in the volume of trading led to the organization of the "New York Stock Exchange Board." At that time trading was carried on in about 3o stocks. As stated in its present constitution, the objects of the New York Stock Exchange are : "to furnish rooms and other facilities for the convenient transaction of their business by its members; to maintain high standards of commercial honour and integrity among its members; and to promote and inculcate just and equi table principles of trade and business." Legally, the Exchange is a voluntary association ; it has never obtained a charter or as sumed the form of an incorporated body. Its membership is limited to 1,375; and anyone desiring to become a member must purchase a membership (or "seat") from a retiring member or from the estate of a deceased member. A candidate for member ship must also be formally elected by the Committee on Admis sions, after this committee has investigated his previous business career.
The candidate must agree, without qualification, to abide by the constitution and rules of the Exchange, carrying as they do powers of sweeping character over all phases of his business as an Ex change member.
Legislative, administrative and judicial powers are vested in a paid president, a chairman of the board chosen from the mem bers, and a governing committee on which partners of member firms, out-of-town houses, and the public are given representation. Routine and other work of the Exchange is supervised by standing sub-committees; special matters may be dealt with by special com mittees. Certain regular functions of the market have been or ganized, for convenience, in the form of subsidiary corporations, all of the stock of which is held by trustees for the members. Among these are the Stock Clearing Corporation, which handles the work of clearing and settling Exchange contracts, etc. ; the New York Quotation Company, which supervises the distribution by tickers of the quotations collected on the floor of the Exchange ; the New York Stock Exchange Building Company, which holds title to the physical assets of the Exchange; the New York Stock Exchange Safe Deposit Company, which furnishes safe-keeping facilities held by Exchange members.