In the Guild Roll of Leicester, under date 1289-90, there is an entry of an order which prohibits any broker or any other stranger approaching the balances in the merchants' houses, except they were buyers or sellers ; and for a fourth breach of this regulation the offender was to be placed under the " ban" of the guild for a year and a day.
The business of a stock-broker is that of buying and selling, for the account of others, stock in the public funds, and shares in the capitals of joint-stock com panies. They are not a corporate body, but belong to a subscription-house, and are admitted by a committee. About one-half of them are sworn brokers. A few years ago the City obtained a verdict in a prosecution of some members of the Stock Exchange for acting as brokers without being duly admitted by the Court of Aldermen. The brokers object to the regulation which requires them to make known the name of the principal for whom they act and prohibits them from dealing themselves ; both of which con ditions are incompatible with the nature of their business. The acts of parliament, by which the proceedings of stock brokers should in certain cases be regu lated (7 Geo. II. c. 8, and 10 Geo. 11. c. 8), have long been dead letters ; more especially the enactment that every bar gam or contract for the purchase and sale of stock which is not made bond fide for that purpose, but is entered into as a speculation upon the fluctuations of the market, is declared void, and all parties in the same are liable to a penalty 5001. for each trans action.
Within the last few years there has been a large increase in the number of share-brokers, not only in London, but in all the large towns, where formerly there were scarcely any persons of this class. They transact business and effect trans fers in canal and railway shares, and in the shares of joint-stock banks, gas, water, and other local works which are estab lished by a numerous body of proprietors. The capital already invested in railways is not less than 80,000,0001., or one-tenth of the national debt, and this large sum is divided into shares of from 251. to 1001. each, which fluctuate in value from day to day, and by the facility with which they may be transferred encourage specu lative purchasers amongst persons of almost every class, from the large capital ist to those who can only raise a sufficient sum to buy a single share. The business of this comparatively new class of brokers is also much increased by the immense number of new railroads projected, of which in 1844 there were above two hundred brought forward, the shares in all of which soon become an object of traffic. It has been said that one hun dred and thirty-one of the railways of 1844 would require capital to the amount of 95,000,0001. The Bankers' Maga
zine' (December, 1844) gives the follow ing as the scale of charges in use among share-brokers : when the purchase-money of the share is Under £5 . . Is. 3d. per share.
„ 20 . . 2 6 „ „ 50 . . 5 0 , 100 . . 10 0 per cent.
There is besides a stamp-duty payable on transfers of railway-shares and in joint-stock companies generally. The stamp-duty is 10s. when the purchase money of the share is under 20/. ; above 20/. and under 50/. it is 11.; and rises by a graduated scale according to the amount of purchase-money.
On completing a transaction in railway or other shares of a joint-stock company, the brokers give a" contract note" to their employers as evidence of the nature of the business done on their account. By 7 & 8 Vict. c. 110, the sale and transfer of railway shares before the "complete registration" of the Railway Company is placed on the same footing as " time bar gains" on the Stock Exchange, and can not be enforced in a court of law. § 26 enacts, " with regard to subscribers and every person entitled or claiming to be entitled to any share in any Joint-Stock Company," formed after 1st November, 1844, that "until such Company shall have obtained a certificate of ' complete registration,' and until such subscriber or person shall have been duly registered as a shareholder" in the office of the London Register, "it shall not be lawful for such person to dispose by sale or mortgage of such share, or of any interest therein,' and all contracts to this effect shall be void, and "every person" enter ing into such contracts shall forfeit not less than 101. All Companies began after the 5th of September, 1844 (the date when the act was passed), are subject to this enactment (§ 60).
It is usual to apply the name of broker to persons who buy and sell second-hand household furniture, although such an occupation does not bear any analogy to brokerage as here described: furniture dealers buy and sell generally on their I own account, and not as agents for others. These persons do indeed some times superadd to their business the ap praising of goods and the sale of them by public auction under warrants of distress for rent, for the performance of which functions they must provide them selves with a licence, and they come under the regulations of an act of parlia ment (57 Geo. III. C. 93). [ArrasisEn.] Custom-house brokers, or, as they are more commonly termed, agents, are li censed by the commissioners of Customs, and no person without such licence can transact business at the Custom-house or in the port of London relative to the es. trance or clearance of ships, &c.
The business of a pawnbroker is alto gether different from that of the com mercial brokers here described. [PAWN BROKER.]