PREFACE In accordance with the scope of the series of Books on Business, of which this little work forms an item, its main object is to explain to the unversed in simple terms the somewhat complicated machinery of the Stock Exchange. Some criticism is ventured upon here and there, and a practical hint may be gleaned now and again from its pages; but the real aim of the book is merely to explain, not to comment. If the book conveys some idea of the important part the Stock Exchange plays in the economy of the nation, and of how it plays that part; if it furnishes a solution of the various mysteries which the routine of the Stock Exchange presents to many minds, the objects of the little work will have been attained. Owing to the continued demand for the book, and to the changes which have occurred during the decade which has elapsed since it was written, it is now reprinted in revised form. C. D. PARK LODGE, NEW BARNET, HERTS, _July, 1913_. CONTENTS I. WHAT THE STOCK EXCHANGE IS 1 II. THE MARKET-PLACE 6 III. THE MEMBERS AND THEIR CLERKS 18 IV. THE COMMITTEE 26 V. BROKERS AND JOBBERS 32 VI. HOW BUSINESS IS TRANSACTED 45 VII. THE SETTLEMENT 56 VIII. THE ZOOLOGY OF THE HOUSE 65 IX. OPTION DEALING 72 X. THE WARES OF THE MARKET 84 XI. FAILURES 101 XII. PRICE LISTS AND RECORDS 109 XIII. THE ROYAL COMMISSION'S VIEW 125 XIV. A SKETCH HISTORY 138 XV. A BROKER'S DAY 150 XVI. FROM A SOCIAL POINT OF VIEW 161 INDEX 169 CHAPTER I WHAT THE STOCK EXCHANGE IS The Stock Exchange has been described as the mart of the world; as the nerve-centre of the politics and finances of nations; as the barometer of their prosperity and adversity; and so on. It has also been described as the bottomless pit of London, and as worse than all the hells. Perhaps, however, the Stock Exchange can best be defined and described as a market. Just as Smithfield is the market for meat and Covent Garden the market for flowers, fruit, and vegetables, so is the Stock Exchange the market for stocks and shares.