12. Number of trading members.—The 1,100 mem bers represent between 500 and 600 firms aggregating about 2,000 partners. Rarely more than 500 or 600 brokers are on the floor at any one time. There are several members of the Exchange who have rarely been there. Among the 1,100 members are a great many who never buy or sell for outsiders, and in fact who never themselves buy or sell on the floor. They have become members merely because they realized that membership enables them to buy securities much more cheaply and sell them with more profit than they otherwise could. This is true even when they employ a two-dollar broker. Such men as John D. Rocke feller, J. P. Morgan, George J. Gould, August Bel mont, and other leading financiers, belong to the Ex change partly in order to lend to it their sanction.
13. Government of the Exchange.—The govern ment of the Exchange rests in an all-powerful gov erning committee, composed of the President, the Treasurer and forty members. There are also paid officials, and a secretary and an assistant secretary, who are not members. The assistant secretary is the chief authority on technical details, and both have many important duties. The governing committee is the final authority on nearly all matters; there are, in fact, few instances where such a committee is vested with such practically unlimited jurisdiction. This body resembles the board of directors of a corporation. It has power to appoint all committees and regulate their jurisdiction; it may also try all members for al leged offences and punish them if they are found guilty. It controls the finances of the Exchange, and
since the Exchange is not incorporated, the committee may mete out punishment to offenders without being hindered by court action. It is thus free of all legal embarrassments and technicalities, and can enforce its rulings rigidly. By way of discipline, according to the offense, the committee removes a member's tele phone, suspends him or expels him.
There are some fifteen committees in all, chosen from among the members of the governing commit tee. This organization of the government of the Ex change at first glance seems complicated; in reality it is very simple, considering the magnitude of the busi ness involved, and the complexity of the questions that constantly arise. The Exchange is a wholly self-gov erning body, a fact that is remarkable when one con siders the vastness of the operations conducted there.
There is no necessity of describing the work of all the committees. The Committee on Admissions not only passes on all applications for transfer of seats, but has charge also of the reinstatement of suspended members. While the Governing Committee is ex ceedingly strict about dropping an insolvent member, they often offer opportunity for reinstatement. There are also committees that are concerned respec tively with law, business conduct (the ethics of trans actions), arbitration (disputes), the clearing house, stock list (admission of securities), and many other subjects. The work of the Committee on Stock List concerns matters which require detailed consideration and which will be treated in the next chapter.