Volume Of Business

Stock exchanges keep no official record of transactions on their floor. In New York such records are carefully kept by unofficial chroniclers; but as this is not done in London or on the Continent, comparison is impossible. It is safe to say, however, that in recent years the volume of business done on the New York Stock Exchange has far exceeded that transacted in any other institution of the world. Following is the unofficial record of sales in
that institution during a series of years:

1893
(Stocks) $80,977,000, (Corporation Bonds) $351,854,450, (Government Bonds) $2,143,000, (State Bonds) $3,792,000

1894
(Stocks) $49,075,000, (Corporation Bonds) $339,950,000, (Government Bonds) $4,345,000, (State Bonds) $10,929,000

1895
(Stocks) $66,583,000, (Corporation Bonds) $499,758,000, (Government Bonds) $7,480,000, (State Bonds) $5,583,000

1896
(Stocks) $54,654,000, (Corporation Bonds) $363,158,000, (Government Bonds) $26,494,000, (State Bonds) $2,284,000

1897
(Stocks) $77,324,000, (Corporation Bonds) $529,843,000, (Government Bonds) $10,394,000, (State Bonds) $2,004,000

1898
(Stocks) $112,699,000, (Corporation Bonds) $888,747,000, (Government Bonds) $24,581,000, (State Bonds) $3,642,000

1899
(Stocks) $176,421,000, (Corporation Bonds) $826,711,000, (Government Bonds) $10,582,000, (State Bonds) $2,013,000

1900
(Stocks) $138,380,000, (Corporation Bonds) $569,159,000, (Government Bonds) $7,012,000 (State Bonds) $2,082,000

1901
(Stocks) $265,944,000, (Corporation Bonds) $994,235,000, (Government Bonds) $1,892,000, (State Bonds) $2,502,000

1902
(Stocks) $188,503,000, (Corporation Bonds) $879,749,000, (Government Bonds) $1,378,000, (State Bonds) $3,675,000

Method of Business

Stock exchanges as at present constituted are limited in membership and governed by strict rules which cover both methods of business, rates of commission to be charged, and conduct on the floor. The rules governing methods of business in New York prescribe a minimum commission of one-eighth of one per cent. on the face value of securities purchased for outside customers, one thirty-second of one per cent. for purchases made on account of fellow members, and one-fiftieth of one per cent. for purchases made on the order of another member on the floor.

In London commissions vary from 1s. per hundred to 2s. 6d. per hundred, according to the nature of the security. The Paris agents de change charge one-fourth of one per cent. In New York the Stock Exchange member may both transact business on the floor of the Stock Exchange and solicit business from outside customers. In London these functions are divided between the two functionaries known as "jobber" and "broker," which correspond roughly to the divisions in other English professions, as, for instance, the barrister and solicitor in law. Members of the London Stock Exchange are forbidden to advertise; New York Stock Exchange houses advertise freely. Agents de change in Paris are forbidden to solicit outside business.

Acceptance of a bid or offer of stock makes the transaction official on a stock exchange and binds each participant to the fulfillment of his bargain. Stocks thus sold must be delivered to the buyer by 2:15 P.M. of the ensuing day. The New York Stock Exchange practices daily settlement of such accounts. In London settlements are made fortnightly, the bargain being
carried for the account, that is to say, on credit, during the intervening period.

No security may be dealt in on the Stock Exchange which has not been formally "listed" by the committee. In New York a statement of the company's condition, with a balance-sheet, is required before listing; also proof that proper facilities for transfer and registry of shares have been provided, and that with bonds the mortgage has been properly drawn and recorded. Corporations unwilling to make public statements have, however, been allowed since 1885 to obtain a place in what was called the "unlisted department." Since stocks in this department enjoy all the facilities of "listed stocks," the discrimation has been entirely futile.

Membership Prices and Rules

With the limitation of stock exchange membership title to a seat in the exchange becomes valuable property. In New York the price of Stock Exchange seats has fluctuated with great irregularity. In 1879 their price was $9000; they rose to $20,000 in 1881, and to $37,000 in 1883, but by 1893 had declined to $15,250. From that price they gradually recovered, and in the recent great activity of business reached unprecedented figures. During the "boom" of May, 1901, they sold for $66,000, and subsequently, in 1902, went as high as $84,000.

The price at the opening of 1903 was $80,000. Ownership of a New York Stock Exchange seat does not necessarily imply the privilege of the floor; for that the owner must apply in due form to the committee on admissions. In the London Stock Exchange applicants for admission must be recommended by three members of at least four years' standing, who pledge themselves to the extent of L500 apiece to reimburse his creditors in case of his default within four years. If he is of foreign birth he must have been two years naturalized. In Paris, where the number of agents de change is limited to sixty, an applicant must be proposed by his predecessor or that predecessor's heirs, and must be approved by the governing committee
and the Minister of Finance.

Stock Exchange Seat As Property

Owing to the peculiar personal nature of a member's rights and privileges, the exact legal status of a seat as a property right is not settled in all jurisdictions. By the general weight of authority, however, a seat may be considered as a species of incorporeal property held subject to such rules and regulations as may be adopted by the exchange. This gives a seat an anomalous position in the law of property because of the qualified and restricted character of an owner's rights. As it cannot be transferred except with the consent of the exchange, and to a person acceptable to the latter, it is held that it cannot be seized and sold upon an execution, but it seems settled in most jurisdictions where the question has arisen that a receiver appointed in proceedings supplementary to execution may apply to the court for an order requiring the judgment debtor to arrange for a transfer of his seat to a person acceptable to the exchange, and apply the proceeds to the satisfaction of the judgment.

This may also be done by a judgment creditor's bill in some jurisdictions. Thus, it will be seen that the courts do not assume to proceed against the seat itself, but attain the desired and through their power over the debtor. The United States Supreme Court has held that the rights of a member to his seat in an exchange pass to his assignee in bankruptcy, and the latter may take such steps as may be necessary to compel the bankrupt to procure a transfer of his seat subject to the rules of the exchange. By the rules of probably all exchanges the claims of members must be first satisfied upon the sale of a seat. A seat cannot be bequeathed or devised by will, nor is it strictly descendible, as the person to whom it might be thus given or descend might not be acceptable to the exchange; but the rules generally provide for the sale of a seat on the death of a member to an application of the proceeds to any claims the other members may have against the deceased, and a distribution of the proceeds to his personal representatives. The courts are loath to interfere with any reasonable rules and regulations of a stock exchange and with any action it may take to maintain discipline or enforce its rules, and their aid could probably only be invoked in cases of gross fraud or imposition upon a member.

Discipline

Strict discipline over the conduct of members is maintained by all the larger exchanges. The penalty is suspension from the privileges of the exchange for a given period or expulsion in the case of serious offense. On the New York Stock Exchange these penalties may be imposed for fictitious sales, for trifling bids, for acceptance of smaller commissions than those prescribed by the Exchange, and for "obvious fraud." More recently discipline has been exercised for dealing with a rival exchange contrary to the regulations of the member's own exchange, and for questionable business conduct outside of the exchange. In London the same penalties are made applicable on the general ground of failure to comply with the committee's decision or of dishonorable and disgraceful conduct. the rules of the Paris Bourse prescribe penalties in case the member "does not confine himself strictly to his duties" or "introduces injurious innovations."