The Republican. [volume] (Oakland, Md.) 1877-current, 1885-02-21
STOCK GAMBLING.
How Transactions in Shares are Managed
in Wall Street.

In view of the fact that Wall Street
men confidently expect a boom after
long spell of dullness, this is good time
to describe the methods of brokerage,
which are about as mysterious to most
people as the manner of faro or roulet.
In ordinary brisk times the Wall Street
brokers make more money and make it
easier than any other set of professional
men. To do a legitimate brokerage
business does not necessitate the slight
est risk, nor does it imply that the bro
ker must in any way become a specula-
tor. As business is conducted on the
New York Stock Exchange the broker
simply lends the money to his customer
with which to purchase stocks, and then
does the buying for the purchaser. The
customer makes part payment, which
is called margin, and that insures the
broker against loss through the depreci-
alton of the property purchased. An
erroneous impression prevails that there
is no genuine transaction in stocks when
York Stock Exchange, but that the
whole is fictitious. This is true of some
of the grain marts, but in the Stock
Exchange the stock certainly Is bought,
paid for and delivered, and NAV be
transferred into the name of customer
on the company's books. That is one
reason why the transactions of the bro
kerS become so enormous and why so
much capital is required to carry on a
brokerage business. A broker who buys
100 shares of Lackawanna at 80 gives
hisl check for $4,000 to the broker
who sold it, and gets the stock certiti-
cate in return. If he buys 1000 shares
he pays 100000 for it. In other words,
he gives 800 share. 1t brisk times the
big stock brokerage houses do 10000
shares a day, and give checks or take
checks for S2,000,000. They need not
have that much capital, for the sales
and purchases, as rule, about balance
one another; and the total of the checks
received equal the total paid out. The
purchase of stocks is a very simple pro-
cess, although to the world at large
there is about it enough of the hidden
to make it deep and fascinating mvs-
terry. 1t is notable that genuine brokers
rarely retire from Wall Street unless it
be because they have accumulated large
riches or have grown too old to do the
work. The reason is that it is very
profitable business. A very few Gus
toners will keep a broker going. The
commissions are large. To buy and
sell 100 shares of stock the broker
charges the customer S25; to turn 900
shares, $3.50. The good houses that in
brisk times trade in 10000 shares a day
get $4,000 for doing so. For weeks and
for months in the booming times of
1SS0-'Sl the daily transactions on the
Stock Exchange amounted to 100000
shares. On this the commissions were
the enormous sum of 1928. 600. As
there are !, 100 members of the Exchange
it is plain that the average profit to each
was something more than 500. 1t is
very easily earned, but capital is re-
CURED, first to purchase a Stock En-
change seat, and then to pay in full for
the stocks which the customers buy.
The greatest trouble is to get the GUS
toners. While very many business and
professional men speculate in Wall
Street, they are careful not to let the
fact be known. 1t is hard, there
fore, for broker to drum up custom.
TO openly solicit it in business houses
or social gatherings would be to
meet rebuff at every hand. 1t is
only through gaining extensive ac-
craftsmanship and through advertising
that brokers get new customers But
once gotten, a customer who will trade
in few hundred shares of stock in a
day, or even a week, is indeed a bo-
nanza. Every 100 shares means S25 to
the broker, as already explained.
Yet there are hundreds of spectators
in the street who trade in 5000
to 10000 a week. Hosts of Wall Street
brokers have had the command over
themselves to abstain from specul ating
on their own hook, when they must
have known that the market was
sure to % in a given direction. These
are the men who grow rich with great
rapidity. They are calm and cool
headed in every emergency, while their
brother brokers are wild over prospect
i've losses or reckless over possible
gains. They are content to take COM
missions and let the spectators run the
risk. The cool-headed broker has a
sure fortune if he will only avoid specu-
lation on his own hOok-that as a rule
means ruin to every one, be he broker
or customer, who undertakes it. The
brokerage firms who get the business of
the big men of the street have the big
gest bonanzas of all. To make a sue
cessful movement in stock it requires a
purchase or sale, or both, of vast
quantity of stock, for which the oper-
ator must pay commissions in full.-M
Y. Cor. Chicago Tribune.
CHAPI EFT EENEp