stinging contempt; and Dr Johnson defined him as a low wretch who gets money by buying and selling shares in the Funds. The stock-jobber, however, was in reality the outcome of a lengthy and intricate process by which the handling of money became raised into a science. To trace the development of money and of the moneymarkets of the world is to follow up a story of engrossing interest, beside which many a glowing modern romance would pale. Writers on financial history have shown us that the germs of the Stock Exchange may be traced back to early Venice and even to Athens. The bankers and their predecessors, the goldsmiths, are of ancient lineage; and, although the Bank of England can boast an existence of only a little more than two hundred years, the history of banking extends back far into early times. Great families rose to affluence by lending money, and cities flourished on the proceeds of their business; but high finance in the Middle Ages was a risky enterprise, for the Most Christian kings, who could not have fought their wars without its aid, not infrequently violated their obligations and repudiated their debts in the most shameless way. How money became negotiable through the medium of the cheque, the bill of exchange, and similar instruments; how the credit of the world, its thrift, its store of gold, its distribution of wealth, its multiplying channels for utility, came into being-all this makes a long and fascinating tale; but to deal with it, even in outline, would be out of place here.

The history of the Stock Exchange itself has yet to be written from the inside point of view. The archives of the House are guarded with jealous care; and only when a loyal son of the Stock Exchange takes up the subject, armed with the key which shall open the storehouse of information at present locked in the dusty folios of old minute-books and other records, will the internal history of the House reveal its secrets to the world. The earliest minutes on record are dated December 1798; and in them reference is made to a Stock Exchange in 1773, which seems to have been a coffee-house in Threadneedle Street, to which any person was admitted on payment of sixpence. The rooms were under the control of a Committee for General Purposes, though the expenses of management were defrayed by

the voluntary subscriptions of frequenters. By degrees, after the present building was opened in Capel Court, the little House grew and expanded. Starting with a membership of about 500, it has now ten times that number. Records of the dividends paid in the early days are lost in obscurity; for the last completed year a dividend of 100 per cent. was distributed. For some years there was little else to deal in except Consols, Annuities, etc., and a few foreign loans; but the savings of the public were growing, and, as confidence increased, money poured into the Stock Exchange. Over and over again came periods of wild excitement and speculation. During the Great War the National Debt increased by leaps and bounds, and there was active dealing in Consols. After it was over, foreign Governments borrowed money recklessly; and in the fifteen years 1818-1832, out of twenty-six foreign Government loans that were issued, the majority defaulted soon after their emission..

The Stock Exchange has witnessed many periods of wild excitement and speculation, reminding one of the famous South Sea Bubble-perhaps the most remarkable 'boom' on record-the story of which, however, has been so often and so vividly told by Smollett and later writers that we need only refer to it here. Just before the middle of the last century came the great railway boom. It began about 1834; and within one year more than six hundred propositions for railway lines in the United Kingdom were placed before the public, the nominal capital required being over 600,000,000l. Panic, of course, followed the boom; and, as an example of the rapidity with which prices moved, it may be mentioned that Great Western Railway stock rose to 236 in 1845 and fell back to 65 within three years, while Midland stock rose to 183 and fell to 64. After the railway boom and panic came several banking crises, of which the worst were those identified with the name of Overend, Gurney and Co. in 1866, and of Baring Brothers in 1890. For five years after the latter the Stock Exchange lay fallow, with business and credit worn to a shadow. Then came the famous Kaffir boom, of which it may be said that Cecil Rhodes stood out as the Colossus. The madness of that boom has rarely been equalled, even in the history of the Yankee market. Vol. 217.-No. 432.

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It makes one hot even now on a cold day to think of the time when, as a clerk, one tore off coat, waistcoat, collar and tie in order to run the faster in the settling room beneath the Stock Exchange, 'passing names' (as it is technically called) in connexion with that mad gamble. A Rugby football scrum was child's play to the continual struggles; and, after the most violent excitement had subsided, there were always fights to be settled before one went upstairs to work the whole night through.

A period of collapse followed this episode. After various minor upheavals there came in 1910 the rubber boom, which, perhaps, with the Kaffir gamble, more nearly recalls the excitement of 1720 than any other. The rubber boom had not, indeed, the same noble backing which the South Sea Company boasted; but clergymen and ladies were prominent operators as 'bulls,' 'stags,' or both. The fever of speculation ran absurdly high; and perhaps the intensity of the mania can be best illustrated by two incidents of the time. One day a charwoman called at the office of a well-known firm of brokers, and asked them to invest ten shillings for her in rubber shares. The other story is to the effect that, at the height of the mania, a broker wired to a client in Ireland: Rise in Bank Rate considered likely,' to which the client promptly replied: 'Buy me five hundred.' Both of these incidents savour of the imagination; both, as a matter of fact, are perfectly true.

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Appetite, as usual, grew by what it fed on; and company promoters were not slow to take advantage of the prevalent madness. A new market was created in the Stock Exchange. Though for many years past some few dealers had negotiated bargains in rubber shares, it was not until 1909 that anything like an organised market was attempted. As the fever spread, men from other parts of the House flocked into the rubber section, where it seemed as though sovereigns were to be had for the picking up. Men made 500l. a day; in some cases this amount was largely exceeded. Yet, after it was all over, comparatively few retired. As usual, too many failed to see when the end was approaching, and, in consequence, got loaded up with thousands of shares which fell heavily on the collapse of the movement. During the height of the boom the pace was tremendous.

Cold as it might be outside, the rubber market in the House burned at fever heat. Some members absolutely refused to enter the market at all; others, for a consideration, would plunge into the fray and deal as best they could for their clients the brokers. The Stock Exchange restaurants were crowded night after night up to a late hour; and, although the leaders of the market declined to deal in the street, business went on over the telephones up to eight o'clock. The boom deflated towards the middle of 1910; and, as is the case with every excitement of this kind, it left a math of depression and dwindling business. the Stock Exchange little good on the whole.

long after

Booms do

But the Kaffir and rubber booms were, after all, abnormal episodes. Such storms do not often disturb the quiet of the House. Let us glance at the proceedings of its humdrum days. To the Stock Exchange member, the ordinary routine of how securities are bought and sold is, like the market phrases, so familiar that he wonders mildly when asked to explain some of the complexities of the one or the plain English of the other. He is almost annoyed when, for example, a client sends on the wrong day instructions with regard to transfers. He waxes eloquent upon the ignorance of another to whom the word 'contango' is meaningless. Many a phrase which the client reads in the daily paper conveys little to him, but is commonplace to the Stock Exchange man, who, by the way, derives plenty of amusement from the misuse of the technical terms so dear to the pen of the half-instructed journalist. Indeed, the Stock Exchange is a very trap to most writers; and, when it comes to discussing a method of House procedure, debating a matter of Stock Exchange legislation, or describing some scene in the markets, the ordinary journalist is almost certain to provoke a pitying smile from the insider. A broker wrote to a well-known journal, describing the dramatic scene that occurred on the day when the Kruger ultimatum expired, and when, beneath the folds of a large Union Jack, a fellow-member solemnly 'hammered' the Boer President, with the words always used to announce the failure of a Stock Exchange The newspaper sent the writer a cheque for two guineas, but so 'edited' the report that, to any House

man.

reader, it was absurd; and the two guineas were promptly returned with the request that they might be sent to some benevolent fund for the writers of fairy-tales.

The Stock Exchange settles most of its transactions twice a month, upon the officially-fixed account days, which come about the middle and at the end of every month. Mr Brown gives his broker an order, let us say, to buy a hundred East Rand Proprietary Mines and fifty Canadian Pacifics. The broker goes first to a jobber who makes a speciality of dealing in East Rands and kindred shares; that is to say, one whose business it is to know where he can get such shares and where he can sell them. If he finds there are more buyers than sellers, the jobber will go on putting up the price, while, if sellers predominate, he will most probably lower it. The broker, without confessing himself buyer or seller, asks for a price in a hundred East Rands; and the dealer promptly quotes him, say, 31 to 3%, implying that he is prepared to buy the shares at 65s., or to sell them at 66s. 3d. The broker protests that the price is too wide, whereupon the dealer may make him close to close,' meaning closer both ways. Stated in shillings and pence, this works out at 65s. 3 d. to 65s. 11id., a margin of 74d. between the two prices. Buy a hundred of you,' says the broker, and the two men enter in their books the transaction-the broker that he has bought a hundred East Rands at 3 and, the jobber that he has sold a hundred at this price. The broker closes his book, and threads his way through the other departments until he comes to the Yankee market, where he tests the price of Canadian Pacifics by asking one or two jobbers, finally dealing in much the same way as in the East Rands.

The client is promptly advised of the transactions, and on the following day receives stamped contracts setting out the cost of the shares, with brokerage and expenses, and giving the date of the account-day when payment will fall due. Between broker and jobbers, the bargains are checked by their respective clerks in the large settling room beneath the floor of the House; and two days before the account the name of the client for whom the East Rands were bought is written out on a 'ticket-hence the description of 'ticket-day '—and