Evening star. [volume] (Washington, D.C.) 1854-1972, 1916-01-16

ExcnaHge means great zeal, Dut III does
not mean everything, by a long way.
Never was it more important to pick
out a strong, reliable broker than at the
present time. The big boom in stocks
last fall brought into being so many new
brokerage firms of little or no response
bility that the buyer of stocks must tread
very narrow path indeed if he is to avoid
danger. A witty writer in New York
paper said that only 1000 men reported
this winter for snow-shoveling, as COM
pared with 10000 last winter, because the
other $4,000 had become brokers.
This statement does not apply to the
New York Stock Exchange, where men,
bership is limited by it's constitution to
100. The Exchange has often been
criticized as being monopoly and limit
ing its membership too strictly; but it's
invariable and sensible answer is that it
wants only members who possess financial
responsibility. 1t costs all the way from
$4,000 to $4,000 to become a member
(abOut $4,000 now, and no man can
muster together that amount of money
without being able with rare exceptions,
to pay his bills. The Stock Exchange
takes great care that there is no string
tied to this money, either.
What Is the New York Exchange?
ONE must be very careful not to deal
with a broker who says he is a men,
Der of the "New York Exchange" or a
member of the "Stock Exchange" In
colloquial conversation that may be all
right, but on letter-head it would prob
ably mean that he ran an ordinary bucket
shop-in other words, plain gambling
joint, of which nearly 300 have recently
been driven out of business. OF course,
no man would dare say he was a member
of the New York Stock Exchange unless
he was; but there is no law to prevent
him saying he is a member of the New
York Exchange or of the stock EX-
change, because there are no institutions
bearing those names.
The great advantage of doing business
through New York Stock Exchange
broker-and the same principle applies
largely to members of exchanges in Bos-
ton, Philadelphia, Chicago, Baltimore,
and other large cities is the financial re-
sponsibility of the broker. In other words,
he has money enough actually to buy and
pay for the stocks that you order. An
investor may not send in all the money at
once, or his check may be a day late in
arriving; but the broker has to pay in
full.
The trouble with the host of small
outside brokers, who have multiplied
dozen-fold since the war, is that many of
them have not the resources actually to
buy stocks, are therefore slow in making
deliveries to their customers, and often
have to appeal to Stock Exchange men,
bers to help them out.
The fact that broker is a member of
the New York Stock Exchange does not
guarantee the reliability of the securities
he offers, although it is rarely that such
broker deals in out-and-out fy-by-night,
get-rich-quck shares, as countless outside
brokers do. There is no rule that forbids
such broker offering securities that are
not "listed" on the Stock Exchange, and
such outside securities may be very good
or very bad But the majority of the
business transacted by most members is
in the stocks and bonds actually per-
mitted on the Exchange; and, while all