The stockbroker’s praises are never sung; if he has good qualities, one seldom hears of them. Doctor Parker once defined the Stock Exchange as the “bottomless pit”: Doctor Johnson said a broker was “a low wretch”; politicians vie one with another in painting him a parasite and a social excrescence. Impatient idealists who would take a short cut to perfection assert that he is of no real economic value, and would enact laws to restrain him. In the novels and on the stage he becomes sleek, cunning, convivial, and slippery, while there is ever about him a rank smell of money and a Machiavellian sublety that enables him to get something for nothing. Without understanding him and without comprehending his devious ways, we feel somehow that he lacks what Lord Morley calls “original moral impetus,” and that in some mysterious way there is a stratagem lurking in all his actions. When he enters the stage or the story we say:
“By the pricking of my thumbs,
Something wicked this way comes.”
Members of the Stock Exchange are more or less familiar with Baron Munchausen and Mother Goose—for if rumor be credited both these characters live in Wall Street—so they accept with good humor the epic touch of playwright and novelist who thus take poetic liberties with them and their profession. But the iron enters into their souls when you term them non-producers and parasites, and long into the night they will debate it with heat, bringing down the lath and plaster on their detractors with the heavy artillery of all the orthodox economists, and painting in gloomy colors the picture of a commercial world without its great Exchanges.
At such times they become very earnest, and the listener, who perhaps never thought of it before, comes away at least partially persuaded that society as it is constituted to-day will have to undergo a very decided transformation before it can get along without the machinery of which these maligned persons are so important a part. It has stood the test of time; it has come to stay; its fundamental idea, economy and utility in trade, began with the Agora of ancient Greece and the Forum of Rome. If there is something apocryphal, then, in the tradition that derides the profession, here at least is evidence of its early origin, its growth, and its power of endurance. In any case, membership in the Stock Exchange is to-day the ambition of good citizens everywhere, and affords to many a father a solution of the question at once difficult and important, “What shall we do with our sons?”
There are arguments against such a career, of course, just as there are against all roads that lead anywhere this side Utopia, but nevertheless, a man with capital, average intelligence, and good health, daily contributing by his labor to the silent forces that ebb and flow within these walls, can do well on ’Change without sacrificing anything that makes for self-respect and without diminishing in any degree his value as a useful member of the community. Moreover, he is free from things sedentary and is brought into daily contact with men and affairs that broaden and instruct him. He becomes a thinking and observing person, one whose mind never becomes atrophied for want of material on which to feed. He must be equipped with patience and philosophy to enable him to endure, without losing his nerve, the long periods of dulness that are a sorry part of the business, but he will not complain of wasted days if he learns to know that waste time, like waste material, may be converted into valuable by-products; that just as manufacturers are vigilant in turning their scrap-heaps into commercial utilities, so, in his daily economy the Stock Exchange member may, if he has the right stuff in him, turn the ashes, slag, and refuse of the hour into things of practical value. Once he has learned to do this, the novitiate has surmounted the most serious obstacle in his profession.
His days on “the floor,” as it is commonly termed, will bring him in contact with many different types. He will find here all that is finest in human character, and many withering things that are most fatal to it; these he may find anywhere, because there will always be men who carry all sail and no ballast, “men who cannot believe life real until they make it fantastic.” But the Stock Exchange is a great leveler; infallibly its swift analysis of character will search him out, weigh him and measure him, and place him just where he deserves to be. Nowhere else among business men does this silent and sure appraisal of worth find a more perfect result. It has nothing to do with the size of one’s purse nor the blue in one’s veins; it takes no account of what a man has been nor of what his ancestors were. Commercial honor is what counts, and within these four walls it is raised to a high plane and maintained with reverence. They live a touch-and-go life, with quick changes and nerves all in action, but they make no mistakes when they analyze character in their great crucible.
Those brutal aphorisms, “money talks,” “might makes right,” “whatever is, is right,” and all similar phrases, become meaningless in the matter-of-fact subordination of externals that one witnesses daily on ’Change, where life is stripped of all save elementals. It is character that “talks” here, not money; if might makes right, it is the might of decency and not of brute force or “pull”; whatever is, is “right” only so far as it conforms to the code of gentlemen and exalts the square deal. Unless a candidate understands this in its fullest sense, and is determined to make it his goal, he had better avoid the Stock Exchange. Conversely, we find in this critical atmosphere another reason why honorable men are ambitious to become members, for it is something inspiriting to have won the discriminating approval of a critical assembly abounding in experience and guided by good traditions.
The New York Stock Exchange is an association and not an incorporated body. It resembles a club in its organization, and hence through its governing board it exercises a control over its members that could not be maintained by differently constituted authority. From the moment a man signs that Ark of the Covenant, the constitution, and thereby becomes a member, he places himself, his partners, his customers, his employees, his books and all his business affairs unreservedly in the hands of the Board of Governors. This body, which is composed of members of the Exchange, is chosen in classes of ten, by the full Board at an annual election. It consists of forty members, divided into eleven standing committees, of some of which the President, Vice-President, and Treasurer are also members.
It has been urged in times past, by those who have not understood the peculiar powers of this Governing Board, that the Stock Exchange should incorporate in the manner provided by law, and thus place its affairs within the control of the State authorities, so that if mistakes occur and wrongdoing becomes evident offenders may be dealt with by the legal authority vested in the Courts. But the essential point altogether missed in this suggestion lies in the fact that the absolute power vested in the Board of Governors, by the existing plan, gives the Stock Exchange authorities vastly greater control over its members than any law on the statute books could possibly give. The Hughes Commission, which went thoroughly into the affairs of the Stock Exchange in 1909, recognized this fact, and its report emphasized the point that if changes were necessary they should come from within the Exchange itself, because of the broad control vested in it by its constitution.[93]
The manner in which the Board of Governors handles offences as they occur, and the way punishment is meted out, would not have a constitutional leg to stand on if, as an incorporated body, offenders could invoke their legal privileges. Under its present organization, for example, the Board may, if it sees fit, intercept and cut off a member’s telephone connection; it may dictate with whom he may or may not do business, and in its wisdom it may determine how, when, and where that business shall be conducted. If it were an incorporated body and each offender could resort to the courts in instances such as I have cited, what would become of its rules, and how could the Exchange authorities maintain its absolute determination to protect the public at all hazards? Under the existing system, which true friends of the Exchange and of the public may well wish to see maintained, the governors are enabled to find the direct way and the common-sense way, without being blocked by a jungle of legal technicality. They are not to be delayed or restricted by alibis, by pleas of immunity, or by States’ evidence, nor are they to be interfered with by the rain of legal writs through which an accused man, in the courts, may twist and double and block and delay the punishment for his sins, if sins there be.