Omaha daily bee., 1910-06-12

for income, approximately $4,000 shares Of
stock would have to be bought and sold
IN bona fide manner each day to pay
on the capital invested. But when, at the
end of day, there ts reported total Of
$50, 900 shares bought and sold, that includes
either for themselves or through other
brokers' at 81 q hundred for the keeping of
books on II. The proportion OF total trans
actions contributed thus by traders and
which is of little or no profit to brokers
Will vary, with changing phases OF the
market, but 1t might average through the
have to be a market of 100000 shares, more
or less, to indicate that brokers were do
ing 800, 600 shares day, The year 1903 was
a very active stock exchange year, but
transactions averaged only q little more
than 100000 shares, and, II traders contrib
uted one-halfs there was left an average
of only $50, 900 shares a day for the brokers,
and the commissions arising therefrom
could not have made that year a profit
The simple facts that a stock exchange
seat is worth $4,000 even In very dull times,
and that brokers continue to maintain ex-
tensive establishments and keep a large
capital invested, prove that there is large
potential profit in the stock exchange bust
ness.s The explanation is that an active
stock exchange house does not rely wholly
upon commissions for revenue. AS custo-
dams of their clients balances and as large
borrowers OF funds to finance their clients
speculations, they do what amounts to a
banking business, which, In the aggregate
is sometimes enormous. For instance, q
house whose loans during year would
average 900 might obtain the money
at per cent, and charge Its clients per
cent In which case per cent or s2Oo,O00,
would be profit
That would be an unusual though by no
means an impossible, case. The loans OF
active stock exchange houses run from
SlOOCOOO TO tJ0,OO0OOO, and the broker gem
orally charges his customers higher inter
ests than he pays. This Will suggest what
possibilities there are in the stock ex-
change buiness, when the public Is carry
ing stocks" 1t Is when the public is neither
carrying stocks so as to make the in
terest account profitable, that the stock ex-
change business does not pay. That has
been more the case since the end of Jan
uary last than at any previous time since
the beginning OF 1908, hence the decline
In the price OF stock exchange seats
New York coffee traders fear they are In
DANGER or having their business taken away
from them by New Orleans through dis
~ ,as a. rs l.Sisht rates ana nave taken
state Commerce commission II the rail-
roads do, not furnish relief.
me failure OF recent per cent municipal
loans, the Indifferent success OF the New
York AZ per cent offering, the prolonged
stagnation In the bond department OF the
securities markets-these and other recent
developments In financial circles are re-
sponsible for a belief more or less gen
eral, that money rates are approaching IL
Iney nave NOT already reached perma-
In important investment circles there
seems no disposition to challenge this be-
llet so FAR as accompanying conditions re-
main as they are. But interest rates are
very likely TO actively participate In any
radical readjustment that sooner or later
must develop In commercial Industrial ana
real estate circles. Meanwhile quotakions
OF older classes Of securities have been re-
Iecting the competition OF more rennun-
erative securities.
Total interest and dividend disbursements
IN June by railroads. Industrial and trac-
ton corporations, according 10 the Journal
! or Commerce and. Commercial RuIietin
WIN reach S84,975.7 5s against $50 ,sz7. 094 in
May and N5,3S5.695 In June a year aRo
OF this total dividends wfl cali FOR so
oib,i56l and interest payments for S42 400 600
compared with $50. 6g5 and Sss, 500 900 IN
June last year. ="