The mirror., 1916-12-21
Americas Financial Street
CONTINUED from frs page)

these exchanges their local public utility
stocks and industrials are dealt in. They
quote, Of course, the prices from the big
market and buy and sell stocks in New
York by means OF the private wire system
which we have outlined above, but they do
not make prices on any but purely local
stocks.
1t must also be remembered that the New
York Stock Exchange is not the only stock
exchange in New York City. There are
several other exchanges or markets, all of
which are likewise semi-national in their
spheres of operation. They include the
Consolidated Exchange, the Cotton Ex-
change, the Board of Trade aud last but by
no means least, the Curb Market, each one
of them fulfilling a distinct function of its
own, entirely outside of the sphere of the
big exchange. In passing it may be stated
that the Consolidated Exchange is devoted
to the purchase and sale chiefly of provis-
ions, such as butter, eggs and hides. the
lotion Exchange is devoted exclusively to
cotton and the Board of Trade to trans
actions in wheat, corn and other grains.
These exchanges are all incorporated bod
les, deriving their power from the fountain
head of all legal power-the State. They
have a limited number of memberships or
seats, and in other material and physical
ways are replicas in construction and op-
Grafton of the New York Stock Exchange.
The stock exchange known as the Curb,
however, fills a peculiar niche of its own in
the financial mechanism of Wall Street,
and by reason of the picturesque manner in
which its operations are conducted, is wor-
thy of more than passing mention. We
have said previously that the big stock ex-
change would only list the most git-edged
and seasoned securities. The Curb was
born by the necessity of having market
where that vast quantity of more highly
speculative but in most cases thoroughly
legitimate securities could be bought and
sold. In other words at the present day it
is the laboratory in which the stocks of all
new hotations of any importance are tested
and tried out, and if in the course of time
these stocks assay up to the standard re-
quired by the big exchange, they are finally
listed by it. For instance when the late
J. P. Morgan launched his colossal steel
merger, involving about one hundred mil
lions of dollars capital-an Unprecedented
undertaking at that time but small
amount now considering the revised ideas
of high finance that we have imbibed since
the world war began-at that time the own
ers of the various steel and wire plants
which were bought out and merged into the
trust, were paid for their properties by the
issuance to them of bonds. These bonds
mad definitely ascertained value, as they
were secured by the physical assets of the
component parts of the trust. Then a
large issue of preferred stock, less desir-
able investment than the bonds for the gen.
eral reasons previously mentioned, was put
out and finally the promoters allocated to
themselves large block of common stock,
to repay them for their services. 1t will be
seen at once that the future earnings of the
trust were entirely problematical and any
way that interest must first be paid on the
bonds and preferred stock before the COM
mon could receive anything. AS result
the New York Stock Exchange would not
list these stocks but they were at once listed
on the Curb market, where for a number
of years they were dealt in daily, to the ex
clusion of any other market. The common
sold for long time as low as twenty dol
lars share but now, however, that same
common stock, by reason of the tremen-
dous earning power of the trust, to-day
is selling at away above its par value.
At the present time, therefore, all the Sc
curities of the Steel Trust, called United
States Steel, are dealt in on and quoted by
the big exchange.
This, then, is the usual modus operandi
in the case of new fotations. The Curb
market is literally the goat on which these
new securities are tried out. This was the
case with the Standard Oil stock, which
finally retched the big exchange, and it
had the distinction of returning again to
the Curb, when the Supreme Court of the
United States ordered the dissolution of the
trust into its component parts.
Early every weekday morning, in front
of "a Broad Street, the Broad Exchange
Building, policemen place iron posts in up
right position, so as to form large square,
in the very center of the street. A heavy
rope is attached to the top of each one of
these posts and it is in this enclosure, ex-
posed to the vagaries of the climate both
winter and summer, right out in the open,
under the blue dome of heaven, that this
unique freak market operates. The brokers
who are actually executing the orders on
the Curb, signal the results of their trades
to their confreres, who watch them closely
from the off1ce windows in the low and