Stock Exchange
2 of the 7 encyclopedias on this shelf carry an entry for Stock Exchange. Both are reproduced below, so you can see where they agree and where they differ.
Collier's New Encyclopedia (1921)
a place and institution where securities are sold and purchased. In its origin it was, as the name implies, merely a place to buy and sell, and as such has had its place in the history of every town and city since men began to barter with each other. In its early history it merely represented an agreed on locality where peo people could conveniently meet, but the desirability of an enclosed space soon became apparent and in some places, Paris among them, buildings for the convenience of those who desired to use them were erected at the public expense. In course of time the management became organized and rules were made for the enforcing of agreements. The more wellto-do negotiators formed organizations which admitted new members only on the fulfilling of certain conditions. The opportunities afforded of making money made admittance to the organization highly profitable. Modern trading, national and international, has elevated the Stock Exchange as an institution to an importance such as it never held before , and in the capitals of the larger countries transactions of enormous put through each day. The Paris Bourse long held the position of importance in Europe, but later the Stock Exchange in London, lovalue are now cated in the capital city of a great empire, which the facility of intercourse made possible by modern invention has made communicable despite the barrier of great distances, began to occupy the paramount position. Dealing almost entirely in home securities at first the London Stock Exchange began a little more than a century ago to operate in the shares and certificates of other countries. These dealings increased as it became a practice to seek loans in London, and in course of time private securities , such as those belonging to railways, began to be handled along with government stock. Towards the end of the nineteenth century industrial stocks made their appearance in the trading and methods for transferring the stock of mining and similar companies from the promoters to the public began to be developed along lines that did not always prove legitimate. In the New York Stock Exchange the principal part of the trading was from the beginning in railway stock, for the institution rose to importance in an era of great expansion in the railway systems of the country. In recent years following the practice in European countries industrial stocks have figured largely in the New York Stock Exchange, and their introduction signalized a tremendous development in the amount of business conducted. Foreign securities did not assume proportions of importance in the New York Stock Exchange till the opening of the recent great war. American industrial expansion was so great as to be quite enough to attract the attention of brokers, but the early years of the European War and the requirements of European countries could not but have its influence in the United States, and the dealings on the New York Stock Exchange reflected the importance of the transactions that were being made in the United States and other countries at the instance of the belligerent powers. On the other hand government bonds have never figured conspicuously in the dealings of the New York Stock Exchange , agreements relating to them being managed in the main outside of the exchange. This applies also to the foreign government loans that have been negotiated from time to time in the country before the war and during it. The exchanges of the various large cities in the United States have built up traditions of their own which have arisen from the distinctive requirements of their local business interests. Boston has had an important hand in the control of copper- The Philadelphia mining companies. Stock Exchange has all along held importance as the trading center for streetrailway securities, and other exchanges throughout the country are regarded as the convenient market for certain welldefined securities in which the local capitalists for one reason or another have interested themselves and their communities. The stock exchange, as the institution is viewed in the modern sense, may be said to have had its origin at the period of the creation of public debts in the seventeenth century under the system which has since continued to be employed. The incorporation of the East India Company in London is an early example of the raising of public money for corporate purposes through the medium of the Stock Exchanges. In the first quarter of the eighteenth century speculation in the South Sea Company in London habituated the public to investing in such enterprises. In that period in London trading was conducted through independent brokers who resorted to certain well-defined localities but who were not formed in a corporate union. Concentration of business caused the erection of the London Stock Exchange Building in 1801. The members of the New York Stock Exchange had to wait till 1865, before a building was erected to house them independently. The Civil War added greatly to the development of the New York Stock Exchange, and operations largely in that period centered round the competition of capitalists interested in the New York Central railroad and the Erie railroad. Since that time to the present the business on the exchange has been an accurate reflection of the business trend throughout the country. From 1869, the date of the completion of the two transcontinental railways, speculation in the shares of these railway companies grew. James Fisk, Jay Gould, Daniel Drew, Cornelius Vanderbilt and their associates began to attract national attention by the importance of their trading through representatives on the exchange. The crises, the booms, the panics, the tides of prosperity and their reactions have had their reverberations in the exchange which has served as a mirror indicating the steps in the business progress of the country. The great undertakings in the direction of railway building led to frequent issues of securities the New York Stock Exchange, on though the increase of business was not always uniform. The panic of 1893 and the panics that preceded and followed it led to curtailment of business in New York. The year 1898 was marked by a financial recovery that was reflected in a considerable development in the New York Stock Exchange. In that year the rich harvests of the United States coinciding with a period of great scarcity in Europe, the increase in exports and in manufacturing threw into relief the great volume of America's available wealth and fostered confidence in the potentiality of the country such as had never before been known. Capital began to pour into enterprises of all kinds and industrial shares began to multiply on the exchange. In 1901 the renewed confidence added greatly to the volume of speculation, and records of every kind in Stock Exchange history began to be surpassed. Purchase of stock compar companies by other companies which pledged their credit to raise funds began to be the rule. The movement ended in the Northern Pacific corner of 1901 when rival specиlation forced its shares to the price of $1,000, the stock only a little previously having never exceeded the $100 figure. The unstable figures could not last and a tremendous collapse of prices followed. Recovery was speedy, however, and prices rose rapidly. The events leading up to the corner educated speculators to the possibilities which the rivalries of purchasing companies might bring about. In recent years the volume of business done on the New York Stock Exchange has greatly exceeded that of other exchanges. The m membership and methods of business in stock exchanges are now limited by strict rules. Minimum commissions in New York are one-eighth of one per cent on the face value of securities bought for outside customers. Only securities listed by the committee can be dealt in. The prices of seats have ranged from $9,000 to more than $100,000. Penalties for breaches of discipline involve expulsion or suspension for stated periods from the privileges of the Exchange. Fraud, fictitious sales, and_acceptance of smaller commissions than those indicated in the rules, are among the offenses most guarded against. A plan of clearing Stock Exchange transactions on the system of a bank clearing modern development in house is a America, though used in Europe, and particularly in Germany, since the middle of the last century.
Aiton's Encyclopedia (1910)
an association organized to provide a market for bonds and stocks. The leading stock exchanges of Europe are the London Exchange, the Paris Bourse, and the Berlin Borse. There are many others, as at Vienna, Hamburg, Frankfort, Manchester, Glasgow, etc. In this country there are exchanges at New York , Philadelphia, Boston, Chicago, Pittsburg, Baltimore, Cleveland, Cincinnati, Detroit, New Orleans , Denver, Indianapolis, San Francisco , Washington, Kansas City , Los Angeles , Providence, and Richmond. There are also exchanges at Toronto and Montreal in Canada. So far as the volume of business goes, the New York Stock Exchange is not only the largest on this side of the Atlantic but the largest in the world. The sales of stocks amount to $15,000,000,000, and of bonds to $1,000,000,000 annually. This exchange may be described as typical. It has grown rapidly. As early as 1752 a few business men used to meet informally under a tree on Wall Street near Pearl. In 1792 an association was formed to maintain a uniform rate of commission. The present exchange was organized in 1817. It occupies a building of its own on Broad Street. The exchange is no place for a poor man. The membership of the New York Exchange is limited to 1,100. Vacancies may occur through death, bankruptcy, resignation, or expulsion. A seat may be sold like any other piece of personal property. Membership is known as a "seat upon exchange." Between 1885 and 1910 the price of a seat has varied from $34,000 to $81,000, with one drop in 1896 to $13,000. The prospective member must be a citizen of legal age, he must secure the approval of two-thirds of the members of the committee on membership, and is required to pay an initiation fee of $1,000. Members who buy and sell for others are known as brokers. Those who trade on their own account may be termed operators, but there is comparatively little business done at first hand. Large traders prefer to deal under cover of a broker. The charge for selling or buying is known as brokerage or commission. A uniform rate is prescribed. The commission for buying or selling 100 shares of the par value of $10,000 for an outsider is $12.50. The charge for performing the same service for a member whose name is withheld is one-fourth that amount. A member trading for a member whose name is given up charges but $2 per $10,000. Bankers seek membership to cut down the cost of brokerage. Brokers accept orders from any responsible parties. They are in business for that purpose. Business is done on the floor of the exchange in an informal way. There is a chairman, but his duties are confined to declaring the exchange open and to making announcements, such as the insolvency or the death of a member or a call for a business meeting. Members are admitted every business day at 9:30 A.M., Trading begins at 10 o'clock; 3 P.M., or on Saturday 12 M., is the closing hour. There are several "posts" or boards on which the prices and transfers of the more active stocks are posted by an attendant. Business is done chiefly in front of the posts. Prices are made in fluctuations of one-eighth of one per cent. If a broker hears no reply to his offer of Rock Island Preferred 483/8, he may call again at 48 1/4, amounting to a drop of $12.50 per $10,000, but he must drop by the prescribed fluctuation, one notch at a time. A hundred telephones keep the brokers in communication with their employers. Competent clerks keep track of the market, and a telegraphic service records significant transactions in some 1,800 city offices. Each of these offices receives this information through a telegraph instrument known as a "ticker." Each ticker prints the information on a ribbon of paper that passes through the device and falls into a basket beneath. By reading his "tape," a banker can note the fluctuations of the market and telephone orders to his broker accordingly. No stocks are actually exchanged on the floor. The brokers make note of trades on pads of paper, and telephone the transactions to their respective offices. Actual delivery must be made by 2:15 P.M. of the day following, or the delinquent is dishonored and his seat may be declared vacant. The buying broker must be prepared to pay or go into bankruptcy. A committee on the stock list decides what stocks may be placed on the exchange list. These stocks are looked up with care and are such as the brokers are willing to accept as securities for loans. Members are forbidden to sell unlisted stocks on change, nor are they allowed to trade in listed stocks except on the floor of the exchange. This latter rule is aimed to prevent large transfers without the knowledge of the financial world. The trading that is carried on in unlisted stocks and by brokers who are not members of the exchange is said to be transacted on the "curb," a term applied to an unorganized market near the stock exchange. A large part of the sales on exchange are purely speculative, mere stock gambling. The selling brokers actually sell and deliver. The buying brokers actually buy and pay, but the stocks are deposited with a banker to secure a loan. The speculating purchaser is required to put up such a part of the purchase price as may be agreed upon. If the stock goes down in value, the buyer is required to put up more money or else his stock is sold. If the stock in question goes up the purchaser may order his broker to sell and remit the profit. It may be stated as a rule that outside parties who do not want the stocks and bonds for an actual investment should let the stock market severely alone. Otherwise their small earnings and savings are absorbed quickly by the broker who is in business for that purpose. The New York Exchange is modeled largely on the London Exchange. The Paris Bourse consists of seventy members approved by the French minister of finance. Each member is held financially responsible, not only for his own transaction, but for the transactions of the other sixty-nine members. The members are brokers only. They are forbidden to buy or sell on their own account. They settle once every two weeks instead of the next day. There is also a Paris "curb," the transactions of which surpass those of the Bourse in volume. The Bourse circle is known as the parquet by way of distinction. The Berlin Exchange or Borse is democratic. Any one may buy or sell on payment of a small fee.