Public ledger. [volume] (Memphis, Tenn.) 1865-1893, 1882-03-27
MAtr araEET wAYa.
only One lamb in . DoHeu IA.
cApes tbs ahanlblea and
the sharks.

street takes his money with MIN Whel
he goes out Itis the big operators
the kings of the street, who can ma
nipulate the market, that make th,
money. The small fry simply so i
blind. The few who by good luck d.
pull q competency out OF speculation
are not as rule content to set on
while they may with a whole skin anC
a snug fortune. Stock gambling fasci
mates them. The more they make the
deeper in they get, until some day .
crash comes that sweeps away every
cent.
The only part of the general public
that is reasonably sure to make a profit
in stock speculation are the outside
capitalists, who won't invest q dollar
in stocks except in times Of depression,
when it seems as though the bottom
was dropping out of the market. Then
they buy outright, take their stocks
ont of the street, and wait patiently
for an advance. Sometimes they hold
their stocks a year before they can
realize a good round profit, and it they
happen to buy on the threshold OF
hard times it may be years before they
can sell to advantage. This class Of
operators are content with no profit Of
less than 10 per cent, and usually they
intend to get Is or 20. They are the
most successful of all who buy or sell
in Wall street. Their transactions are
few, but when they take profit it is a
big one.
The great majority Of spectators
trade on the fluctuations of a few days.
Comparatively speaking, their capital
is limited. They speculate on mar
gins, and if the market turns heavily
against them, they are swallowed up
in no time. They speculate on the
theory that while the tendency Of
prices may be upward or downward
to a marked deglee, stocks, as a rule,
fluctuate slightly in their rise or fall.
In an advancing market, as a rule,
stocks will 60 up steadily two points,
waver q few hours, and then decline
one point. Next day they will start
upward again to perhaps two points
and halt, hesitate again, and then
recede, say point and a quarter. 1t
is after each one of these declines that
the average operator makes his pur.
chases. He closely watches the tape
as the market again advances, and
after he has a profit Of two per cent,
or thereabouts, he sells and waits for
another decline before buying again.
Excepting the great manipulatorS
of the market, it is the members Of the
New York Stock Exchange who make
the most money out of speculation.
Many of them never speculate them
selves; they simply buy and sell stocks
for others; and mighty good business
it is if they only do enough off A
few words about their way Of doing
business and how they make their
money may be Of interest.
There can be one thousand members.
and no more, of the Stock Exchange.
The value of a seat depends entirely
upon the state of speculation. When
the buying and selling Of stocks comes
almost to a standstill, as was the case
after the panic of 1873, the price of a
membership drops to 5000, or even
less. 1t is the same, Of course, in all
speculative exchanges A few years
ago a broker in San Francisco had a
snug fortune in his certificate Of mem
bership in the Mining Board. Unfa-
vorable legislation and ruinous mining
ventures killed speculation, and the
price of seats dropped to a few hun
dged dollars. The marvellous revival
Of speculation here within the past
three years has advanced the price Of
seats to about $4,000.
The Stock Exchange is law unto
itself. 1t is not incorporated; it has
no charter or franchise; it has its own
code of government, and appeals to
no tribunal outside Of itself. The
member who should presume to appeal
to court Of law to adjust a difficulty
growing out Of stock operations would
be expelled. The Governing Board
settles all disputes, aRd vigorously in.
Aicts its own penalties for violations
Of the rules of the exchange. Upon
ordinary offenders the penalty Of fines
and suspension may be visited. The
highest penalty is expulsion. One
member was expelled this winter
The sentence of the Governing Boarc
cost him bis seat, worth $4,000
The Exchange prescribes exactly
how member shall deal with his
customers. Inithe first place he mus
charge commission Of one eighth o.
one per cent on every purchase or sale
He is not allowed to charge more mol
less. If he was allowed to fix bis owl
charges, the big brokers could AFFORD
to charge less commission than the
others, and thus the business would
soon be concentrated in few hands
The Board, therefore, protects th,
poorer brokers against the richer
Neither is the broker allowed TO di
vide commissions with anyone who il
able to throw business in his way. TIL,
man who was expelled this winter los
his seat because he split commissions
with a party in Reading, Pa, who wa
sending him country orders.
The commission of one.eighth O
, one per cent is charged on the par val
ne Of the stock. That is, it costs tn
customer no more and no less to bu,
or sell New York Central at 100 tina
1t does to buy or sell Erie at 80. Ii
I either case the commission is sl2 so o.
every 100 shares Of stock. This is til
brokers' first profit, and the amour
paid to them in commissions is some
thing enormous. Yesterday, for in
= stance, the sales amounted to 6OO.O 90
y shares. A small days business wi
Q be at least 100000 shares bought an
: sold on commission. This represent
# a par value of$25, 100000. One-eipht
/. Of one per cent Of this sum is S35.25(
J. So tits seen that over $50 900 is divide
d among the brokers Of the Stock El
, | ahonua -. d.