FROM A SOCIAL POINT OF VIEW
Other publications besides those mentioned in a previous chapter
frequently emanate from the Stock Exchange, but these are not, as a
rule, of an official character, nor even of a business character. The
members at times lay down their dealing books and pencils to turn to
literature of a more generally popular order. They have produced many a
book, mainly in the cause of charity. Such, for instance, is "The House
Annual," recently inaugurated. This is a sumptuously produced volume of
light stories, sketches, and articles, handsomely illustrated. It is
edited by a member of the Stock Exchange, and many of the contributions
are made by members, although its tasteful pages are not closed against
the work of eminent writers and artists outside the House. It is sold in
the Stock Exchange at Christmas time to provide poor children with
dinners. A most remarkable volume, or rather, couple of volumes,
produced entirely by members of the Stock Exchange unassisted, issued
for the same branch of charity, were entitled "The House on Sport." The
first contained articles on home sports, all written by members of the
Stock Exchange, and yet all written by authorities who would be
acknowledged as such throughout the world. Cricket by Mr. Gregor
MacGregor, boxing by Mr. B. J. Angle, golf by Mr. Mure Fergusson,
cycling by Mr. George Lacy Hillier, rowing by Mr. F. I. Pitman and Mr.
S. D. Muttlebury, sculling by Mr. Guy Nickalls, and so on with no fewer
than forty branches of sport. Such a volume might have been considered
sufficient to indicate the sporting proclivities of the Stock Exchange,
but it was followed a year afterwards by another compiled in the same
way with the same objects, containing articles on sport abroad--lion,
elephant, and rhinoceros shooting, big horn hunting in the Canadian
Rockies, wild sheep hunting on the borders of the Sahara--all the
articles contributed from personal experience by members of the Stock
Exchange.
The institution undoubtedly possesses the distinction of being the most
athletic body of business men in the whole world--when it walks it sets
the world a-walking. It holds its own small race meeting every year,
furnishes county cricket captains, international football players, and
so on.
It is doubtful, however, whether the members enjoy these organised forms
of sport more than they enjoy the impromptu games within the walls of
the House itself on slack afternoons, with all the practical jokes which
are found for idle hands to do. Cricket with walking-sticks and paper
balls, football with a tall hat, a lighted newspaper under the seat of a
dozing jobber, sweepstakes and raffles, a labelled back--all these
things are common enough. Sometimes the spirit of play is closely linked
with the spirit of business; when, for instance, a susceptible member is
induced by his conspiring friends to deal in Chartered Second
Debentures, or some other stock which does not exist, only to find, when
he has made something like a fortune or half ruined himself, that all
bargains are of necessity off. The Stock Exchange has many fixed
holidays during the year--they include not only all the Bank Holidays,
but also the first days of January, May, and November--and some unfixed
holidays on summer Saturdays, but the members do not await official
leave to play.
The institution has its own Orchestral and Choral Society of about 200
members, which has been established twenty years, gives a series of
subscription concerts each season, and is quite an acknowledged factor
in the musical world. There is an Art Society, also a Christian
Association, with a roll of members comprising some 250 names; and in
the Christian attribute of charity the members of the Stock Exchange as
a body are ever to the fore. Beginning at home, there is a Benevolent
Fund as old as the Stock Exchange itself, for the benefit of members who
fall upon troublous times. It has a capital of nearly a quarter of a
million sterling, and an annual income which, although it varies in
accordance with the prosperity of the times, has recently been over
£20,000. There is also a Stock Exchange Clerks' Provident Fund that has
been in existence about forty years, its income of about £2,000 a year
comprising the subscriptions of those clerks who are members of the
fund, and donations and subscriptions by members of the Stock Exchange.
There are about 1,500 members, and grants are made from the fund in
out-of-employment cases, in cases of illness and of death, and when
there are any special calls.
But the charity of the Stock Exchange by no means ends at home. To use
words recently written by a Lord Mayor of London, "the spirit of loyalty
and patriotism which has ever characterised the members of the House is
especially exhibited in practical and overflowing sympathy in times of
distress and anxiety." Those words were written in acknowledgment of the
receipt of a sum of nearly £35,000, which the members of the Stock
Exchange had subscribed to the Mansion House Fund for the relief of the
widows and orphans and other sufferers by the Transvaal War. They had
subscribed over £20,000 to the Transvaal Refugees' Fund, and gave not
only of their money but of their blood in the cause. One member returned
from the field with the Victoria Cross. The Stock Exchange supports its
own hospital wards, its own lifeboats, its boys' home, and so on.
Except in the vague idea of the puritanical faddist, the Stock Exchange
is an institution as lovable as it is fascinating. It may be, and often
is, the cause of ruin to those who abuse its facilities--to those who
are gamblers rather than either investors or speculators. It is quite
easy to draw the line between the three classes of business, or rather,
the two classes of business and the one class of folly. The investor
lends his money on perfectly safe security to the aid of commerce and
industry, expecting a comparatively small return, but that a safe one.
By so doing he is encouraged in thrift, whilst commerce and industry
enjoys the benefit of the capital, and the Stock Exchange is the medium
of it all. The speculator, less conservative, risks money, the loss of
which he is perfectly well able to afford, in the furtherance of
experiments in commerce and industry, be it the trial of a patent or the
opening up of a mine. He expects a big return should the experiment
prove successful, but is prepared to face the loss should it turn out
otherwise. He hopes to enrich himself, and without his aid commerce and
industry would make none of those rapid strides which are for the
welfare of the world, for speculation is the handmaid of enterprise. The
gambler, frequently usurping the name of speculator and thus bringing
legitimate speculation into ill-odour, risks money which he cannot
afford to lose, staking all in an inordinate desire for riches. Although
the line between speculation, which is perfectly legitimate, and mere
gambling can easily be drawn, it must be drawn by each individual for
himself. A perfectly legitimate speculation for a rich man might be an
act of folly for a man of moderate means. Between risking money which
can easily be afforded in a project well studied and thought out,
however uncertain, and risking money which cannot be afforded in a
project of which nothing is known, on the chance that some extraneous
circumstance may arise to multiply its value, there is a wide gulf
fixed. The gamblers it is from whom are drawn the operators and dabblers
who play with the Stock Exchange as they would with a pack of cards, or
with the chances of the race-course, to their own loss and to the profit
of insiders who, whenever they are called upon to play such a game,
always show in the long-run that they know most of it. It is the Stock
Exchange gambler rather than the investor, or the speculator who moves
legitimately within his means, who may rejoice in the boom with its
roaring business and rising prices, but who forms the real element of
danger in a slump with its sudden depreciation, and who frequently turns
the slump into a crisis, and eventually into a panic. These panics are
less frequently with us than they were, less widespread and less
disastrous in their effects, thanks to the rapid dissemination of true
news, and to the highly organised state to which the machinery of
finance has attained; but they will ever recur to provide a wholesome
check to those who are tempted to go beyond their depth, allowing
legitimate speculation to deteriorate into mere gambling. The Stock
Exchange offers facilities for such gambling, just as food offers
facilities for over-eating; yet food is not only a good thing, but a
necessity, and so is the Stock Exchange.
INDEX
Advertisement by members, 42
outside brokers, 43
Allotment, dealings before, 98-100
Royal Commission on, 133, 137
American prices, 156
Apprenticeship of members, 18-19
Royal Commission on, 127-8
Arbitrage firms, 156
Architecture of the House, 7
Art Society, 164
Athletics, 162-3
Backwardation, 69
Badges for clerks, 25
Banging the market, 71
Bank of England, Stock Exchange in, 43, 142-3
Bankruptcy of members, 102-3
Bank shares, dealing in, 145
Baring crisis, 147
Bar of the house, 9
Battle of Throgmorton Street, 148
Bearer bonds, 88
Bearer securities, settlement in, 61
Bears, 65-71
definition, 67
cornered, 71
covering, 71
raid, 71
their effect, 70
Benevolent Fund, 164
Boom, 167
Brokerage, 39-41, 49-50
Royal Commission on, 132
Brokers, 32-44
advertising by, 42
commission. _See_ Brokerage
duties of, 150-60
licensing of, 136, 139, 146-7
list of, 43
outside, 43-4, 121
price lists of, 119
underwriting by, 41-2
and jobbers, disputes between, 36-7
firms acting as both, 37
Bucket shops, 121
Bulls, 65-71
campaign, 70
Bulls, definition, 67
stale, 71
their effect, 70
"Burdett's Official Intelligence," 146
Business, how it is transacted, 45
done, record of, 117-18
Buying in, 61
manager, 30
Capel Court, 6
Stock Exchange established in, 141-2
Capital, organisation of, 3-4
of the Stock Exchange, 13
Carry-over, 51
process of, 67-9
Certification of transfers, 54
Change Alley, Stock Exchange in, 65, 139, 140-2
Charity, 161-2, 164-5
Checking bargains, 48, 151
room, 8
Christian Association, 164
Clearing house. _See_ Settlement Department
Clerks, 23-5
provident fund, 164
Closing time, 119, 157
Commission. _See_ Brokerage
Committee, the, 26-31
election, 26
meetings, 28
powers, 27-8
qualification, 27
Royal Commission on, 126-7
Companies Acts, 145
Committee on, 146
Consols, put option on, 73-4
put and call on, 76-7
transfer of, 85-7
Consol settlement, 56
Contango day, 57
rate, 68-9
Continuation. _See_ Carry-over
Contract note, 48-9
Cost of the House, 13
Coupons, 88
Covering by bears, 71
Cumulative preference shares, 93
Debenture stocks, 91-3
Debentures of the Stock Exchange, 14
Defaulter, 60, 101-8, 131
assistance forbidden to, 101
declaring a, 102
and clients, 103-6
readmission of, 106-8, 131
Deferred ordinary shares, 94-6
Definitions of the Stock Exchange, 1
Differences, speculation for, 50
payment of, 60
Directory of members, 124
Discount, 115
Dividends paid by the Stock Exchange, 16-17
Drawings of the interior, 8
Dual control of the Stock Exchange, 30
Royal Commission on, 126
Employees, dealing for, 50-51
Entrance fee for members, 21, 25
authorised clerks, 23
unauthorised clerks, 24
Establishment of the Stock Exchange, 141-2
Exchange Telegraph Company, 121-2
Ex dividend, 115-16
rights, new, all, 117
Expulsion, 28
Failures. _See_ Defaulter
Fixed charge stocks, 92
Foreign Loan Exchange, 142
Foreign Loans Committee, 146
Foreigners, exclusion of, 18
Founders' shares, 96-8
Gambling, speculation, and investment, 130, 165-8
Garraway's Coffee-house, 139
Gorgonzola Hall, 7
Guarantors for new members, 20
Hall of Commerce, 144
Hammering, 102
Hammer price, 103
History: a sketch, 138-49
Holidays, 29, 163
"House Annual, The," 161
"House on Sport, The," 162
Incorporation proposal, 135-7
Inscribed stocks, 85-7
Interior of the House, 7-13
Jobbers, 32-44
as specialists, 34-5
abolition question, 129
Jobber's turn, 47
Jonathan's Coffee-house, 140-41
King's visit, 8, 146
Lame Duck, 65, 71
Leeman's Act, 145
Library of financial documents, 123-4
Literature, 161-2
Making a market, 113
Mr. Justice Wright on, 148
Making a price, 44
Making-up day, 57
price, 67-8
Managers, the, 14
Markets in the House, 9-12
Marking prices, 48
Members, 18-25
admission, 20-21
apprenticeship as clerks, 18-19, 25
directory of, 124
Membership restrictions, 18-19, 22
Mining Contango day, 57
Name day, 51, 57
National Debt, 138
New House, the, 146
Official Assignees, 102, 104, 106
"Official Intelligence," 123
"Official Intelligence," predecessors, 146
Official List, 29, 109-10
growth, 5
magnitude, 34
marking prices for, 48
quotation in, 110-15
Royal Commission on, 133-5, 137
Options, 72-83
call, 72, 74
day-to-day, 79
effect on the market of, 83
operating on, 80-83
prices for, 77-9
put, 72-4
put and call, 73, 75-7
Orchestral and Choral Society, 164
Ordinary shares, 94
Overend-Gurney crash, 145
Panics, 144
Par, 115
Partnership prohibition, 33
Photographs of the interior, 8
Play in the House, 163
Population of the House, 18
Practical jokes, 163
Preference shares, 94
Preferred ordinary shares, 94-6
Premium, 115
Prices, double, 45-6
marking, 48
wide, 46-7
Price lists and records, 109-24
brokers', 120
Proprietors, the, 13
Prospectuses, 112-15
Provident Fund, 164
Public admission question, 131-2
Quotations. _See_ Prices
"Railway Intelligence," 146
Railway mania, 144
Registered securities, 87
Rigging the market, 70
Royal Commission, 125-37
Royal Exchange as the Stock Exchange, 138
Rules, 27-8, 142
Scrip, 100
settlement in, 62
Secretary of the Stock Exchange, 15
Secretary to the Committee, 30
Selling out, 51-2, 61
Settlement, the, 56-64
office work of the, 159-60
special, 62, 98
Settlement department, 58-60
establishment of, 145
manager, 30
Royal Commission on, 129
Settling room, 8
clerks, 24
Share, definition of, 1-2, 84
certificate, 53-5
Share and loan department, 54
manager, 30
removal, 149
Shares of the Stock Exchange, 16
Shorter's Court, 119-20
Situation of the house, 6-7
Slump, 167
South Sea House as the Stock Exchange, 139
Speculative business restrictions, 50-51
made illegal, 140
Sport, 162
Stags, 66-7
Stamp duties, 49
Stock, definition of, 1-2, 84
certificate, 53-5
inscribed, 85-7
Strangers in the House, 8
Street markets, 119-20
battle of the, 148
Subscription for members, 21-5
authorised clerks, 23
unauthorised clerks, 24
Superintendent, general, 15
Talons, 88
Tape prices, 12, 121-2
Telephone, use of the, 154-5
Tickets, 51-2, 57-9
for inscribed stocks, 86
Ticket day, 51, 57
Transfer, 52-5
of Consols, 85-7
Transvaal War Fund, 165
Refugees' Fund, 165
Trustees and Managers, the, 14
Trustee stocks, 89
Turn, jobber's, 47
Underwriting of capital, 41-2
Vendors' shares, 98
Waiters, 12, 102
Wares of the Stock Exchange, 84-100
"Weekly Official Intelligence," 122
Wide quotations, 46-7, 118
_x d_, 115-16
Transcriber's Notes:
Missing or obscured punctuation was corrected.
Typographical errors were silently corrected.