The semi-weekly miner. [volume] (Butte, Mont.) 1882-1886, 1882-02-22

10 0eC)V0f the SureSt way ana SWlIteS(
secret poison in the world adapted tG
mothers in-law only.
Stock Brokers Methods and Profits
The membership of the New York
Stock Exchange is limited to one tilOl,s.
and seats. A member can sell his seat,
but the sale is contingent on the approx.
al of the purchaser by the Committee
ON Admissions. II the committee reject
his application, which is not . rarv
event, the member desiring to sell must
find another purchaser. The price Ot
seats varies with the state cot business.
At this time it ranges between 81 ,WN|
and $50, 900. During the years Of dc
preston following the panic Of 1873 the
price fell ~ low AZ $5,O0O. Two years
/ ago . member considered himself fOrtu-
nate in being able to sell out for ST. ,OOl.
Three years Of enormous crops, each
larger than its pretIeeessOr-sHch as We
had In the years 1873 St'-caused the
price Of seats on the Stock Exchange tn
believe ARE the highest in the history Of
that institution. Abundant crops make
| fat the New York broker; therefore. it
MAY be understood how important the
''crOp question" is in Wall street. The
Exchange is not an incorporated body.
1t is voluntary association Of in,livi.l-
uals, unknown to the law; having
| neither charter nor franchise; owning
as body allegiance neither tO the State
nor the United States; having its own
courts and code of law which, like
other law cHles, has lx'en the slow
growth Of experience. AL disputes
arising out of transactions on the TX
change must I've settled by appeal to the
tribunals which the Exchange prUvitlcs.
Expulsion is the penalty for an appeal
to the law courts Of the State hy one
member against another in u etOck
transaction. The Exchange has its owl,
ctMlc Of penalties, the highest being ex-
puIsioil. 1t is found sufficient To en-
force entire obedience.
The Exchange prescril'eS all the rules
which govern member in dealing with
his customers. They are very stringent
and most rigitlly enforced. First, he is
required to charge u commission Of ! Of
l,er cent. on every sale and purchase.
He can make no deduction for any one.
He must not ''split commissioner :s it
il called, under pain Of losing his seat.
This rule is enforced with relentless o.
verify, as q protection against unfair
dealing. Splitting IS done sometimes.
hut discovery 10 invariably followed l,y
the intlictiOli OF the penalty. By co'n-
pelling every brOker to charge the same,
the poorer members are protected against
the richer, who, Oh account Of the large
business they 10. could d" it ut lc:ss
rates, and thus in time the whole busi-
ness Of the Exchange would l'c Ino:,"l'-
h~v E..a. oOys Nh
such thing can happen while every
kThc! Of l per cent. is on the par value
q the shares or bonds in whicthc tran.
sactiOn takes place. Thus, it c'sts no
more in commissions, nor no less, to
buy or sell lVO shares q; New York Gem
tral ut 13D than to buy or sell l'U shares
Of Ohio Central u: II. The commission
! il equally $l:.:| for either. This is the
brokers first profit. He is sure "f that,
however the transaction goes. The
customer Is as sure tO have to pay it.
The effect is, on al speculative dealings.
to make the customers lHt Sl:.:5 against
y. For example: 4 buys l'N shares
ni Union Pacific at III and sells 1t rs.
Ue pays $l2.:0 for buying and. $l2.T'
more for selling. AMI his profit i>ther..-
fore So. But suppose, ait,r buying ut
III, he has to- sell al IlG, then he lose.
the l,er cent. ~ the stOcl. a,,l the $!::i
commission tx.>i.i..-Sl!;.
The usual deposit Of margin on Il spec.
u!ativc purchase or sale is ln per cent.
Brokers may bs io.ini VIII" will take
lees, hut they are. :s u rule, not the 'wst
people to deal with. Purchases on mar
gin Of less than 1850 shares are not Gus
! tOl,ary. II is only under eirrlai cir
| c,l,l,stailct< that II rtIN,talie broke: Wiii
take an order for )c.-. While III l"r
cent. il the customary d:l"'>.:. more
may IN. called 10: :"c.I.'ili.; /" cir"Im-
stances, rs in times "i panic or great cx-
element; or When the price "f s'":i> has
been manipulated un t" t'l'h.;;v' iiv-
urcs; or un I; very heavy purchase, ~:tT
~, ,Mi. shares nf "a: kiEd OF s:M'E. IL the
market tur;,c'l against the purchaser.
! such an amount "l ~tocH could not pro-
| tal,Iv hc thrown H. ',,, il witholt break
ing down the price. considerably more
than ~ per cent. IN s,:ih u c&-" TIE
broker would require, say, ~ per cent.
margin.
The StorN r.H::lan-c requires the
broker ~ charge his Gust "I,crIlcr cent.
: ON the money nc lends him to huv the
stock This rule is as rigid a. t!:'
;.ir,,lt the cOn,nis-i"ns. brc"a'i>e the
same effect as charging u reduced cN!n-
mission could !Ic brou:,st h,.' means a.
reduced interest charge. Here com ;
in the brokers S:.cOnG l.IOlIi, namely.
his Gains by interest. The broker inu=:'
charge his customer q yer cent. hu; i.'
=. a. rally iOrrnws the Honey u" irI':-
that customer ut nl,l"!i'lc,s than Il per
cent. Every day in the year, therefore.
that money on cali loans is i ~ l'ian six
per cent, ,an,l most of the ye::i il Is, IL"
irol>cr j, gaining the difference l"'-
tween : per cent. ami l,cactt'.l market
rate on all money h" ha, borrowed anI
lent to hi, Gus. ON, - ai The ii':'c. Ii Is
considered to he Il rule Wiz, t!:r large
houses to make the interest profits pay
the annual working expenses.
OF course, the broker docs not actual
ly pat the money he lends his customer
into his customers possession: but the
| effect ni carrying" the stock for him is
actually the lendin. t" hin OF the Diff
ference between I'll: ~ per cent margin
deposit aud the price at which the brok-
er buys the stock in market. The hr"k-