EXCHANGE.
By the statutes 8 and 9 W. III. c. 20, and 6 Ann. c. 16, exchange brokers are to be licensed in London, by the lord mayor and aldermen, who administer to them an oath, and take bond for the faithful execution of their offices. Persons acting as brokers, without being thus regularly licensed and admitted, are liable in a forfei ture of 500/.; and those who employ them forfeit 501. The same is the case at Bristol, by statute 3d Geo. II. c. 31. Brokers must register contracts, &c. under the like penalty ; and they are not allowed to deal for them selves, on pain of forfeiting 2001. They are also appoint ed to carry about with them a silver medal, bearing the king's arms, and the arms of the city, &c. and to pay 40 shillings yearly to the chamber of the city.
Insurance brokers, are agents who transact the busi ness of insurance between the merchant or party insured, and the underwriters or insurers. (See INsunitsieE.) This being an employment of great trust, insurance brokers ought to be, and indeed generally are, persons of respectability and honour, in whom unlimited confi dence can he reposed.
It is generally understood, although the point has never been settled by any judicial decision, that, by the usage of trade in London, the underwriters give credit only to the broker for their premiums, and can resort only to him for payment : and that, on the other hand, he alone, and not the underwriters, can recover the pre miums from the insured. An open account is therefore usually kept between the broker and every underwriter with whom he has much dealing, in which the broker makes himself debtor to the underwriter for all premi ums, and takes credit for all losses to which the under writer is liable, and which the broker is authorised to re ceive. Such losses, however, are not to be regarded as a debt from the underwriter to the broker.
In the case of the bankruptcy of a policy broker, the court of King's Bench (23d George III.) held, that though credit for the premiums must be given to the broker, be cause the underwriters know nothing of the principals ; yet that they could not set off the losses, or returns of premium due to the principals, and which they only could sue for, against a debt due from the defendants to the bankrupt. In this case, it may be observed, the de fendants had no commission del credere. In a subsequent case, where the action was brought by the assignees of an underwriter against the factor, it was determined (26th George III.) that the defendant might set off losses
upon policies subscribed by the bankrupt, and due to the defendant's correspondents ; but there the defendant had a commission del credere ; which, Lord Mansfield said, made him liable to his correspondents for losses" without first bringing an action on the policy against the underwriter.
The various duties and obligations incumbent on those exercising the office of an agent or broker, arc similar to those which exist, in general, in cases of express or implied undertaking, and are treated of at large in the different works on insurance. See Marshall on Insu rance, vol. i.; also the articles INSURANCE and POLICY.
Stock brokers, are persons employed to buy and sell shares of the joint stock of any company or corporation, .or in the public funds. The business of these brokers is regulated by the statutes, 6th George I. c. 18., and 7th and 10th George II. c. 8. See STOCKS and STOCK JOBBING.
Pawn brokers, called also pawn takers, tally-men, fri pers, or friflerer8, are persons who keep shops, and lend out money to necessitous people, generally at an exor bitant rate of profit.
By stat. 25th George III, c. 48, pawn-brokers are re quired to take out an annual licence on a 101. stamp, within the bills of mortality, and 51. in any other part of the kingdom, for each shop kept, under a penalty of 501. By 29th George III. cap. 57, confirmed by 31st George III. c. 52., and 33d George 11 i. c. 53., the following rates of profit are allowed to pawn-brokers for interest and warehouse-room : For every pledge upon which there has not been lent above 2s. 6d., one half-penny per month ; for 5s. one penny ; for 78. 6d. one penny half penny ; for 108. two-peLee ; and so on progressively, at a proportional rate, for any sum not exceeding 40s.; and for any sum exceeding 40s. and not exceeding I 0/., at the rate of 3d. per 20s., and so in proportion for any frac tional sum. A party may redeem pawned goods within seven days after the expiration of any month, without paying any thing for the seven days ; after seven and within sixteen clays, he pays interest for one month and a half; hut after the first fourteen days, the pawn-broker may take for the whole month.