Bill broker

“ By the conditions of his trade, the bill broker is forced to belong to a class of "dependent money dealers," as we may term them, that is, of dealers who do not keep their own reserve, and must therefore at every crisis of great difficulty revert to others. ”

“ Selling through a Play broker is a method that is precisely the same as though you consigned a bill of goods to a commission agent, and paid him for disposing of it. The play broker reads your manuscript and engages to try to dispose of it for you, or returns it as not likely to fit in with the particular line of business of which he makes a specialty. If your act is really good and yet the broker is able to make some suggestions that will improve it, he is likely to offer such suggestions, purely in the hope of earning a commission, and in this way he may prove of distinct value as a critic. ”

“ The more money he makes out of you, the more he asks. Wherefore it would be undoubtedly cheaper to discount a bill with a fool, if fools there be in the profession of bill-discounting.
The law requires the banker to obtain a stock-broker's certificate for the rate of exchange. When a place is so unlucky as to boast no stock exchange, two merchants act instead. This is the significance of the item "brokerage"; it is a fixed charge of a quarter per cent on the amount of the protested bill. ”

“ He can act only as the agent of the other party when the terms of the contract are settled and he is instructed to finish it. Brokers are of many kinds. They relate to bills and notes, stocks, shipping, insurance, real estate, pawned goods, merchandise, etc. A bill and note broker who does not disclose the principal's name is liable like other agents as a principal. ”

“ It may be lessened; the bill brokers may, and should, discourage as much as they can the deposit of money with them on demand, and encourage the deposit of it at distant fixed dates or long notice. This will diminish the anomaly, but it will not cure it. Practically, bill brokers cannot refuse to receive money at call. In every market a dealer must conduct his business according to the custom of the market, or he will not be able to conduct it at all. ”

“ It is impossible to exaggerate the importance of the functions which the bill brokers discharge in the London money market. They are only about twenty in number, including three joint stock companies. One or two of the brokers work on commission, as your brokers do, but the majority are really dealers in bills. That is, they buy or discount, and sell, or rediscount, bills of exchange. ”

“ They lend large sums on foreign bonds or railway shares or other such securities, and borrow those sums from bankers, depositing the securities with the bankers, and generally, though not always, giving their guarantee. But by far the greatest of these intermediate dealers are the bill brokers. Mercantile bills are an exceedingly difficult kind of security to understand. The relative credit of different merchants is a great "tradition"; it is a large mass of most valuable knowledge which has never been described in books and is probably incapable of being so described. ”

“ The broker, on the other hand, is an independent middleman, not tied to a particular company. He meets more specially the needs of large customers, using their concentrated bargaining power to obtain the most favorable terms from competing companies. His activities, being largely confined to the big commercial centers, take place mostly outside Virginia.
A policy, whether 'produced' by broker or agent, must be 'serviced'-an insurance term for assistance rendered a customer in minimizing his risks. ”

“ You can operate with all the statistics of “Poor’s Manual” and “The Financial Chronicle” packed into your head, or you can trade with the gay abandon of M. D’Artagnan breakfasting under the walls of La Rochelle.
I have said all the world comes here, and the more I reflect upon it, as a man of twenty years’ experience, the less I wonder. The wonder is that anybody stays away. It is so tempting, so amusing, so respectable, so reckless or cautious, as you choose.
In appearance, a broker’s office is something between a club parlor and a bank, and it unconsciously represents its business. ”

“ In this manner, brokers technically, and bankers doing the business of brokers, were made liable to the duty. If the right to tax bankers upon sales made for themselves rested on the seventy-ninth section alone, a plausible argument could be made in the plaintiffs' favor, arising from the words 'except such as hold a license as a banker;' but when we read in sect. 99, 'that all brokers, and bankers doing business as brokers,' shall be subject to the tax, and consider the statutory definition of a broker, the plausibility of the argument ceases. ”

“ Every purchase and sale now made on the floor of the New York Stock Exchange provides for a delivery on the day of purchase, or the following day, and payment made therefor upon delivery of the security, and no law can possibly be passed by Congress, or the State Legislature, to prevent a broker thus buying securities for a customer on part payment on terms satisfactory to himself, any more than a law could be enacted to prevent a dry goods, hardware, grocer, or merchant in any other line from extending credit to his customers. ”

“ To complete the purchase he advances from his own funds, for the benefit of the customer, 90 per cent of the purchase money. Quite as clearly he does not, in this, act as an agent, but assumes a new position. He also holds or carries the stock for the benefit of the purchaser until a sale is made by the order of the purchaser or upon his own action. In thus holding or carring he stands also upon a different ground from that of a broker or agent whose office is simply to buy and sell. To advance money for the purchase, and to hold and carry stocks, is not the act of a broker as such. ”

“ The rule thus established by the courts of the state where such transactions are the most numerous, and which has long been adopted and generally followed as a settled rule of law, should not be lightly disturbed, and an examination of the cases and the principles upon which they rest leads us to the conclusion that in no just sense can the broker be held to be the owner of the shares of stock which he purchases and carries for his customer. ”

“ It is only when making sales and purchases is his business, his trade, his profession, his means of getting his living, or of making his fortune, that he becomes a broker within the meaning of the statute. Nor is it believed that a sale, by one doing a banking business only, of a security received by him for the repayment of a legitimate loan, would make him a broker, and subject to the tax. ”

“ The broker's business grows legitimately out of the need of ready transfer of claims, for the sake of larger use of the floating capital of the country, and readiness of investment in more fixed forms. It adds, however, to the dangers of extended credit by making more easy the gratification of present wants through expectation of future ability. The broker makes his gain, without reference to the final settlement, by taking a commission upon the loan. ”

“ The brokers execute the orders of bankers, merchants, and private individuals; and the jobbers are the persons with whom they deal. When the broker appears in the market, he is at once surrounded by eager jobbers. One of the cries of the Stock Exchange is, 'Borrow money? borrow money?'—a singular cry to general apprehension, but it of course implies that the credit of the borrower must be first-rate, or his security of the most satisfactory nature, and that it is not the principal who goes into the market, but only the principal's broker. ”

“ That's the theory, at least, but what often happens is the committee of trustees don't know enough, or have enough time outside of their work, to make investment decisions, so they take the broker's advice, and that's not necessarily bad. But to keep the brokers honest, trustees with good sense often deal with several brokers and play them off against each other, and that's free-market competition and good for everyone except the greedier brokers. ”

“ If the amendment had been properly expressed, it should have been added as a proviso to the 99th section, which relates to the rates of duty to be paid on sales made in the stock-market by brokers or others licensed and doing business as such, and in the preceding case the court have so construed it.
Now, a banker pays a much higher license tax than a broker, and is permitted to 'prosecute or carry on' the business or profession of a broker without paying any further license; but if he prefers, he may not combine that business with his own. ”

“ On the usual setting days the brokers balanced between themselves the purchases and sales made, and made or received deliveries to or from their principals, as the case might be, or if their principals refused to accept or deliver, then they sold or bought against them, and charged them with the loss, if any; or if delivery was not required on either side, then any difference arising from a rise or fall in the market was paid by one to the other. It was held that this custom did not bind a principal giving an order to a broker to purchase for him, being ignorant of its existence. ”

“ The notes and checks which passed between the factors and the bank were but forms to carry out the main purpose of the transaction between them, and did not change its nature or effect.
By the common law, a factor or agent for sale has no power to pledge, whether the owner has intrusted him with the possession of the goods themselves, or with the symbol of them, as by consigning them to him by a bill of lading in which he is consignee or indorsee. ”

“ Apart from this, counsel contended that a purchase of stock was a thing which the federal government could not control, for the reason that the acquisition or disposition of property was not commercial intercourse. “If any citizen should step into a broker’s office on Broadway, New York, buy some stock in the Pennsylvania Railroad, pay for it, put the certificates in his pocket, and walk out, would he, or the broker, or the broker’s principal, be engaged in commercial intercourse between nations and parts of nations?... ”

“ The Commission seemed of opinion that the Stock Exchange would welcome incorporation, but it proposed, apparently as a kind of sop, that if it accepted the recommendation it might well be granted a monopoly of stockbroking—in other words, it proposed that if the Stock Exchange were incorporated it should have the exclusive right of licensing people to act as stockbrokers, which, of course, would do away with the outside broker altogether. ”

“ In New York a broker charges 1⁄8 per cent. commission on the par value of every hundred shares in which he deals for a non-member, each way, and the rules of the Exchange compel him to collect it in all cases. The slightest departure from this rule, however technical it may be, is severely punished, and no statute of limitations or other expedient will save him from the consequences of it. Thus all the brokers are insured343 an equal footing; competition for business is prevented, and the public which the Exchange seeks to serve is assured of equally fair dealing in every quarter. ”

“ Although the broker has an implied authority to substitute other securities of the same kind and amount for the securities which he holds for his customer, and to repledge them to the extent of his advances, courts have not dispensed with the requirement that he should at least have, either in his own prossession or lodged with his bank on the repledge, specific securities of the kind and amount purchased for his customer, available for delivery to the customer on payment of the balance due. ”

“ SIR THOMAS GRESHAM
The usual commission charged by a broker is one-eighth (2s. 6d.) per cent. upon the stock sold or purchased; although of late years the charge has often been reduced fifty per cent., especially in speculators' charges, a reduction ascribed to the influx into the market of a body of brokers who will "do business" almost for nothing, provided they can procure customers. The broker deals with the "jobbers," a class of members, or "middle-men," who remain stationary in the stock market, ready to act upon the orders received from brokers. ”

“ When drafts have Bills of Lading attached, and the draft states on its face that it is payable on arrival of the goods, the bank can hold it until the goods arrive; but if the draft calls for payment on presentation, even though it has a Bill of Lading attached, the bank holding it, until the arrival of the goods, does so at its own risk. As has been stated, and it can't be stated too forcibly, the presenting bank has no option and must obey orders to the letter. If it does not, it must suffer any resulting loss. It is only an agent and can not regard the wishes of the payer. ”

“ The jobber is strictly forbidden to receive orders direct from the public or provincial brokers, and the broker must not receive a commission from more than one party on one transaction, and he must not execute an order with any non-member unless he can thereby deal to greater advantage than with a member. ”

“ So far as any broker applies to his own use any securities belonging to a customer, or hypothecates them for a greater amount than the unpaid balance of the purchase price, without the customer’s consent, he is undoubtedly guilty of a conversion under the law as it exists to-day, and we call this fact to the attention of brokers and the public. ”

“ But to make such transactions legal, they must contemplate an actual purchase or an actual sale of stocks by the broker, or through him. If the intention is that the so-called broker shall pay his customer the difference between the market price at which the stocks were ordered purchased and that at which they were ordered sold, in case fluctuation is in favor of the customer, or that in case it is against the customer, the customer shall pay the broker that difference, no purchases or sales being made, the transaction is a wager and therefore illegal. ”