CHAPTER XVI. From a Social Point of View

FROM A SOCIAL POINT OF VIEW

Other publications besides those mentioned in a previous chapter frequently emanate from the Stock Exchange, but these are not, as a rule, of an official character, nor even of a business character. The members at times lay down their dealing books and pencils to turn to literature of a more generally popular order. They have produced many a book, mainly in the cause of charity. Such, for instance, is "The House Annual," recently inaugurated. This is a sumptuously produced volume of light stories, sketches, and articles, handsomely illustrated. It is edited by a member of the Stock Exchange, and many of the contributions are made by members, although its tasteful pages are not closed against the work of eminent writers and artists outside the House. It is sold in the Stock Exchange at Christmas time to provide poor children with dinners. A most remarkable volume, or rather, couple of volumes, produced entirely by members of the Stock Exchange unassisted, issued for the same branch of charity, were entitled "The House on Sport." The first contained articles on home sports, all written by members of the Stock Exchange, and yet all written by authorities who would be acknowledged as such throughout the world. Cricket by Mr. Gregor MacGregor, boxing by Mr. B. J. Angle, golf by Mr. Mure Fergusson, cycling by Mr. George Lacy Hillier, rowing by Mr. F. I. Pitman and Mr. S. D. Muttlebury, sculling by Mr. Guy Nickalls, and so on with no fewer than forty branches of sport. Such a volume might have been considered sufficient to indicate the sporting proclivities of the Stock Exchange, but it was followed a year afterwards by another compiled in the same way with the same objects, containing articles on sport abroad--lion, elephant, and rhinoceros shooting, big horn hunting in the Canadian Rockies, wild sheep hunting on the borders of the Sahara--all the articles contributed from personal experience by members of the Stock Exchange.

The institution undoubtedly possesses the distinction of being the most athletic body of business men in the whole world--when it walks it sets the world a-walking. It holds its own small race meeting every year, furnishes county cricket captains, international football players, and so on.

It is doubtful, however, whether the members enjoy these organised forms of sport more than they enjoy the impromptu games within the walls of the House itself on slack afternoons, with all the practical jokes which are found for idle hands to do. Cricket with walking-sticks and paper balls, football with a tall hat, a lighted newspaper under the seat of a dozing jobber, sweepstakes and raffles, a labelled back--all these things are common enough. Sometimes the spirit of play is closely linked with the spirit of business; when, for instance, a susceptible member is induced by his conspiring friends to deal in Chartered Second Debentures, or some other stock which does not exist, only to find, when he has made something like a fortune or half ruined himself, that all bargains are of necessity off. The Stock Exchange has many fixed holidays during the year--they include not only all the Bank Holidays, but also the first days of January, May, and November--and some unfixed holidays on summer Saturdays, but the members do not await official leave to play.

The institution has its own Orchestral and Choral Society of about 200 members, which has been established twenty years, gives a series of subscription concerts each season, and is quite an acknowledged factor in the musical world. There is an Art Society, also a Christian Association, with a roll of members comprising some 250 names; and in the Christian attribute of charity the members of the Stock Exchange as a body are ever to the fore. Beginning at home, there is a Benevolent Fund as old as the Stock Exchange itself, for the benefit of members who fall upon troublous times. It has a capital of nearly a quarter of a million sterling, and an annual income which, although it varies in accordance with the prosperity of the times, has recently been over £20,000. There is also a Stock Exchange Clerks' Provident Fund that has been in existence about forty years, its income of about £2,000 a year comprising the subscriptions of those clerks who are members of the fund, and donations and subscriptions by members of the Stock Exchange. There are about 1,500 members, and grants are made from the fund in out-of-employment cases, in cases of illness and of death, and when there are any special calls.

But the charity of the Stock Exchange by no means ends at home. To use words recently written by a Lord Mayor of London, "the spirit of loyalty and patriotism which has ever characterised the members of the House is especially exhibited in practical and overflowing sympathy in times of distress and anxiety." Those words were written in acknowledgment of the receipt of a sum of nearly £35,000, which the members of the Stock Exchange had subscribed to the Mansion House Fund for the relief of the widows and orphans and other sufferers by the Transvaal War. They had subscribed over £20,000 to the Transvaal Refugees' Fund, and gave not only of their money but of their blood in the cause. One member returned from the field with the Victoria Cross. The Stock Exchange supports its own hospital wards, its own lifeboats, its boys' home, and so on.

Except in the vague idea of the puritanical faddist, the Stock Exchange is an institution as lovable as it is fascinating. It may be, and often is, the cause of ruin to those who abuse its facilities--to those who are gamblers rather than either investors or speculators. It is quite easy to draw the line between the three classes of business, or rather, the two classes of business and the one class of folly. The investor lends his money on perfectly safe security to the aid of commerce and industry, expecting a comparatively small return, but that a safe one. By so doing he is encouraged in thrift, whilst commerce and industry enjoys the benefit of the capital, and the Stock Exchange is the medium of it all. The speculator, less conservative, risks money, the loss of which he is perfectly well able to afford, in the furtherance of experiments in commerce and industry, be it the trial of a patent or the opening up of a mine. He expects a big return should the experiment prove successful, but is prepared to face the loss should it turn out otherwise. He hopes to enrich himself, and without his aid commerce and industry would make none of those rapid strides which are for the welfare of the world, for speculation is the handmaid of enterprise. The gambler, frequently usurping the name of speculator and thus bringing legitimate speculation into ill-odour, risks money which he cannot afford to lose, staking all in an inordinate desire for riches. Although the line between speculation, which is perfectly legitimate, and mere gambling can easily be drawn, it must be drawn by each individual for himself. A perfectly legitimate speculation for a rich man might be an act of folly for a man of moderate means. Between risking money which can easily be afforded in a project well studied and thought out, however uncertain, and risking money which cannot be afforded in a project of which nothing is known, on the chance that some extraneous circumstance may arise to multiply its value, there is a wide gulf fixed. The gamblers it is from whom are drawn the operators and dabblers who play with the Stock Exchange as they would with a pack of cards, or with the chances of the race-course, to their own loss and to the profit of insiders who, whenever they are called upon to play such a game, always show in the long-run that they know most of it. It is the Stock Exchange gambler rather than the investor, or the speculator who moves legitimately within his means, who may rejoice in the boom with its roaring business and rising prices, but who forms the real element of danger in a slump with its sudden depreciation, and who frequently turns the slump into a crisis, and eventually into a panic. These panics are less frequently with us than they were, less widespread and less disastrous in their effects, thanks to the rapid dissemination of true news, and to the highly organised state to which the machinery of finance has attained; but they will ever recur to provide a wholesome check to those who are tempted to go beyond their depth, allowing legitimate speculation to deteriorate into mere gambling. The Stock Exchange offers facilities for such gambling, just as food offers facilities for over-eating; yet food is not only a good thing, but a necessity, and so is the Stock Exchange.

INDEX

Advertisement by members, 42 outside brokers, 43

Allotment, dealings before, 98-100 Royal Commission on, 133, 137

American prices, 156

Apprenticeship of members, 18-19 Royal Commission on, 127-8

Arbitrage firms, 156

Architecture of the House, 7

Art Society, 164

Athletics, 162-3

Backwardation, 69

Badges for clerks, 25

Banging the market, 71

Bank of England, Stock Exchange in, 43, 142-3

Bankruptcy of members, 102-3

Bank shares, dealing in, 145

Baring crisis, 147

Bar of the house, 9

Battle of Throgmorton Street, 148

Bearer bonds, 88

Bearer securities, settlement in, 61

Bears, 65-71 definition, 67 cornered, 71 covering, 71 raid, 71 their effect, 70

Benevolent Fund, 164

Boom, 167

Brokerage, 39-41, 49-50 Royal Commission on, 132

Brokers, 32-44 advertising by, 42 commission. See Brokerage duties of, 150-60 licensing of, 136, 139, 146-7 list of, 43 outside, 43-4, 121 price lists of, 119 underwriting by, 41-2 and jobbers, disputes between, 36-7 firms acting as both, 37

Bucket shops, 121

Bulls, 65-71 campaign, 70

Bulls, definition, 67 stale, 71 their effect, 70

"Burdett's Official Intelligence," 146

Business, how it is transacted, 45 done, record of, 117-18

Buying in, 61 manager, 30

Capel Court, 6 Stock Exchange established in, 141-2

Capital, organisation of, 3-4 of the Stock Exchange, 13

Carry-over, 51 process of, 67-9

Certification of transfers, 54

Change Alley, Stock Exchange in, 65, 139, 140-2

Charity, 161-2, 164-5

Checking bargains, 48, 151 room, 8

Christian Association, 164

Clearing house. See Settlement Department

Clerks, 23-5 provident fund, 164

Closing time, 119, 157

Commission. See Brokerage

Committee, the, 26-31 election, 26 meetings, 28 powers, 27-8 qualification, 27 Royal Commission on, 126-7

Companies Acts, 145 Committee on, 146

Consols, put option on, 73-4 put and call on, 76-7 transfer of, 85-7

Consol settlement, 56

Contango day, 57 rate, 68-9

Continuation. See Carry-over

Contract note, 48-9

Cost of the House, 13

Coupons, 88

Covering by bears, 71

Cumulative preference shares, 93

Debenture stocks, 91-3

Debentures of the Stock Exchange, 14

Defaulter, 60, 101-8, 131 assistance forbidden to, 101 declaring a, 102 and clients, 103-6 readmission of, 106-8, 131

Deferred ordinary shares, 94-6

Definitions of the Stock Exchange, 1

Differences, speculation for, 50 payment of, 60

Directory of members, 124

Discount, 115

Dividends paid by the Stock Exchange, 16-17

Drawings of the interior, 8

Dual control of the Stock Exchange, 30 Royal Commission on, 126

Employees, dealing for, 50-51

Entrance fee for members, 21, 25 authorised clerks, 23 unauthorised clerks, 24

Establishment of the Stock Exchange, 141-2

Exchange Telegraph Company, 121-2

Ex dividend, 115-16 rights, new, all, 117

Expulsion, 28

Failures. See Defaulter

Fixed charge stocks, 92

Foreign Loan Exchange, 142

Foreign Loans Committee, 146

Foreigners, exclusion of, 18

Founders' shares, 96-8

Gambling, speculation, and investment, 130, 165-8

Garraway's Coffee-house, 139

Gorgonzola Hall, 7

Guarantors for new members, 20

Hall of Commerce, 144

Hammering, 102

Hammer price, 103

History: a sketch, 138-49

Holidays, 29, 163

"House Annual, The," 161

"House on Sport, The," 162

Incorporation proposal, 135-7

Inscribed stocks, 85-7

Interior of the House, 7-13

Jobbers, 32-44 as specialists, 34-5 abolition question, 129

Jobber's turn, 47

Jonathan's Coffee-house, 140-41

King's visit, 8, 146

Lame Duck, 65, 71

Leeman's Act, 145

Library of financial documents, 123-4

Literature, 161-2

Making a market, 113 Mr. Justice Wright on, 148

Making a price, 44

Making-up day, 57 price, 67-8

Managers, the, 14

Markets in the House, 9-12

Marking prices, 48

Members, 18-25 admission, 20-21 apprenticeship as clerks, 18-19, 25 directory of, 124

Membership restrictions, 18-19, 22

Mining Contango day, 57

Name day, 51, 57

National Debt, 138

New House, the, 146

Official Assignees, 102, 104, 106

"Official Intelligence," 123

"Official Intelligence," predecessors, 146

Official List, 29, 109-10 growth, 5 magnitude, 34 marking prices for, 48 quotation in, 110-15 Royal Commission on, 133-5, 137

Options, 72-83 call, 72, 74 day-to-day, 79 effect on the market of, 83 operating on, 80-83 prices for, 77-9 put, 72-4 put and call, 73, 75-7

Orchestral and Choral Society, 164

Ordinary shares, 94

Overend-Gurney crash, 145

Panics, 144

Par, 115

Partnership prohibition, 33

Photographs of the interior, 8

Play in the House, 163

Population of the House, 18

Practical jokes, 163

Preference shares, 94

Preferred ordinary shares, 94-6

Premium, 115

Prices, double, 45-6 marking, 48 wide, 46-7

Price lists and records, 109-24 brokers', 120

Proprietors, the, 13

Prospectuses, 112-15

Provident Fund, 164

Public admission question, 131-2

Quotations. See Prices

"Railway Intelligence," 146

Railway mania, 144

Registered securities, 87

Rigging the market, 70

Royal Commission, 125-37

Royal Exchange as the Stock Exchange, 138

Rules, 27-8, 142

Scrip, 100 settlement in, 62

Secretary of the Stock Exchange, 15

Secretary to the Committee, 30

Selling out, 51-2, 61

Settlement, the, 56-64 office work of the, 159-60 special, 62, 98

Settlement department, 58-60 establishment of, 145 manager, 30 Royal Commission on, 129

Settling room, 8 clerks, 24

Share, definition of, 1-2, 84 certificate, 53-5

Share and loan department, 54 manager, 30 removal, 149

Shares of the Stock Exchange, 16

Shorter's Court, 119-20

Situation of the house, 6-7

Slump, 167

South Sea House as the Stock Exchange, 139

Speculative business restrictions, 50-51 made illegal, 140

Sport, 162

Stags, 66-7

Stamp duties, 49

Stock, definition of, 1-2, 84 certificate, 53-5 inscribed, 85-7

Strangers in the House, 8

Street markets, 119-20 battle of the, 148

Subscription for members, 21-5 authorised clerks, 23 unauthorised clerks, 24

Superintendent, general, 15

Talons, 88

Tape prices, 12, 121-2

Telephone, use of the, 154-5

Tickets, 51-2, 57-9 for inscribed stocks, 86

Ticket day, 51, 57

Transfer, 52-5 of Consols, 85-7

Transvaal War Fund, 165 Refugees' Fund, 165

Trustees and Managers, the, 14

Trustee stocks, 89

Turn, jobber's, 47

Underwriting of capital, 41-2

Vendors' shares, 98

Waiters, 12, 102

Wares of the Stock Exchange, 84-100

"Weekly Official Intelligence," 122

Wide quotations, 46-7, 118

x d, 115-16

Transcriber's Notes:

Missing or obscured punctuation was corrected.

Typographical errors were silently corrected.