The Exchange is a great market to which any one can bring his securities, confident that he will here find a buyer who will purchase at some price. The advan tage of this position is well known and highly appre ciated. A man, for example, who owns a piece of real estate and who desires to sell it must first of all make a long and laborious search to find a person who is willing to buy real property. There may be many people who would like to buy real estate but few per haps are interested in property in his locality. When it comes to finding customers who would be interested in his particular property he finds that the number is still further reduced. Finally it is necessary for him to come to an agreement concerning the price. There is no market where he can go and be certain of finding a customer.
In the case of securities, the situation is altogether different. The peculiar advantages or disadvantages. which are inherent in every piece of real estate give to it individual characteristics. Every share of stock.
on the other hand, is like every other share of stock of the same company. Its value is exactly the same. Any one, therefore, who is familiar with the value of the stock of a given corporation and who desires to purchase it cares absolutely nothing about receiving any particular share. The situation in the case of the stock is the same as if every piece of real estate in the same locality were of equal desirability and value. The market for securities, therefore, is much broader than for any other classes of property. No individual search is necessary except for the general purpose of ascertaining the value of any given security. It is possible, therefore, to maintain a market such as the Stock Exchange for the purchase and sale of property where men decide in the fraction of a second to accept or reject the offer as it is made on the floor. This gives the Stock Exchange its great value and com mands for it the enormous volume of business annually transacted.
Now the owner of the security which is not listed on the Exchange finds himself in a position similar to that of the real estate owner. He knows not where
to go to find his market. Many people may be inter ested in his stock, but for him to ascertain their where abouts is difficult, requires much time, expense and above all, causes delay and uncertainty. He feels keenly the need of a market where he can take his stock and where he knows that the prospective buyer of such stock would be making inquiries for it. This is furnished by the Stock Exchange. For this reason it comes about that the securities of most corporations of any considerable size are listed upon one or more exchanges.
7. Value of listing for bank loans.—Listing on the New York Stock Exchange gives a security a wide market and a definite current value, making it easier to sell and always easier to borrow upon. In fact, securities are not generally available as collateral for Stock Exchange loans unless they are listed. Banks accept the quotations on this Exchange as the basis for computing how much they will lend upon given securities; the practice is to value the securities at 10 points below the quotations and lend 80 per cent of such valuation. In advertisements and circulars de scribing securities offered for sale it is always stated as an inducement to purchasers that they are listed on the New York Stock Exchange when such is the case.
The usual method of describing the listing require ments on the Stock Exchange is to give them in detail. But a long list of rules is frequently confusing and meaningless. It seems wiser in the present instance to reprint an actual report which was recently fur nished to the Stock Exchange in compliance with these rules. These publications are furnished to all mem bers and to newspapers. As in the case of many other companies whose securities have been listed, very little of the complete and detailed information that follows was available to investors before the stock was listed. A typical listing on the New York Stock Exchange is here given :