THE DAY ON ’CHANGE, WITH SUGGESTIONS FOR BEGINNERS
The stockbroker’s praises are never sung; if he has good qualities, one
seldom hears of them. Doctor Parker once defined the Stock Exchange as
the “bottomless pit”: Doctor Johnson said a broker was “a low wretch”;
politicians vie one with another in painting him a parasite and a
social excrescence. Impatient idealists who would take a short cut
to perfection assert that he is of no real economic value, and would
enact laws to restrain him. In the novels and on the stage he becomes
sleek, cunning, convivial, and slippery, while there is ever about him
a rank smell of money and a Machiavellian sublety that enables him
to get something for nothing. Without understanding him and without
comprehending his devious ways, we feel somehow that he lacks what Lord
Morley calls “original moral impetus,” and that in some mysterious way
there is a stratagem lurking in all his actions. When he enters the
stage or the story we say:
“By the pricking of my thumbs,
Something wicked this way comes.”
Members of the Stock Exchange are more or less familiar with Baron
Munchausen and Mother Goose--for if rumor be credited both these
characters live in Wall Street--so they accept with good humor the epic
touch of playwright and novelist who thus take poetic liberties with
them and their profession. But the iron enters into their souls when
you term them non-producers and parasites, and long into the night they
will debate it with heat, bringing down the lath and plaster on their
detractors with the heavy artillery of all the orthodox economists, and
painting in gloomy colors the picture of a commercial world without its
great Exchanges.
At such times they become very earnest, and the listener, who perhaps
never thought of it before, comes away at least partially persuaded
that society as it is constituted to-day will have to undergo a very
decided transformation before it can get along without the machinery of
which these maligned persons are so important a part. It has stood the
test of time; it has come to stay; its fundamental idea, economy and
utility in trade, began with the Agora of ancient Greece and the Forum
of Rome. If there is something apocryphal, then, in the tradition that
derides the profession, here at least is evidence of its early origin,
its growth, and its power of endurance. In any case, membership in the
Stock Exchange is to-day the ambition of good citizens everywhere, and
affords to many a father a solution of the question at once difficult
and important, “What shall we do with our sons?”
There are arguments against such a career, of course, just as there
are against all roads that lead anywhere this side Utopia, but
nevertheless, a man with capital, average intelligence, and good
health, daily contributing by his labor to the silent forces that ebb
and flow within these walls, can do well on ’Change without sacrificing
anything that makes for self-respect and without diminishing in any
degree his value as a useful member of the community. Moreover, he
is free from things sedentary and is brought into daily contact with
men and affairs that broaden and instruct him. He becomes a thinking
and observing person, one whose mind never becomes atrophied for want
of material on which to feed. He must be equipped with patience and
philosophy to enable him to endure, without losing his nerve, the
long periods of dulness that are a sorry part of the business, but
he will not complain of wasted days if he learns to know that waste
time, like waste material, may be converted into valuable by-products;
that just as manufacturers are vigilant in turning their scrap-heaps
into commercial utilities, so, in his daily economy the Stock Exchange
member may, if he has the right stuff in him, turn the ashes, slag, and
refuse of the hour into things of practical value. Once he has learned
to do this, the novitiate has surmounted the most serious obstacle in
his profession.
His days on “the floor,” as it is commonly termed, will bring him in
contact with many different types. He will find here all that is finest
in human character, and many withering things that are most fatal to
it; these he may find anywhere, because there will always be men who
carry all sail and no ballast, “men who cannot believe life real until
they make it fantastic.” But the Stock Exchange is a great leveler;
infallibly its swift analysis of character will search him out, weigh
him and measure him, and place him just where he deserves to be.
Nowhere else among business men does this silent and sure appraisal of
worth find a more perfect result. It has nothing to do with the size of
one’s purse nor the blue in one’s veins; it takes no account of what a
man has been nor of what his ancestors were. Commercial honor is what
counts, and within these four walls it is raised to a high plane and
maintained with reverence. They live a touch-and-go life, with quick
changes and nerves all in action, but they make no mistakes when they
analyze character in their great crucible.
Those brutal aphorisms, “money talks,” “might makes right,” “whatever
is, is right,” and all similar phrases, become meaningless in the
matter-of-fact subordination of externals that one witnesses daily on
’Change, where life is stripped of all save elementals. It is character
that “talks” here, not money; if might makes right, it is the might of
decency and not of brute force or “pull”; whatever is, is “right” only
so far as it conforms to the code of gentlemen and exalts the square
deal. Unless a candidate understands this in its fullest sense, and is
determined to make it his goal, he had better avoid the Stock Exchange.
Conversely, we find in this critical atmosphere another reason why
honorable men are ambitious to become members, for it is something
inspiriting to have won the discriminating approval of a critical
assembly abounding in experience and guided by good traditions.
The New York Stock Exchange is an association and not an incorporated
body. It resembles a club in its organization, and hence through its
governing board it exercises a control over its members that could not
be maintained by differently constituted authority. From the moment
a man signs that Ark of the Covenant, the constitution, and thereby
becomes a member, he places himself, his partners, his customers,
his employees, his books and all his business affairs unreservedly
in the hands of the Board of Governors. This body, which is composed
of members of the Exchange, is chosen in classes of ten, by the full
Board at an annual election. It consists of forty members, divided
into eleven standing committees, of some of which the President,
Vice-President, and Treasurer are also members.
It has been urged in times past, by those who have not understood
the peculiar powers of this Governing Board, that the Stock Exchange
should incorporate in the manner provided by law, and thus place
its affairs within the control of the State authorities, so that if
mistakes occur and wrongdoing becomes evident offenders may be dealt
with by the legal authority vested in the Courts. But the essential
point altogether missed in this suggestion lies in the fact that the
absolute power vested in the Board of Governors, by the existing plan,
gives the Stock Exchange authorities vastly greater control over its
members than any law on the statute books could possibly give. The
Hughes Commission, which went thoroughly into the affairs of the Stock
Exchange in 1909, recognized this fact, and its report emphasized the
point that if changes were necessary they should come from within the
Exchange itself, because of the broad control vested in it by its
constitution.[93]
The manner in which the Board of Governors handles offences as
they occur, and the way punishment is meted out, would not have a
constitutional leg to stand on if, as an incorporated body, offenders
could invoke their legal privileges. Under its present organization,
for example, the Board may, if it sees fit, intercept and cut off a
member’s telephone connection; it may dictate with whom he may or may
not do business, and in its wisdom it may determine how, when, and
where that business shall be conducted. If it were an incorporated
body and each offender could resort to the courts in instances such
as I have cited, what would become of its rules, and how could the
Exchange authorities maintain its absolute determination to protect the
public at all hazards? Under the existing system, which true friends
of the Exchange and of the public may well wish to see maintained, the
governors are enabled to find the direct way and the common-sense way,
without being blocked by a jungle of legal technicality. They are not
to be delayed or restricted by alibis, by pleas of immunity, or by
States’ evidence, nor are they to be interfered with by the rain of
legal writs through which an accused man, in the courts, may twist and
double and block and delay the punishment for his sins, if sins there
be.
Wonderment is often expressed by men in other lines of business at the
severity of the punishment sometimes inflicted by the governors in this
autocratic control. To expel or even to suspend a member, and thus
bring upon him great pecuniary loss as well as disgrace, all because of
an offence which might go unpunished in other professions, naturally
seems to an outsider to be unnecessarily severe. The answer to this is,
of course, that the governors, recognizing their great duty, accept
as a public trust the power and the ability to maintain it. No matter
whose head is hit, the rules will always be vigorously enforced because
they are designed to protect the public--a public, I am sorry to say,
that has not always tried to understand what the Exchange stands for.
That is why no statute of limitations can interfere to protect any
one of its members from the penalties that attend a departure from
the straight line of business morality. A rigid enforcement _from
within_ is the only efficient way, and no one who knows the governors
and their arduous labors on behalf of the principle for which the
Exchange stands can ever doubt it. The members themselves, no matter
who is punished, are a unit, and an enthusiastic unit, in upholding the
disciplinary action of the governors every time.
The best course for a young man to pursue who wishes to become a member
is first to spend a year or more as clerk in a well-regulated broker’s
office. The business is by no means intricate, and there are details
with which he should familiarize himself. If in future years his
partners are absent, he can then go over his firm’s books and acquaint
himself, as he should, with all its affairs. A dishonest partner could
ruin him, or, what is worse, disgrace him, for the governors recognize
no distinctions as between partners, nor is ignorance accepted as an
excuse. Office partners who are not members of the Exchange do not
always understand the rules, nor the rigorous spirit in which they are
enforced, and just as the Board member is held accountable for his
partners, so he must pay the penalty for their misconduct.
This means that a member must choose his partners carefully, must
familiarize himself with what they are doing, and must know how to
read every entry on the firm’s books. Then, too, it is immensely
satisfactory to one who has been on the floor all day and more or less
out of touch with his office details to learn of his own knowledge each
day, before he goes home, just where the firm stands. He looks over the
customers’ accounts, the loans, and the nature and amount of the firm’s
unemployed resources, including its balances at the banks. Such a man
sleeps well, and reduces to a minimum the anxieties that, at critical
times, make of this a nerve-racking occupation. It is all simple
enough, and in the modern methods of office economy in bookkeeping he
can do it without loss of time. Above all other considerations, such a
man knows his business thoroughly from top to bottom, and he should not
think of investing his capital on any other basis.
Perhaps a word will not be amiss regarding partnership agreements. A
Stock Exchange commission business is one that should be conducted like
any other business--that is to say, reserves should be laid aside and
surplus balances created for the inevitable rainy day. That this is not
done by all brokerage houses in the way it should be done is due to
the curious habit that has grown with the years, whereby stockbrokers
spend their money, uptown and down, with a lavish hand. Too many men of
the younger generation thus give hostages to fortune in their private
extravagances by “drawing down” their credit balances as fast as they
accrue. “Easy come, easy go,” seems to be the guiding principle, and
when hard times come, as come they must, debit balances are created
that soon eat into capital account.
No hard and fast rule can be laid down to meet conditions like these,
but the best method I have seen, and the one most wisely designed
to avoid mishaps for beginners, consists in a partnership agreement
by which each member of the firm may draw a monthly sum, worked out
to meet his normal requirements, _and no more_. All that remains is
then turned into capital account, where it draws interest, becomes a
producer, and grows by what it feeds on. I have in mind a firm of young
men who some years ago resorted to this method of compulsory saving,
with such success that, despite the vicissitudes of the passing years,
the members comprising it are now all wealthy, attributing their good
fortune wholly to this wise and provident copartnership agreement.
New York Stock Exchange memberships are obtained in only one way.
Having assured himself that he can meet the requirements of the
Committee on Admissions, and having provided himself with two
sponsors, the candidate enters into negotiations with the secretary
of the Exchange for the purchase of a “seat,” as it is termed. As
there are only 1100 members, and as the membership is always full,
he must either purchase the seat of a deceased member, or make a bid
sufficiently high to attract a seller. He may, of course, subject to
approval by the committee, inherit a seat or acquire it by private
transfer, but the customary process is to buy openly through the
secretary, a salaried officer of the Exchange, whose authority in
matters of infinite detail is such as to make him a mighty power in
executive affairs. Thereupon he pays over the purchase price, together
with an initiation fee of $2000, and presents himself and his sponsors
before the Committee on Admissions.
This committee first calls his proposer, and then his seconder,
and they are subjected to a careful inquiry as to how long they
have known the candidate, and whether in a business or social way;
his qualifications for membership, his health, his character and
reputation, and his previous business experiences are all subjected to
a microscopic scrutiny. His sponsors are also asked if in the ordinary
course of business they would accept his check for $20,000.[94] If the
answers to these questions prove satisfactory, the candidate himself
is summoned and put through a similar examination. As his name has
been publicly posted on the bulletin board for two weeks, anything
detrimental concerning him will probably have been communicated to
the authorities before he is examined, but if not, provided he proves
satisfactory and the particular department of Stock Exchange work which
he proposes to undertake meets with the approval of his inquisitors,
and provided also his partners are not objectionable, he is elected
to membership after he signs his name to that _magnum opus_, the
constitution.
The price paid for memberships in recent years has varied widely with
the condition of the times and the state of the stock market. In the
halcyon days of December, 1905, and the opening months of 1906, there
were several transfers at $95,000, the high-water mark. Following
the panic of 1907 seats declined in December of that year to $51,000
and rose again in 1909 to $94,000. The only dues are $100 annually,
together with $10 voluntarily paid by members to the heirs of each of
their deceased colleagues, but this amount is, under the regulations
of the Exchange, limited to $150 annually, the balance, if more than
fifteen members die in any one year, being paid out of reserve
funds. The sum of $10,000 which thus accrues to the heirs of deceased
members is, of course, much cheaper than any other form of insurance.
The Exchange is enabled to maintain it by the $10 contribution as
described, and the general fund is kept intact because the 1100 members
actually contribute $11,000, of which the extra $1000 is set aside as a
reserve, which is prudently invested.
If we accept the fallacious argument that a thing is worth just what
one can get for it, there can be no argument as to the value of Stock
Exchange memberships, but that is not the way to approach the subject.
It may be said with certainty that no matter how much has been paid
in the past, or how much may conceivably be paid in the future, a
purchaser who devotes to his business the same time and labor that
he would devote to any other business in which a similar capital was
invested will always be able to earn a good return. Those awful periods
of stagnation will appear now and then, and accidents in the shape of
losses will occur and return again to plague him, but, nevertheless,
the hard worker will find no cause for complaint when he sums up,
let us say, a five-year average. This is demonstrated by the fact
that it is only on rare occasions a Stock Exchange member changes his
vocation, which is another way of saying that memberships are held at
high prices because holders are prosperous and will not sell.
In considering the value of Stock Exchange memberships it is important
to include the “unearned increment” that goes with them. Despite all
that may be said against it by members themselves, who in dull times
denounce their calling with cynical extravagance, membership carries
with it certain undefined advantages. It is a centre of the financial
world in America; the business is one that quickens enterprise and
encourages adventure; it undeniably gives a man a certain standing
and character among his fellows; he is always abreast of the times,
his hours are not long, he acquires habits of deduction, analysis,
and observation that sharpen his wits and give zest to life; he is
surrounded at all times by a great storehouse of wit, wisdom, and
experience, and from the very nature of his business he is often
brought into contact with important news of which he can take advantage
and which may lead to highly profitable opportunities for investment or
speculation. He would be less than human if he did not avail himself of
such opportunities, and the business would lose much of its enjoyment;
indeed “the tranquillity of dispassionate prudence” of which Goldsmith
speaks may easily be carried too far on ’Change.
When a newly elected member makes his appearance on the floor he is
taken to the rostrum by one of his sponsors, who introduces him to
the Chairman. That formality concluded, he is greeted by shouts of
“New Tennessee,” and is instantly surrounded by a howling mob of young
members bent on initiating him. The origin of this war-cry, “New
Tennessee,” is an enigma one would like to solve, but it is lost in
obscurity. Even the board-room antiquarians have no clue. One of the
members tells me that his grandfather, who was a member of the old
Exchange that stood at the corner of Wall and William streets in the
early 1830’s, often told him that the phrase was in use then, just as
it is to-day. Its early origin, at least, is thus established, and
one’s curiosity concerning it is proportionately increased. However it
originated, it remains the popular slogan, and when a shrill-voiced
member in any part of the room cries out above the din, “New
Tennessee,” there a crowd of the boisterous younger element gathers to
welcome a new member.[95]
To-day, thanks to the prudence of the Committee of Arrangements (which
has charge of the board-room discipline), the hazing of new members
is confined to harmless pranks, but up to a year ago the process was
a severe one. Newspapers rolled into clubs were used to beat the
novitiate over the head; he was pelted with everything within reach;
his collar and tie were torn off, and after a hundred strong young men
had thus jostled and mauled and pounded him all over the room, he was a
sorry sight. It began to be felt, after a peculiarly severe hazing of
this sort, that something might happen one day to bring reproach upon
the Exchange and sorrow to the members themselves, so the committee
wisely put a stop to the practice.
When the new member settles down to serious work he will find open to
him several different methods of doing a brokerage business, and in
this respect the New York Exchange differs widely from those abroad. In
London, for example, there are but two classes, jobbers and brokers,
to only one of which a member may belong. Until very recently the
distinctions between the two classes were but vaguely defined, and
even now frequent undercurrents of resentment are aroused between them
because of the alleged encroachments of one class upon the domain
of the other. In Paris, where the seventy _Agents de Change_ enjoy
an absolute monopoly by government authority, there is very decided
opposition by the less fortunate members of the fraternity, and there
are many who predict that the friction and dissatisfaction which
monopolies arouse in this day and age will sooner or later bring about
a reformation of the French system.
Here there are no such distinctions, and no friction. A member may be
any one of several different kinds of brokers, or he may be all of
them at once, if his arms and legs will stand the strain, and if his
financial resources will enable him to meet the losses arising from
mistakes. These mistakes are a sorry part of the business, and they are
bound to occur every now and then, no matter how careful a man may be,
but I have observed that they come about most frequently in the case of
men who try to do too much.
A man may, if he chooses, become a partner in a commission house, and
confine his time to the execution of orders for his firm’s customers.
For these services his firm receives and is compelled to collect, by
the rules, a commission of one eighth of 1 per cent.--that is to say,
$12.50 per hundred shares. Or he may be a “specialist,” and establish
his headquarters at some one spot in the room, and do nothing but
execute orders entrusted to him by his fellow-members in the one stock
or group of stocks situated at that particular spot. For his services
in these transactions he receives a commission of two dollars per
hundred shares, to which is added $1.13 if he is required to “clear”
the trade--that is, to receive or deliver the stock. The latter is
called “three-and-a-shilling business,” or “clearance business.”
The vocation of the specialist is one that causes frequent comment and
ill-merited abuse. It has been charged that he sometimes exercises
arbitrary power in executing his orders, and complaint is heard that
the price at which he deals is not always a fair price. My observation
is that four times out of five the fault lies, not with the specialist,
but with the broker who gives him the order. The latter has been trying
to do too much, he has held the order in his hand whilst engaged
elsewhere in the hope of saving the commission for himself, and then,
when he has “missed his market,” turns the order over to the specialist
and shifts the responsibility to his shoulders. This is scarcely fair,
and it simply should not happen. The customer protests at the delay and
at the price; he is told the specialist is responsible, and straightway
another voice joins the chorus that holds the specialist in abhorrence.
Like the chairman of the House Committee of a club, the specialist
is made to bear everybody’s burdens; he is the target for all the
criticism that any one chooses to hurl at him. And yet he is one of
the most useful and indispensable features of the Exchange machinery.
Without him there would be no market whatever in very many securities;
like the London jobber, he is constantly on the spot, ready to take
chances by creating at his personal risk a market where none may have
existed. If it be urged that the specialist should not speculate, but
should confine himself solely to executing the orders on his books, it
may be answered that in such a case he would often be useless, for in
many instances the orders on his books are insufficient in volume to
establish a close market or anything approaching it. By reason of his
speculations a market is created; without them it may not exist. He
speculates, therefore, for the same reason that jobbers in the London
market speculate, and dealers in wheat, cotton, and wool. Like them, he
must have goods on hand to supply the demand, and in the purchase of
these goods (securities) he speculates, legitimately, on the hope or
belief that buyers will appear.
If the new member chooses, he may become what is known as a “two-dollar
broker,” with a roving commission, executing orders for members in
any part of the room at $2 per hundred shares. The “two-dollar man,”
as he is termed, is a hard worker above his fellows. He labors for a
minimum wage; he must work every day or forego his revenues, for he
cannot delegate his orders to any one else and receive a commission
for these vicarious services. He takes big risks, because he has many
orders from many different houses; the least inattention means loss.
I have known one of these two-dollar men to lose $10,000 on a mistake
on a 500-share order from which his commission was but $10. He is
supposed to be a mine of information concerning floor gossip; his value
to the houses that employ him lies quite as much in his ability as
a newsgatherer as in his skill as a broker. He is on the jump every
minute. The one redeeming feature of his business is that he has no
office responsibilities, and none of the burdensome--and sometimes
painful--duties that attend the stockbroker’s relations to his clients.
There are perhaps fifty “odd-lot” brokers on the floor, and a member
may, if he pleases, take up this branch of the business. It has to do
with the buying and selling of fractional lots of securities, on which
no commission is charged because the peculiar nature of this business
enables the broker to trade against his commitments as they arise,
and thus obtain compensation for his services in the resultant profit.
In a small way the odd-lot broker, like the specialist, resembles the
London jobber. One of the houses that confines its operations to this
“odd-lot” business has nine partners, seven of whom are members of
the Exchange; another has seven partners with six board-members. The
fact that two such houses should have a million dollars invested in
memberships, to say nothing of the large sums employed as capital,
speaks eloquently for the volume of business they are called upon to
handle.
This business, which includes fractional lots of securities from one to
a hundred shares, is one of the most important on the floor, since it
represents, very largely, the purchases and sales of an army of small
investors all over the world. To such customers, very properly, the
Stock Exchange gives the best it has, safeguarding their interests with
quite as much care as it bestows on the greatest of market operators.
The handling of all the odd-lot orders that accumulate in a busy day,
the skill required in the office-machinery, the vigilance of the floor
expert, and the foresight necessary to conduct the trading operations
of the firm make this a most fascinating business.
Another field to which a member may turn is that which has to do with
transactions in bonds. The “bond-crowd,” as it is called, makes its
headquarters on a platform under the east gallery. There are about
fifty of these “bond-men,” and the compensation paid them for their
service is the same as that paid on stocks, ten thousand dollars in
bonds being reckoned equivalent to 100 shares. As there are twice as
many bonds as stocks listed on the Exchange, one would think a larger
number of brokers than this little coterie would be required to handle
the transactions, but, despite this disparity in the relative size of
the lists, it so happens that very many of the listed bond issues are
rarely dealt in, and hence there is no surplus business. Moreover,
brokers from all parts of the room are constantly executing their own
bond orders without having recourse to the assistance of brokers who
make this department a specialty.
Still another opportunity presents itself in the business of
arbitraging. The arbitrageurs stick closely to the rail along the south
wall, where there are pneumatic tubes connecting with the cable offices
downstairs. Their business is one that calls for the utmost speed,
since it involves taking advantage of fractional differences that arise
from time to time in the prices of stocks that are listed on foreign
Bourses as well as on the New York Stock Exchange. Thus Canadian
Pacific may sell at 270 in London and at the same time at 269½ in
New York, and as an excellent cable service keeps pace with these
fractional differences, the arbitrageur may buy in New York and sell in
London and receive a confirmation, all within three minutes.[96]
Because of its complexity and its risks, arbitraging is not a business
that appeals to beginners on the floor. One must have reliable
colleagues on the foreign Exchanges who are constantly watchful and
alert, and who are moreover possessed of sufficient capital to finance
large transactions. In addition, there are labyrinthine difficulties
to surmount in the way of commissions, interest charges, insurance of
securities in transit, fluctuations in the money markets abroad and at
home, cable tolls, letters of confirmation, rates of foreign exchange,
settlement days, contangoes, and many other matters. Unless a man has
had a long experience in the difficult art of arbitraging, he had
better shun it or prepare for trouble.
Finally, in determining what branch of the Stock Exchange business
he will undertake, a member must consider that numerous and shifty
contingent known as “floor traders.” These gentlemen afford an
interesting study. They do not accept orders; each man is in business
for himself. They entertain no illusions, and they recognize no
alliances with each other. Each one follows his own inclinations, and
does not permit himself to be moved by tips, or rumors, or gossip, or
sentiment. He scoffs brazenly at all forms of “inside information.” His
power of observation is keen, and his habit of analysis and deduction
is wonderfully developed. In the surging crowd around an active
stock he sees things with microscopic eye, and acts with surprising
promptness; once his conclusions are reached, speed and agility are
relied upon to do the rest. Age cannot wither, nor custom stale, his
infinite variety. He is a bull one minute, and a bear the next. He is
intent, resourceful, suspicious, vigilant, and ubiquitous. He asks no
quarter, and gives none. Now he is sphinx-like, deaf, inscrutable and
impenetrable; now exploding with the frenzy of battle. You may stand
and chat with him, and he may seem to listen to you. In reality he does
not hear you at all. His roving eye is elsewhere, his mind is intent on
other things. In the middle of a sentence he may leave you abruptly and
go tearing from crowd to crowd like a thing possessed, the incarnation
of energy.
Visitors in the gallery who look down upon the scene on the floor in
active markets, when all the Stock Exchange elements just described are
striving at their utmost, come away in wonderment. The scene is one
they do not understand. Such tumult is foreign to anything in their
experience, and in their failure to recognize the economic forces at
work in the animated panorama before their eyes they are prone to
form superficial and erroneous opinions. The disorderly nature of the
work seems to impress the visitor forcibly, yet the Stock Exchange is
perfectly orderly; transactions involving millions come and go without
the slightest friction. Nothing could work more smoothly.
It does not occur to the uninstructed spectator that mighty forces
are here at work in establishing values; that the object of the Stock
Exchange is to safeguard investors; that it is the one unobstructed
channel through which capital may flow from sources where it is
least needed into those where it may be most beneficially employed.
The casual onlooker often gives no thought to the high standard of
commercial honor that is maintained here; he does not realize that his
own affairs, whatever they may be, would face a serious situation were
this very important part of the modern mechanism of business to suffer
interruption. And so it sometimes happens, in his hazy and nebulous
impressions of the Stock Exchange as gathered from the visitors’
gallery, that this man’s mind is fertile ground for the seed which may
be sowed there by every genteel humbug, demagogue, or quack whom he
chances to meet.
It may be admitted freely that the facilities afforded by Stock
Exchanges, like all other great public utilities, are sometimes
foolishly or dishonestly abused, but by no stretch of the imagination
can such abuses attain to the mischief done by those who would deceive
people into the belief that the Stock Exchange, because it deals with
large affairs in a large way, has some improper quality about it. Many
minds, many hands, and many hours of patient labor have been bestowed
on the making of the chronometer which is a vital part of a great
ship; yet a child may “put it out of business,” and destroy the ship’s
company.
That these observations apply to the New York Stock Exchange need not
be elaborated when we consider that one third of our nation’s wealth
is represented by its securities; that there are two million owners
of them; and that, through the widespread publicity of Stock Exchange
quotations the world over, all these owners are given gratis the
epitomized judgment of experts as to the value of those securities
each day and their prospective value in the future.[97]
The Stock Exchange is open for business from 10 A.M., to 3 P.M., and
on Saturdays from 10 to 12 noon. The broker reaches his office between
9 and 9:30 A.M., looks over his correspondence, makes a mental note of
the general status of the firm’s affairs, glances at the morning’s news
that is rapidly reeling off the ticker, reads the prices cabled over
from the London Stock Exchange which has been in session four hours,
and thus in a general way acquaints himself with what may be expected
at the opening of the New York market. The two-dollar broker and the
specialist do not concern themselves greatly with such matters, and
frequently they go directly to the floor without stopping at their
offices.
By 9:45 A.M. the Board is beginning to present a scene of animation.
Of the 1100 members not more than 600 are in attendance, and often not
more than 400; indeed, there are members who have never once entered
the room. But the attendance is increased by the presence of some 230
pages in uniform, wearing five-year service stripes, of which the
sleeve of the superintendent is adorned with eight; 30 telegraph
operators, whose business it is to hurry from place to place gathering
quotations as they occur, and sending them out over the ticker, and by
550 telephone clerks who occupy the long booths on the west wall, where
private lines connect members with their offices.
These clerks are not permitted to go on the floor. Their employers,
who rent the telephones from the Exchange, pay $50 annually to the
institution as a fee for each clerk. As their duties are extremely
important, involving the transmission by ’phone of orders and reports
that often run into millions, it will be seen that this small army of
private line operators is of necessity highly trained. An instant’s
relaxation or inattention, or a failure to transmit promptly and
correctly the verbal messages entrusted to them, may conceivably lead
to confusion and losses of great importance.
At each of the sixteen posts in the room, from twenty to forty stocks
are situated, and another group covers the north wall. Once a position
is assigned to any security by the committee in charge, it is seldom
moved elsewhere, and thus, although there are nearly six hundred
different issues of securities, the broker soon learns the location
of each one and turns automatically in that direction when an order
reaches him. At each of the posts, and along the north wall, the
specialists in these various groups of stocks are at work before the
opening of the market, entering the day’s orders in their books, some
with the rapid energy that betokens an active opening, others with an
indifference that spells dulness in their particular line.
At Post 4, in the northeast corner, there is also an ante-market
gathering, for this is the spot where stocks and money are borrowed and
loaned. This “loan crowd,” as it is called, was formerly the gathering
to which one turned to gauge the market position of the bear party,
since the borrowing of stocks by “shorts,” as done here, furnished an
index of the strength or weakness of that interesting element. But
of late it has lost its ancient prestige as a guide in such matters,
because in order to hide the information sought, borrowing of stocks on
a large scale is now done privately. This “crowd” has been the scene of
some tremendous excitement, as in the Northern Pacific corner of May
9, 1901, when the price soared to $1000 per share and the shorts were
trapped, and on that day in October, 1907, when money, after loaning at
125 per cent., was not to be had, for a time, at any price, although
brokers with the best collateral would have paid 200 or 300 per cent.
for accommodation, and ruin stared every one in the face.
As the hour of ten draws near, activities increase. On the south
wall the arbitrageurs are busy deciphering their code messages and
distributing orders, many hundred telephone bells are ringing in the
long booths where clerks are hastily writing their messages; crowds
of visitors gather in the gallery, while beneath it the bond-brokers
prepare for their labors; indicator boards on the north and south
walls, like great kaleidoscopes, display and hide their number with
the same electric suddenness that seems to characterize everything and
everybody--then bang! the gong rings, the chairman’s gavel falls, and
another day begins. Yesterday is embalmed with the Pharaohs; they never
speak here of what _has_ happened, but only of what _will_ happen--and
this is a new day.
Naturally, certain securities are more active than others, and
here there are the largest crowds. As the limits surrounding the
trading-posts are but vaguely defined, one crowd will sometimes get
mixed up with another, whereupon confusion results, and good-natured
if earnest appeals are heard to “get out,” and “get over.” Into one
of these struggling masses a broker with an order or a trader with
an inspiration literally hurls himself; each sound in the jargon of
voices, which means only Bedlam and Babel to the visitor, is to him
perfectly understood. He may be pushed this way and that, or tossed
aside, or hidden altogether by bigger men who surround him, yet he has
no difficulty in determining the price and in doing what he came there
to do; all this with surprising celerity and accuracy. The business
done, he hastens to his telephone, makes his report, and is ready for
the next order. The manner in which some of these transactions take
place between brokers has long been a subject of praise. A word, or
a nod, or an upraised finger, or a tap on the arm, and hundreds of
thousands of dollars change hands without a scrap of writing or a
witness. A magazine writer thus describes it:
One pastime of the American public is the manly sport of throwing
mud. A shovelful of scandalous mud--a clean white target, and many
a reputable and disreputable citizen is having the time of his
life. We bespatter our philanthropists, our statesmen, merchants,
lawyers, and divines. We vilify our art, our architecture (I take
a hand in that sometimes myself), our literature, or anything else
about which some one has spoken a good word.
One of the time-honored institutions of our land--one which has
never ceased to be the centre of abuse--is the New York Stock
Exchange. Here conspiracies are organized for robbing the poor
and grinding the rich; so despicable and damnable that Society is
appalled. Here plots are hatched which will eventually destroy
the nation, and here the Gold Barons defraud the innocent and
the unwary, by stock issues based solely on hot air and diluted
water. Here Senators are made, Congressmen debauched, and judges
instructed--even plans consummated for the seduction and capture of
the Supreme Court. All this is true--absolutely true--you have only
to read the daily papers to be convinced of it.
There is one thing, however, which you will not find in the
daily papers. It is not sufficiently interesting to the average
reader who needs his hourly thrill; and this one thing is the
unimpeachable, clear, limpid honesty of its members.
When you buy a house even if both parties sign, the agreement is
worthless unless you put up one American dollar and get the other
fellow’s receipt for it in writing. If you buy a horse or a cow, or
anything else of value, the same precaution is necessary. So too if
you sign a will. Your own word is not good enough. You must get two
others to sign with you before the Surrogate is satisfied.
None of this in the Stock Exchange. A wink, or two fingers held up,
is enough. Often in the thick of the fight when the floor of the
Exchange is a howling mob, when frenzied brokers shout themselves
hoarse and stocks are going up and down by leaps and bounds, and
ruin or fortune is measured by minutes, the lifting of a man’s hand
over the heads of the crowd is all that binds the bargain.
What may have happened in the half hour’s interim, before the
buyer and seller can compare and confirm, makes no difference in
the bargain. It may be ruin--possibly is--to one or the other,
but there is no crawling--no equivocation--no saying you didn’t
understand, or “I was waving to the man behind you.” Just this
plain, straight, unvarnished truth, “Yes, that’s right--send it in.”
If it be ruin, the loser empties out on the table everything he
has in his pockets; everything he has in his bank; all his houses,
lots, and securities--often his wife’s jewels, and pays 30, 40, or
70 per cent., as the case may be.
What he has saved from the wreck are his integrity and his good
name. In this salvage lies the respect with which his fellows hold
him.
Every hand is now held out. He has stood the test, he has made
good. Let him have swerved by a hair’s breadth and his career in
the Street would have been ended.[98]
Of course mistakes and misunderstandings do sometimes occur, and these
are the banes of the broker’s life. He will lose $500 with equanimity
on a personal venture, but he will howl in distress over a loss of
$25 on a mistake, and apply to himself a lurid mosaic of epithets
because of it. The one merely shows bad judgment and is one of the
little amenities; the other he feels is stupidity. At such times the
stockbroker adopts Talleyrand’s bold hyperbole when he heard of the
death of the Duc d’Enghien, “It is worse than a crime; it is a blunder.”
When a “mix-up” occurs in a crowd, as when four or five men make claim
to having supplied a bid simultaneously, everybody produces a coin and
“matches” on the instant. It is a case of “odd man wins,” and no time
to lose. The market may be active and differences of seconds may spell
losses of thousands. In less time than it takes to tell it, everything
is adjusted and forgotten. But sometimes a mistake occurs which is not
discovered by either party until after the market has closed. A man may
think he sold 500 shares, for example, whereas the buyer has only 400
on his book. In a case of this sort, the discrepancy is covered “at the
market” next morning and the loss or profit is divided. Differences
between members are seldom irreconcilable, and when they assume serious
proportions any third man will act as arbiter and speedily settle them.
It is a significant fact that the Committee of Governors selected
to arbitrate disputes is rarely called upon. Rarely, too, is there
acrimony or hard feeling. The use of epithets is forbidden; to call a
man a liar means prompt suspension. And so they live on raw nerves,
with incidents occurring daily that add to the strain, yet ever with
good-humored acquiescence toward whatever fortune deals out to them,
and with generous camaraderie one to another.
As the day advances on ’Change, news and gossip and rumors of all kinds
pour in, and to these the active broker must devote a large part of
his time. It is astonishing to what extent the public, or that part of
it that lingers in brokerage offices, calls for news from the floor.
The demand is insatiable. “What do you see over there?” “Who is buying
Steel?” “Who is selling Union?” “What’s the news in Copper?” “What do
you think of the market?” These are the messages that come over the
wires all day long, not merely from the New York offices, but from
Montreal, Boston, Chicago, St. Louis, and many other points. And no
matter how busy the floor broker may be, time must be found, somehow,
to reply to every question as best he may, for at the other end of the
line there is a customer waiting to hear from him.
Just why this customer yearns for news from the floor has always been
a mystery to me. What does he expect to learn? What value attaches to
a list of names of brokers who buy or sell Steel, when everybody knows
that really important principals in these matters invariably hide their
hands? All the significant news of the day is printed on the news
tickers and reaches the customer’s eye before the broker or the floor
knows anything about it, yet never an hour passes but he is importuned
to “say something” about what is happening on ’Change, although half
the time nothing whatever is happening. The climax of this sort of
thing is reached when the floor man is asked to predict the future
course of the market, a request that reaches him a dozen times a day.
Now, in the name of common sense, what does he know about whether the
market is going up or down? How can a man who is swimming with the
current tell how fast he is going? If he were a seer who could foretell
such things he would have all the money in Wall Street, in which case
he wouldn’t remain a broker very long.
Just watch him; he is as busy as a man can be; his hands are full of
orders, his head is occupied with many anxieties, his eye is on the
indicator board, or scanning the room; arms and legs are working as
fast as nature will permit; he must concentrate at all times. His
ears ring with the strife of the room; all sorts of rumors, many of
them ridiculous, are hastily whispered to him; “boos” and groans from
the bears, shrieks and yells from the bulls--this is the sort of
thing he hears all the day long. How can he form an opinion when thus
distracted? He stands too close to the picture; he lacks perspective.
What such a man thinks of the market isn’t worth anything; indeed, he
does not “think” at all except about executing his orders, and heaven
knows that is enough to engross him.
Answering all the questions that come to him over the wires is the
hardest task, and the most distasteful thing the floor man is called
on to do. He knows that he doesn’t know anything; from his point of
view no information is better than misinformation. He feels with Josh
Billings, “It’s a mitey site better not 2 no so mutch than 2 no so
mutch that ain’t so,” but nevertheless he must continue to express
views and theories and opinions and predictions, whether he likes it
or not. Some of his oracular utterances are illuminating. “Market is
going down,” he replies, “because there are more sellers than buyers.”
Inexorable logic.
There was old Y----, who used to talk to his customers sitting near
his office window, which faced Battery Park. He was a shifty professor
of finance who never was known to hold the same opinion of the stock
market two days running. “This market,” he said one day, “is going away
up, crops are good, money is easy, railroads are rolling in wealth,
and--look over there”--pointing to a line of immigrants walking through
the park from the landing place--“the brawn and sinew of old Europe
coming over here to develop our resources.” The very next day the
market had what is called a “healthy reaction.” Quite unmindful of his
consoling prophecies of yesterday, old Y---- looked at the tape and
said, “This market is going away down. Crops are poor, money is tight,
railroads are in a bad way, and--look over there”--pointing to another
procession of immigrants--“the scum of Europe coming over here to rob
our American laborers.”
If that portion of the public which buys and sells stocks often has its
little joke at the expense of brokers, so also brokers in their turn
frequently have cause to laugh at their clients. “Cheer up,” was the
message sent over the wire by a hopeful broker to a despondent client;
“cheer up, the market can only go two ways.” “Yes,” was the reply,
“but it has so damn many ways of going those two ways.” During the
rubber boom of 1910 on the London Stock Exchange, a broker wired to a
client in Ireland, “Rise in bank rate considered likely,” to which he
received a prompt reply, “Buy me five hundred.” A telegram came over a
private line one day last summer from a customer in Montreal. It was
a deadly dull period, when, owing to the indifference of the public,
stockbrokers were not making expenses. “What are you chaps doing over
there?” said the telegram. “Why don’t you start something?” to which
the floor member replied, “Read St. Luke 7:32.”[99] This must have been
the same member who, when customers were few and far between, hastily
’phoned his office partner, “Put all our customers into copper,” to
which his partner replied with grim resignation, “He won’t be down
to-day.”
When the gong rings at three, the day’s work on ’Change is at an end,
and the shouting and the tumult dies. It is then 8 P.M. in London,
and there in the Street hard by the Exchange, even at that ungodly
hour, brokers and jobbers in the “Yankee” market are still at work
in all kinds of weather. “The American market,” says the (London)
_Quarterly Review_, “continues, as a rule, to deal up to 8 P.M. (5 P.M.
on Saturdays), when the cable offices on this side close down. Up to
that time wires are coming in continually from New York with orders
and prices; and a man would be ill advised to undertake jobbing in the
American market unless he has a splendid constitution and lives within
easy reach of town. Every year the Yankee market levies a death-tax
upon its members through the medium of pneumonia and other complaints
brought on by long exposure in the Street after official hours; and
very little is done to provide these late dealers with adequate
accommodations or shelter.”[100]
Before leaving the Board after the official close, the broker will
stop for a moment at the loan crowd to borrow or lend his stocks,
after which he spends a half hour or so in his office, going over the
events of the day with his partners and customers, and familiarizing
himself with the day’s doings. The specialists, floor traders, and
two-dollar men, many of whom have no partners and no office staff, will
go directly home, loitering perhaps for a late luncheon, or something
stronger, at the club upstairs, or at a famous café across New Street.
When times are brisk it is not an uncommon thing for partners to remain
at their offices until a late hour, and clerks are often on duty until
the small hours of the morning, spending what is left of the night at a
nearby hotel in order to save time.
Holidays are not numerous on the Stock Exchange, being limited
to the days set apart by law, and to very rare occasions in dull
times when by petition of a majority of the members a Saturday half
holiday is granted by the governors. It is felt, very properly, that
special holidays should be granted but rarely, because the intimate
relationship of the banks to brokerage houses is such that whenever
the banks are doing business large borrowers should always be prepared
to meet calls that may be made upon them. On the London Exchange, what
with bank holidays and the festival seasons of the Church of England,
the stockbroker has many more holidays than his American colleague.
Life on the Stock Exchange is by no means unpleasant. It is not the
idle pastime that many writers picture it, with easy hours and long
intervals for luncheon, nor is it the depressing and nerve-destroying
centre that many of the members would have us believe. One may
certainly linger over the midday meal for hours--for that matter one
may absent one’s self altogether--and conversely, one may worry and
fret over the day’s vexations until life becomes unpleasant for him and
for every one near him. But by far the larger number find their work as
congenial as earning the daily bread may be, and vastly more diverting
than many of the sedentary occupations in other lines of business.
Elsewhere I have said that the long periods of dulness on the floor
constitute the most serious obstacle the broker has to meet. Accustomed
to physical activity and with a mind inured to occupation, he chafes
under a stagnation that is foreign to his habits and desires, until
worry--the disease of the age--claims him for its own. Almost every
broker’s wife knows what I mean. It becomes a habit with such a man;
unconsciously he grows “bearish” on his business, on himself, and on
his associates, and at such times he is an awful bore.
The essential thing for a man to bear in mind who finds himself growing
into this mood is that nature abhors a vacuum. His mind is empty
because there is nothing to do; he must therefore _find_ something to
do--some mental occupation that will banish from his mind the worries
that beset him. In order to do this many members of the Exchange
carry some light reading in their pockets for use in an idle hour;
at the spot where the National Lead Company’s securities are dealt
in the specialists maintain a compact circulating library of all the
magazines and periodicals; others spend idle moments pouring over a
pocket chessboard; the Reading Railway post has a constantly increasing
collection of all kinds of puzzles, riddles, problems--anything to keep
the mind active on the principle of _similia similibus curantur_.
The newcomer on the Stock Exchange will do well to fortify himself
in some such way, for it may be accepted as gospel truth that the
paralyzing effect of worry in this peculiar environment will inevitably
lead to hasty actions, mistakes, and errors of judgment, unless the
victim learns early in the game how to arm himself against these
misfortunes. One word more: When the day’s work is done, the young
member must learn Doctor Saleeby’s great lesson, that a round of the
links, or a set at tennis, or any other form of outdoor diversions so
dear to the youngster’s heart, will not of themselves suffice to banish
cares.
He has now become a thinking animal; he lives by his wits, and he
suffers from the worries incidental to brain work coupled with
responsibility. I have just said that nature abhors a vacuum--in his
case this especially applies to his mind. Care and worry are not
driven away merely because he has made his “round” in 80 strokes--they
must be pushed out by something else, something more than mere play
or sport _per se_. What he requires is a new _mental_ interest, not
merely to serve as a counter-irritant for the worries of to-day, but
as an investment for all the years that are before him. He must have
a “hobby” of some sort, no matter what, so long as it is a mental
occupation which he does for the love of it--books, pictures, music,
postage stamps--anything will do the trick so long as it occupies the
mind and is done _for fun_. We old timers have only to look about us on
the Board to see who the really happy men are, the men who are never
nuisances. They are the men whose minds are not content with doing
nothing.[101]
In the matter of creature comforts, members of the New York Stock
Exchange have provided themselves with everything that gentlemen
require. Their beautiful building, an architectural masterpiece and
one of the city’s ornaments, has often been described; here it is
sufficient to say that nothing is lacking in the way of conveniences
necessary to the physical ease of the members. Barbers, valets,
messengers, and attendants of every description are on duty; a
well-equipped hospital room is ready for emergencies; showers and
needle-baths, smoking-rooms, lounges, writing-rooms, reading-rooms,
coffee-rooms, and a spacious luncheon club, contribute their share
to the refreshment of the outer and inner man. The luncheon club,
which occupies the whole upper floor, is the last word in culinary
perfection. In the lounging-rooms adjoining are all the magazines
and periodicals, and the walls are covered with a collection of rare
prints of old New York, together with mounted trophies of the hunt
presented by sportsmen members. In other days before the Exchange built
its present structure the club was housed in modest quarters across
New Street and a few non-members of the Exchange were admitted to
membership, but now its facilities are taxed to meet the demand, and
membership is restricted to the Stock Exchange, although guests are
admitted at all hours.
The atmosphere in the city is often trying in the summer months because
of the excessive humidity, and extraordinary measures were resorted to
in the construction of the building to minimize this unpleasantness
on the crowded floor, where the presence of a large number of men
in a greater or less degree of physical animation but adds to the
general discomfort. To meet this condition an air-cooling plant was
provided--the first and the foremost example of its kind in existence,
both in point of magnitude and in the exacting demands involved.
By means of this remarkable triumph of mechanical skill, outer air
at a temperature of say 90° is taken into the basement, eighteen
hundred pounds of water (humidity) are squeezed out of it per hour,
it is purified and cleansed through many walls of cheesecloth, the
temperature is refrigerated down to 60°, and then, after again raising
it to a point at which no dangerous results may affect a member passing
in and out of the room, it is finally supplied to the great floor and
again exhausted by methods that obviate drafts or dangerous currents
of any kind. Aside from the members and attendants, the only person
having access to the floor is the chief engineer who controls this
remarkable air-cooling plant. A wizard in a way, it is curious to watch
him threading in and out of the busy crowds, tasting and feeling the
air which, under the black art of his necromancy, turns intolerable
conditions into others quite delightful.
The history of the New York Stock Exchange has been written many times,
and need be but briefly referred to here. Something approaching an
organization was effected May 17, 1792, when, under a tree which
stood opposite what is now 60 Wall Street, twenty-four “Brokers for
the Purchase and Sale of Public Stocks” signed an agreement to charge
not less than a commission of ¼ per cent. It was a day of small
things; the national debt was but $17,993,000; there was but one
bank in the town. Through the fragmentary data that has survived, we
learn that occasional meetings of the brokers were held during the
next twenty-five years at the old Tontine Coffee House, at Wall and
Water streets. In 1817 the formal organization was effected and the
meeting-place fixed at the Merchants’ Exchange, later the site of the
Custom House, and now the property of the National City Bank. In 1853
the Stock Exchange moved to Beaver Street and in 1865 to its present
situation. The “Open Board of Brokers,” a rival organization, was
absorbed in 1869, and ten years later the “Gold Board” also joined
forces with the parent body.
The development of the New York Stock Exchange in its early days was
but a record of the country’s growth, and this in turn depended upon
speculation. It was, indeed, speculation such as the world had never
witnessed. How our western borders were extended as the railroads
pushed onward; how trade was stimulated throughout christendom by the
discovery of gold in California; how the national debt expanded at the
time of the Civil War; and how, after the war, construction went ahead
at tremendous pace--all these served to fan the flames of adventure
and enterprise, which are the bases of speculation. The panics of
1837, 1857, and 1873, severe enough to give pause to another and less
vigorous nation, seem in the retrospect to have been but starting
points for a fresh development of the national spirit--a spirit which
owes to speculation the extension of frontiers, the bridging of waters,
the unlocking of mountains, and the transportation of wealth. In this
splendid work of conquering a continent the Stock Exchange has kept
pace with the march of industry. It has supplied the one great central
market for the expression of the country’s progress as measured by
the country’s securities, and it will continue to do so as long as an
evergreen faith in America exists among its people.
The Stock Exchange is often defined as the nerve-centre of the world,
and, just as every happening of importance finds an instant effect on
the market, so members instinctively apply to current events habits of
close analysis and nice discrimination. A failure at Amsterdam may
result in liquidation in Atchisons, long a favorite of Dutch investors;
prolonged drought in the Argentine may increase our foreign shipments
of grain; a great engineering project, like the Assouan Dam, may lead
to handsome contracts for American steel-makers; any fluctuation in
rates of foreign exchange must be watched carefully to see if exports
or imports of gold are impending; if a rich man dies possessed of large
amounts of certain securities, sellers must be critically observed
for evidences of liquidation by the heirs; speeches in Congress or in
Parliament, or the unguarded utterances of statesmen, must be weighed
and measured for their effect on the public mind; a great fire may
lead to selling of investments by insurance companies; a revolution in
Mexico may imperil American investments there; if there are political
disturbances in the Balkans, the continental Bourses may be frightened;
every move of the great foreign banks must then be watched closely, for
the bankers to-day are the war-lords of creation, and so every event of
importance the world over makes its impression on the Stock Exchange
barometer.
What is going on in the Transvaal or in Alaska, the latest outbreak
in China, the areas of barometric pressure in the grain country,
the ravages of the boll-weevil, the market in pig iron, the latest
labor difficulty, the tendencies of Socialism, the cost of living,
the outgivings of our law-makers--a knowledge of all these and many
similar matters is a necessary part of the stockbroker’s trade, and
serves to keep his mental activities considerably above the dull level
of mediocrity. Naturally this sort of occupation gives a zest to
life, and makes impossible the sedentary dry-rot which the impatient
broker sometimes thinks is upon him. At any rate no Sherman Law can be
invoked to prevent him from learning all there is to know about men
and affairs; and just as he becomes trained in habits of inquiry, and
proficient in using facts as stepping-stones to conclusions, so he
becomes a valuable and useful member of the community.
Critics in what may be termed the impressionist school--accustomed
to a free, instantaneous, and often meaningless handling of their
subject--are prone to condemn the Exchange because the action of the
market when large reforms in business are impending seems to imply
hostility to those reforms on the part of members. This may be typical
modern impressionism, but it is all wrong. If the market declines
when, for example, a large corporation finds itself at odds with the
law, the downward tendency of the securities affected is the result
of natural laws with which stockbrokers have nothing to do. They are
but agents. Ten thousand owners of securities throughout the land
may simultaneously become alarmed and sell--a familiar psychologic
phenomenon which depresses prices--but to say that this result
expresses the hostility of the Stock Exchange to the enforcement of the
Anti-Trust Law is nothing less than an evidence of critical strabismus.
The men for whom I presume to speak, far from being hostile or
indifferent to the call of revitalized business morality, are quite
as deeply imbued with the potent spirit of business reform as are the
men who make the country’s laws. Careful, well-considered legislation
that broadens and deepens the channels of American development, that
provides adequate supervision and such publicity as will guard against
selfish perversion, is welcomed with gratitude by the Stock Exchange.
Any thinking man ought to see at a glance that the very object of the
Exchange’s existence is benefited by such laws, and prospers with their
enforcement. The Cordage Trust, the Salt Trust, the Bicycle combination
and the Hocking Coal episode are still bitter memories on ’Change; any
law that will prevent a recurrence of these and kindred calamities is
a law that strengthens the hands of every member and gives him fresh
courage.
It would be difficult to find anywhere a more intelligent and
interesting group of men than the members of the New York Stock
Exchange. Some of them are men of peculiar personal charm, others are
distinguished for especial ability in various ways, others are men with
hobbies, nearly every one knows something that is worth knowing, and,
what is better, talks of what he knows in the manner of culture. Given
an idle hour with a wish to learn, and every dip of the net into the
intellectual waters of this gathering brings up some new and delightful
specimen to amuse and instruct.
The dean of the Stock Exchange, for example, who has been an active
member for fifty-five years, and who is now eighty, spends several
months of each year in exploring all the little nooks and crannies of
the globe, remote and inaccessible places that are _terra incognita_ to
your casual tourist. He is a mine of information; to know him means,
in a way, a liberal education. If you are fortunate enough to have an
hour’s chat with him (for when at work on the floor he is quite as
active as any other youngster), you will find yourself in contact with
a traveler of rare charm and culture, who will take you into strange
lands of which the mere existence is but a faint recollection of your
schoolboy studies.
He will tell you, with all his delightfully fresh and buoyant
enthusiasm, of Agra and its Pearl Mosque, and of the surpassing beauty
of the world’s architectural masterpiece--the Taj Mahal--with its
marbles, its mosaics, and its lapis-lazuli. He will take you into
Thibet, the Forbidden Land, through the jungles of the faraway Celebes,
into the least-known corners of the Straits Settlements, and to the
lonely isle of Robinson Crusoe. On his vacation next year he is going
to the Falkland Islands, somewhere down Patagonia way, and the year
after a letter may come from him sent out from the headwaters of the
Yukon, or ferried down the Congo from Stanley Falls. Wherever his fancy
roams, there this adventurer goes; no thought of sickness or danger or
difficulty is permitted to interfere with his delightful hobby.
Naturally, in the cosmopolitan atmosphere of the Stock Exchange tastes
are catholic and run to wide extremes. One of the members is a student
of Russian literature in all its phases; he can tell you of its
folklore, its peasantism, its liberal thought and its ethical ideals
of society; Dostoyevski is his hobby and Melshin the poet. Beside him
stands a man who has mastered the culinary art; the joy of his life
is to prepare with his own hands, for the palates of his fastidious
guests, dainty dishes and wonderful sauces that make an invitation to
his table something worth having. One of the members is an animated
concordance of Shelley, whom he studies with almost fanatical zeal;
another is a disciple of Heine, whom he adores. There stands a man who
went into the heart of Africa as no white man had ever done--through
Somaliland into Abyssinia, thence to Lake Rudolph to hunt elephants,
south to Victoria Nyanza, and finally, after hunting all the wild game
of the district, on foot to the West Coast.
Near by is a traveler fresh from Mukden, the scene of the world’s
greatest battle; he can tell you, too, some curious and little-known
details of the awful engagement at 203-Metre Hill. Our Civil War has
its survivors in a dozen Board members of to-day. One of them was shot
twice at Shiloh and lived to fight the Sioux; another was a captain
under Burnside at Antietam, charged the bridge at the head of all that
was left of his company, and was rewarded for conspicuous gallantry;
another was shot through the lungs at the second battle of Bull Run and
lived through the carnage at Gettysburg; another was thrice wounded at
Gettysburg and again in the Wilderness.
Here are some who charged up Kettle Hill and San Juan Hill in Cuba,
and there are men who served in the navy throughout that war. Officers
of high rank in the National Guard and the Naval Reserve, members of
important public bodies, such as the Municipal Art Commission, the
Palisades Commission, the Public School Board and the various hospital
boards; mayors and other officers of suburban communities, sheriffs
and deputy-sheriffs, presidents of clubs, wardens and vestrymen of
churches, men beloved for their philanthropies, Oxford men, Cambridge
men, Heidelberg men, graduates of all the American universities--with
these and very many more like them, one is brought into intimate daily
contact.
There is a legion of collectors, and these are always interesting
people. One of them “goes in” for old silver, of which he has gathered
a valuable display; many others collect prints, etchings, or paintings;
another takes pardonable pride in his Elizabethan early editions,
particularly his First Folio; another has published a standard work on
the portraits of Lincoln, of which he possesses nine original negatives
and many rare copies of negatives; others devote leisure hours to
collecting porcelains and ceramics of all kinds, postage-stamps, coins,
rugs, and tapestries. You will find here men of bucolic tastes, with
hobbies in farms and extensive country estates, where one grows rare
orchids and another breeds highly prized cattle, or sheep, or horses,
or dogs, or poultry.
As you pause in the day’s work to listen to these interesting people
talking of their pet diversions, you see why it is that hobbies are so
necessary to the modern mind, and particularly to the worried mind of
the Stock Exchange man. You see that the man who has nothing to divert
him in leisure hours is becoming a really rare type, whereas the man of
curious, busy, and active brain, who must have a hobby to be happy, is
becoming more and more common. In this very marked tendency among the
members of the Exchange there has been a great improvement within the
last decade, and one, as I have said, that not only serves to banish
the cares of to-day, but promises to become a valuable investment for
the years that lie ahead.
There are some talented musicians on the floor, men who are not only
proficient themselves, but who by their liberal support of all forms
of music do much to encourage and maintain New York’s supremacy as a
musical centre. Grand opera, the Philharmonic Society, the symphony
orchestras, the choral organizations, and the army of virtuosi from
abroad who have earned applause and money on these shores--all are
accorded cordial support by Stock Exchange members. One of them gives
rein to his altruistic tendencies by providing free concerts once a
week for the submerged tenth in a crowded foreign quarter of the East
Side.
In the realm of amateur sport and sportsmanship the Exchange has
many enthusiastic devotees. There are several tennis champions, one
of them holding a title in singles for seven years, and another a
title in doubles for five years. Famous university oarsmen, football
and baseball players, American golf champions, expert yachtsmen and
commodores of fleets, four-in-hand drivers, polo players, horse-show
judges, breeders and owners of famous stables, racquet, court-tennis,
and squash champions, deep-sea fishermen and disciples of the placid
Izaak, who lure their game from cowslip banks; hunters in every quarter
of the world, motor-boat racers, swimmers, men of muscle and mind, men
of brain and brawn, these are types that keep ever in mind the _joie
de vivre_, the blue sky above, and all the stimulating enthusiasms of
youth.
There is little need to speak of the New York Stock Exchange’s
charities and benefactions, because these are well known. Scarcely a
day passes that some one of the members does not ask of his fellows
a contribution, however small, for a worthy charity with which he or
the ladies of his family have come in contact, and invariably the mite
is freely given, although there may not be time to spare to hear the
story. The private and unostentatious benefactions of members go on at
all times, and cannot be discussed here.
When the _Titanic_ went down, a fund of $25,000 was raised in a day,
and a committee of members of the Exchange was on the pier when the
survivors arrived to do what could be done. The Mississippi floods
met with a similar response; indeed, every great calamity that spells
suffering and sorrow and need finds an instant expression of sympathy
and practical assistance from the floor. In times of national gravity,
such as an outbreak of war, the Exchange will always be heard from
with its volunteers and its funds for equipping a regiment; hospitals,
churches, and all worthy charities well know that appeals are responded
to with a zeal that is alike nonsectarian and generous.
Never in my experience on the floor have I heard a complaint from a
deserving employee of the Stock Exchange. Salaries are wisely increased
with length of service, pensions are given by the governors to aged
servants; hospitals, medical treatment, nurses, and sanitariums are
provided for the sick, and funds are supplied to families of deceased
employees. A spirit of helpfulness, sympathy, and generosity is in the
very air of the Stock Exchange, an absolutely fine spirit that takes
pride, too, in caring for its own members who have been unfortunate.
Finally, let it be said that the Stock Exchange man is human. He knows
the “rub of the green,” he suffers as all men suffer, but he does not
complain, nor solicit odds. All he asks is fair play; a little patient
study of what the Exchange stands for; a little better understanding
of its usefulness in our commercial life; a little recognition of each
man’s effort to uphold a high standard of business honor; a little of
the cordial support which he himself, with stout optimism, extends to
every worthy thing.