New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1898-12-24


gotten. For week following the papers were
full Of articles in which it shown that To-
bacco stock had been under masterfui manpula-
ton for over year. All OF the details OF the
story were brought out. and made interesting
reading. 1t was shown how from August, 1917,
to August 1898. the stock had. been forced up
from around so to 100 This was a good years
work. and the big men In the deal no doubt
realized handsomely when they let go Of their
stock But this is only one OF many stories
The history Of the Street is full OF Just slch in
cidents.
only those who members have the right 10
admission on the floor inside the sacred railing.
Here there will be seen numerous little groups
gathered around sign bearing the name IT a
given security. Every part of the room is given
over to some particular security. and transac-
tions between the brokers must be made in the
proper crowd in the presence OF other brokers
who may desire to trade in the stock in question.
The trading in all Instances is governed and
controlled by strict rules, which are rlgidly i'd
hered to. The first bid or offer made has prior
ity until accepted or displaced by a higher bid
or a lower offer. In former days the entire list
OF stocks called off by the presiding officer
from the rostrum. This occurred several tines
in the course Of each days business hours and
thus bids and offers were exchanged The busi-
ness. however developed to such proportions
that this method was abandoned in 1879.
Quite contrary to general belief, the New-York
Stock Exchange is not Incorporated. 1t makes
no reports Of its affairs, keeps no records and
restricts It's management to the careful atten-
ton OF the needs and requirements OF its rrem
bers. Any member can sell or dispose Of his
seat upon the approval OF the Committee on
Admissions. In case OF death a, members scat
is an asset which can be disposed Of by his legal
representatives. The annual dues Of the Tx
change are $50 and whenever a member dies
there is an assessment OF $40 each certi6-
cate, which provides an insurance OF $1,000 for
his heirs. While majority Of the members If
the Exchange are partners in some brokerage
house which gives the firm representation On the
floor. there many who operate for them
selves and are known under The name of room
traders"
HOW BUSINESS 10 CARRIED ON
OF the thousands OF readers Of the daily press
throughout the country there are only n few who
understand the methods by which speculation
and investment are carried on in Wall Street.
The following general description IS from one Of
the leading brokerage firms on Broadway and
at the present time:
For speculative purposes stocks generally
bought margin instead OF paying the full
value In cash. Thus. II the margin Is per cent
OF the value Of the stock. the broker receives
from his client 50 for each share purchased and
supplies the balance Of the money to pay for the
stock holding same until sold Sometimes more
margin is required. when the market is excited,
and when not too active a margin OF per cent
is sufficient.
IF customer buys one hundred shares OF
Sugar Stock at 115 on five points margin. his
broker receives the Sugar certificates and pays
S11 800 to the seller. The broker has received
$500 margin from his customer and he advances
81 600 on the stock certificate as collateral and
charges his customer interest on this amount OF
money. usually at per cent per annum II the
customer is able to sell out later at 100. the
broker receives $4,000 for the certificate. which
shows a gross profit Of $500 to the customer,
out of which Is taken the brokers' commission
and interest at per cent on the amount of
money advanced to carry the stock.
IF, after the customer has bought at us. as
above supposed. Sugar, instead OF advancing.
should decline to about 40. the broker. in order
to protect himself. would have TO sell out the
Sugar stock unless his customer put up more
margin The rules Of the Exchange allow him
to do this when margins about to run out.
In an ordinary market the customers loss could
be stopped at exactly his limit OF funds but In
wild markets the broker might be obliged TO sell
a little before the limit Of funds was reached, so
as not to miss the opportunity.
"Ten Is the lowest number OF shares carried on
margin. The cost at par would be $1,000. A
Der cent rise makes profit OF SO. An advance
of from say 50 to 81 is called ! per cent rise.
and the value of the ten shares has increased
$40 or 800 for each one hundred shares
"The operation Of buying and selling securities
on margin affords unusual opportunities 10 OPP
orators to make profits on transactions where
buying outright and paying spot cash for pur-