The calling out of quotations in a loud voice is forbidden; also advertising which would stimulate stock exchange busi ness. Bankers and brokers are not to forward to their cus tomers regular market reports ; they are empowered, how ever, to reply to requests for information. The punishment for infraction of these rules is to be meted out by the "Board of Elders," who may exclude members till the end of the war, when all these new rules will automatically become void.
3. Paris essence the Paris Bourse is a private monopoly under government control. The brokers are practically government officials, ap pointed thru and under the supervision of the French Department of Finance by the President of the Re public. In some respects it is a primitive institution, without the facility for swift transfer of stocks and the enormous speculation coupled with the utmost publicity of the New York Stock Exchange, or the efficiency and international scope of the London Stock Exchange. But it is far safer than either. Failures rarely take place. The brokers are among the most respected and leading financiers of the Republic.
The Paris Bourse was the result of spontaneous growth and has survived all the political and economic turbulence thru which so many French institutions have passed. Originally merchants had wares to sell and they sold them in markets. At first the bourses were given free play without government control, but there was fleecing and dishonesty. The Mississippi Bubble led to restrictions. It was then decided to turn the business of trading on the Bourse into a monopoly and to hold the traders responsible not only for their individual acts but collectively for all the business transacted. In the period from 1720 to 1750, the Bourse assumed practically the form it has today.
In France there are two distinct kinds of exchanges, stock exchanges (bourses des valeurs) and commer cial exchanges (bourses de commerce). According to this classification the names assigned to operators are agents de change and courtiers en marchandises. It is the first class that interests us at this point, as the Paris Bourse is a "bourse de valeur." 4. Membership and government.—Altho the total of securities listed on the Paris Bourse about equals that in New York and is half that in London, the membership is limited to 70, as compared with 1100 in New York and about 7000 in London.
When a stock broker who is a member of the Bourse wishes to retire, he does not sell his membership but merely disposes of "the right of introduction." The price of the latter fluctuates between $300,000 and $400,000. After the candidate, who must be a French citizen, has satisfied the requirements of the govern ment as to character and fitness, he is nominated and elected as an official of the Department of Finance. In addition to the cost of the membership itself, a deposit of 250,000 francs or $50,000 is required as a security upon which an interest rate of four per cent is paid, and a fee of 120,000 francs ($24,000) is ex acted which goes into the treasury of the Bourse. The combined memberships are now worth about twenty million dollars and there is no doubt that with the lapse of time the membership will become still more valuable. The dean of the Paris stock brokers died in 1913 leaving an estate of $16,000,000.
The government of the Paris Bourse lies in the hands of a Syndical Chamber, consisting of a syndic and eight members chosen from the seventy. This body corresponds to the Board of Governors on the New York Stock Exchange and the Committee on the London Stock Exchange, except that the Syndi cal Chamber is under the control of the Finance Department.
5. Prerogatives of stock brokers.—Members of the Paris Bourse have the following rights and duties: (1) the exclusive right of trading in government bonds, with exceptions shortly to be noted; (2) the exclusive right of trading in negotiable bills of ex change, notes and all instruments of a similar char acter; (3) the exclusive right of making quotations for the securities they deal in with the inclusion of the quotation of metals; (4) the granting of the necessary certificates for the transfer of rentes (French Govern ment bonds) (5) and, with the permission of the courts, the negotiation of loans and the liquidation of securities that have been pledged (6) and, finally, when called upon by the courts, the disposal of the property of minors.