TECHNICAL TERMS OF STOCK EXCHANGES

The term bull is applied to those who are purchasers of stock for long account, with the purpose of advancing prices, as the tendency of a bull is to elevate everything within his reach. The term bear is applied to those who sell short stock, with the purpose of depreciating values. The bear operates for a decline in prices. The broker's charge for his services is called a commission, which in the New York Stock Exchange is one eighth of one per cent. each way on a par value of the security purchased or sold. A point means one per cent. on the par value of a stock or bond. Stock privileges or puts and calls are extensively dealt in abroad and to some extent here. A put is an agreement in the form of a written or printed contract filled out to suit the case, whereby the signer of it agrees to accept upon one day's notice, except on the day of expiration, a certain number of shares of a given stock at a stipulated price. A call is the reverse of a put, giving its owner the right to demand the stock under the same conditions. A put may serve as an insurance to an investor against a radical decline in the value of stocks he owns; a call may be purchased by a man whose property is not immediately available, but who may desire to be placed in a position to procure the shares at the call price, if they are not below that in the open market when he secures the necessary funds. The speculator usually trades on margins. If he has $500 to invest he buys $5000 worth of stock, his $500 being ten per cent. of the total amount. He expects to sell again before the remaining amount falls due. The margin is usually placed by the speculator in the hands of a broker as a guaranty against loss. Although these brokers are really agents for others, yet on 'change they stand in the mutual relationship of principals. A margin is merely a partial payment, but a broker buying stock for a client on margin is compelled to wholly pay for it. If he has not the necessary capital his usual custom is to borrow from banks or money-lenders, pledging the stock as collateral security. In foreign exchanges the element of credit enters more largely into the conduct of business. Where the credit of the client in London is established his broker does not, ordinarily, call on him for any cash until the next "settlement day." A wash sale is a fictitious transaction made by two members acting in collusion for the purpose of swelling the volume of apparent business in a security and thus giving a false impression of its value. Stocks sell dividend-on between the time the dividend is declared and the day the books of the company close for transfer; after that they sell ex-dividend, in which case the dividend does not go to the buyer. When a company decides not to declare a dividend it is said to pass its dividend. To sell stock buyer 3 is to give the buyer the privilege of taking it on the day of purchase or on any of the three following days, without interest; and to sell stock seller 3 is to give the seller the privilege of delivering it on the day of purchase or on any one of the three following days without interest. Buyer 3 is a little lower and seller 3 a little higher than regular way when the market is in a normal condition. Bucket shops are establishments conducted nominally for the transaction of a stock-exchange business but really for the registration of bets or wagers, usually for small amounts, on the rise or fall of the prices of stocks, there being no transfer or delivery of the commodities nominally dealt in. There are thousands of these counterfeit concerns throughout the country conducted without any regard for legitimate commercial enterprises.

FUTURE DELIVERY

Grain is stored in warehouses until needed for milling or shipment. When we speak of December wheat we mean wheat that is to be delivered to the buyer in December. The carrying charges include storage, interest, and insurance, so that wheat sold for May delivery would necessarily bring a higher price than wheat sold for December delivery. Carrying charges are in favour of the short seller. When sold for immediate delivery it is known as cash grain.

XIV. STORAGE AND WAREHOUSING

BONDED WAREHOUSES

There is a government regulation that an importer who does not wish to pay immediately the customs duties on his goods may have them stored in a warehouse, provided he furnish a bond with a surety that he will pay the duty within three years or export the goods to some other country. It is also a requisite that the goods be deposited in a bonded warehouse in the care and custody of its proprietor, who also must furnish the government with a bond of indemnity. The bond of the proprietor is a general bond and usually covers what might be considered a fair amount of total values due the government at any time. Officers of the United States are stationed at the bonded warehouse during business hours. These are there in evidence of the government's proprietary interest in the merchandise stored. When an importer makes entry at the custom house for bonding his goods, he at that time provides the security required.

By a recent decision of the Treasury Department at Washington goods in bond are in the joint custody of the United States government and the proprietor of the warehouse, and after the government has received its customs duties for the goods they are in the proprietor's sole possession. The government cannot interfere to enforce delivery of the goods to the importer. The claim of the warehouse proprietor for storage charges becomes a first lien after the government's claim is satisfied. When the importer has paid both customs and storage charges he is privileged to remove his goods.

WAREHOUSE REGULATIONS

It is the duty of United States storekeepers to check off the goods as they are received at the warehouse and to report the same to the custom house; and when goods are to be withdrawn to see that delivery is not made until a custom house permit is presented. Upon payment of the import duty on goods in bond at the custom house at any time after importation, the customs officials issue a warehouse permit to the importer ordering the United States storekeeper in charge of the bonded warehouse to deliver the goods to the importer, and upon presentation of the permit the goods are released unless the proprietor holds them subject to storage charges.