The Liverpool Standard and General Commercial Advertiser.
Liverpool, Merseyside, England, 1841-12-21 00:00:00

Having thus endeavoured to explain the difference between
the broker and jobber, and confined our attention hitherto
to money transactions, we next proceed to describe the na-
ture of " time-bargains," which form so essential a feature
in stock business. Indeed, the very existence of the Stock-
Exchange, as at present constituted, depends upon specula-
tions in time-bargains, for where there exists a body of 600
members, the actual bond fide business would not be suffi-
cient to provide employment for them all, notwithstanding
the magnitude of the national debt. Time-bargains consist
of purchases and sales of stock made for a certain fixed
period, regulated by the committee. There can be little
doubt that they had their origin in the business which has
always been transacted in the funds during the periods when
the stocks are shut. For instance, Consols usually close
about the beginning of June and December: that is to say,
the transfer books at the bank are shut for the space of five
or six weeks, in order to afford time for the preparation of
the dividend warrants, which are paid in the following July
and January. Hence it is clear that a person wishing to
buy or sell that particular stock during the period referred
to, would' be unable to effect his object ; but in order to
secure the price of the day, he buys or sells the stock "for
the opening " that is, for actual transfer on the day on
which the transfer-books are re-opened. This mode of
doing business is legitimate enough, but this practice has
no doubt given rise to operations of the greatest magnitude,
founded, not on actual necessities, but merely on specula-
tion ; and this method being found .convenient for one
period, has been continued on other occasions, without,
however, possessing the same pretext for its adoption
Periodical dates

we consequently been fixed upon by the
committee, similar to the " opening," at intervals of about
six weeks, making altogether about eight " settling days,"
as they are called, in the course of the year. On these
" settling days " are arranged and adjusted all the bargains
made during the preceding six weeks, for that particular day;
those who sold stock having to deliver it, on the one hand,
and those who purchased having to accept and pay for it, on
the other. But as the majority of the speculators have no
intention of doing either the one or the other,-their bargains
having been of a purely speculative character, founded on
their anticipations of a rise or fall in the value of the securi-
ties, so whatever difference may exist between the price at
which a party commenced his speculation, and that at which
he finally closed it, is settled on this important day ; and his
operations most likely not having been confined to the same
jobbers, but having been effected with several, it becomes
necessary to balance them with the parties concerned, and
much the same process takes place on this occasion as that
practised at the bankers' clearing-house, by establishing ba-
lances between each other. Whatever balance remains un-
settled is adjusted by the names of the bond fide purchaser
of the stock (who intends to pay for it) being passed from
one broker, or jobber, or speculator, to another, until it
comes into the hands of the party who intends to deliver or
transfer the stock, by which means all the intermediate per-
sons through whose hands it passes (the price given by the
purchaser being marked on the ticket) are enabled to close
their accounts with each other at that particular price, and
to pay and receive the differences accordingly. In short, all
transactions kept open until the settling-day must then be
closed, and the party who delays this operation until the last
moment is often exposed to a loss, from the difficulty of
finding others, who, having adjusted their own accounts, are
unable or unwilling to enter into a fresh transaction on this
" day of reckoning," whereby he is compelled to pay some-
thing extra in the price to those who have it in their power
to afford him this facility, in order to enable him to settle
his account.

But as many of the bargains made for this particular day
are really bona fide transactions, the stock bought and sold
being, in point of fact, delivered by the actual holder, and
taken by the new purchaser, let us briefly explain how this is
effected. This progress is one of daily occurrence, and is not
necessarily confined to a settling day, although on such
occasions it usually amounts to a considerable item, from its
having extended over a wider period. In either case, how-
ever, the following is the way in which the matter is settled
between the broker and his principal, who has sold stock :
The broker usually passes his check for the proceeds of the
sale to his principal, taking the precaution of crossing it—
i. e., writing a banker's name across the check. When,
however, Bank of England notes are demanded in lieu of
crossed checks (as is sometimes the case), the bargain is
made accordingly. In this case, the jobber who buys the
stock provides them either by borrowing of those who happen
to have large balances at their bankers, or from their own
private bankers. The notes so borrowed by the jobber are
then paid over to the broker, and by him to his principal.
This operation is, however, seldom resorted to by men of
business where there is no reason to doubt the credit of the
party drawing the check.
The jobber, on the other hand, having sold the stock to
some other broker, who buys for his principal, receives, in
return, his check ; so that, by this simple process of passing
four checks, viz., that of the purchaser to his broker, that
of the broker to the jobber, that of the jobber again to tie
broker who first sold the stock, and that of the latter to his
principal, the whole transaction is completed.
To advert to another technical peculiarity appertaining to
the Stock Exchange, which may appear puzzling to the un-
initiated. The terms " Bull" and " Bear" are doubtless
familiar to most even of our country readers, without their
being aware, probably, of their meaning. A Bull is one who
speculates for a rise, whereas a Bear, on the contrary, is he
who speculates for a fall. The " Bull" would, for instance,
buy £lOO,OOO, Consols for the settling-day, or, as it is
technically termed, " for the account," with the object of
selling them again during the intervening period at a higher
price. The " Bear," on the- other hand, would sell the
£lOO,OOO stock (which, however, he does not possess,) " for
the account," with a view of buying them in for the purpose
of balancing the transaction, at a lower price than he origi-
nally sold them at. In stirring periods, when fluctuations
of 4 or 5 per cent. often occur during " one account," vast
profits may be realized, or equal losses sustained, by these
gambling operations.
The proceedings of the Stock Exchange are regulated by a
committee consisting of 30 members, who are elected from
the general body every Lady-Day, each member having one
vote. They take care that the rules and regulations enacted
for the admission and expulsion of members, and for the set-
tlement of disputes, are properly observed, and although some
of their laws are at variance with the established laws of the
country, they are not so strictly enforced by the committee
as to bring them into collision with the courts of justice;
they fully answer the purpose for which they were intended,
and all members previously to their admission subscribe to
the conditions there laid down.

All members, on being admitted, are obliged to produce
three securities of £3OO each, for the first two years of their
probation, which £9OO becomes forfeited in the event of their
failure, and goes to the creditors of the new member. In
consequence of their being interdicted from engaging in any
other business, on becoming a member of the Stock Ex-
change, they are no longer subject to the bankrupt laws, andf
therefore, in the event of failure, all their assets are secured
to the creditors in the home, to the exclusion of those out of
it. This rule is enforced in order to secure the house fiom

the loss which would ensue to its members, were the legal
creditors (if any existed) to step in and lay claim to their

property

_
The tendency of the above regulation is to insure honesty
amongst its members. Should any principal have reason to
compiain, he has only to appeal to the committee, who in-
stantly take cognizance of the matter, and subject it to the
strictest investigation. Defaulters whose conduct has been
dishonourable are punished, and an example is made of them
by publicly affixing their names in the house on what is termed
the "black board;" this is the heaviest disgrace which a
member can possibly experience.

FROZEN WINE AND ALE.—In the year 1809 the frost evas
so extremely intense in Scotland, that frozen ale was sold by
weight. The same singular occurrence happened also in the
reign of James the First, when both wine and ale were sold
by weight in a congealed state.