Connected with the business of the Gold Room are the Gold Exchange Bank and the Clearing House. The method of settlement with these institutions, which are indispensable where gold passes so rapidly from hand to hand in the Exchange, is as follows: “On or before half past twelve o’clock, a statement of all the purchases or sales made by each broker on the preceding day must be rendered to the bank. If the gold bought be in excess of that sold, a check for the difference must accompany the statement. If deposits in gold or currency are not kept in the bank, the coin must be delivered at every deficiency. The Board adjourns at twelve, in order to enable tardy dealers to complete their accounts. Provided all contracts are honored, the bank must settle by two P.M. In case of default, the amount in abeyance is debited or credited to the broker who suffers by the failure.”
The Clearing House Association was created in 1853, and represents the sum of the financial business of the city. “The Association is located in the third story of the building of the Bank of New York. The centre of the room is occupied by a bank counter, extending on four sides, with a passage inside and out. Fifty-nine desks are placed on the counter for the use of the fifty-nine banks represented in the Association. Each desk bears the name of the bank to which it belongs. Fitted up in each desk are fifty-nine pigeon holes for the checks of the various banks. Two clerks represent each bank. One remains at the desk and receives all the checks on his bank. He signs the name of the bank to the sheet which each outside clerk holds in his hand. These outside clerks go from desk to desk and
leave the checks received the day before, with the banks on which they are drawn. Banks do not begin public business till ten; but clerks have to be on hand at eight, when all checks are assorted and arranged for delivery at the Clearing House.
“At ten minutes before ten the bank messengers begin to assemble and take their places. As they enter they leave with the messenger a slip containing an exact account of the bank they represent. These statements are put on a sheet prepared for that purpose, and must conform precisely to the checks received inside, before the Clearing House closes its duties. If there is any error or discrepancy, the bank is immediately notified by telegraph, and the clerks kept until the matter is satisfactorily adjusted. At ten, promptly, business begins. Clerks come rushing in with small trunks, tin boxes, or with bundles in their arms, and take their seats at the desks. On the side of the room entered only from the manager’s office is a desk, not unlike a pulpit. Precisely at ten the bell rings, the manager steps into his box, brings down his gavel, and the work of the day begins. Quiet prevails. No loud talking is allowed, and no confusion. A bank late is fined two dollars; a party violating the rules, or guilty of insubordination, is fined two dollars and reported to the hank. On repetition, he is expelled the Clearing House. The daily transactions of the Clearing House varies from ninety-eight to one hundred millions. The system is so nicely balanced that three millions daily settle the difference. Each bank indebted to the Clearing House must send in its check before half after one. Creditors get the Clearing House check at the same hour. Daily business is squared and all accounts closed at half after three. Every bank in the city is connected with the Clearing House by telegraph. The morning work of clearing one hundred millions, occupies ten minutes. Long before the clerks can reach the bank, its officers are acquainted with the exact state of their account, and know what loans to grant or refuse. Through the Clearing House each bank is connected with every other in the city. If a doubtful check is presented, if paper to be negotiated is not exactly clear, while the party offering the paper or check is entertained by
some member of the bank, the telegraph is making minute inquiries about his financial standing. Before the conference closes, the bank knows the exact facts of the case.”
V. CURB-STONE BROKERS.
The members of the Stock and Gold Exchange, as has been stated, are men of character. Their transactions are governed by certain fixed rules, and they are required, on pain of expulsion from the Exchange, to observe the strictest good faith in their dealings with each other and with their customers. If the operations of the street were entirely confined to them, business in Wall street might be regarded as in safe hands. But there is another class, even more numerous and quite as well skilled in the ways of the street, who transact a vast part of its business. They are not members of the Exchange, and in former times used to assemble around its doors in Broad and New streets, and carry on their operations on the sidewalk. Hence their designation, “Curb-stone brokers.” They no longer assemble on the pavement, for the Exchange has thrown open to them its Long Room. Any one who can pay $50 a year for a ticket of admission, and who has brains and nerve enough to enter upon the struggle, can sell or buy in the Long Room. This is better than standing in the street, exposed to the weather, and moreover gives a certain respectability to the “operator,” although he may carry his sole capital in his head, and his office in his breeches-pocket.
No rules or regulations apply to the Long Room. The honest man and the rogue mingle together here, and the broker must be sure of his man. Many of the members of the Exchange buy and sell here, either in person or through their representatives, and many good men who are unable to enter the Exchange conduct their business here. Others again prefer the freedom and the wider field of the Long Room. Still, there are many sharpers here, who would fleece a victim out of his last cent.
The daily transactions of the Long Room are said to average about $70,000,000, or ten times the business done in the Regular Board. Fortune is much more uncertain here than in the room up stairs. Men buy and sell here with the recklessness of gamblers. The noise and excitement are almost as great as in the Gold Room. The absence of the fixed laws of the Regular Boards puts every one on his own resources, and men are compelled to use all their ingenuity, all their determination to guard against a surprise or unfair dealing. It is every one for himself here. A dozen or more small or new operators are ruined and swept away daily, and in times of great financial excitement the Long Room shakes the foundations of even some of the strongest houses in the street.