THE STOCK EXCHANGE.
Observer, Volume XXV, Issue 12, 3 December 1904, Page 3
THE STOCK EXCHANGE.
An Abortive Boycott
THE gentle art of bo>cotting, which is deprecated with smug faces and upturned eyes when practised in a country at the other side of the world, is very right and proper when we choose to put it in operation for our own little interests. That is evidently what the Auckland Exchange thinks. This very important body has been endeavouring to justify the application of the boycott for some considerable time oh the grounds of its high moral rectitude and the assumed unworthiness of the outside broking community, but certain events having created doubts in the public mind on thia point and revealed the boycott in all its nakedness, some re-arrangement of the conditions under which the business of sharebroking is conducted became necessary. It is supposed that a hint to that effect was received from Welllington.
The persons- who have been in the habit of dealing professionally in shares and stocks heretofore have been divided into two distinct classes. These were, the members of the Stock Exchange, and those who were" not membere. Both were similarly qualified in the eye of the law, being licensed by the Government, bnt the former were barred from doing any business, i.e., dividing commission or baying shares at nett price, with the latter, who to- that extent were prejudiced in, the pursuit of their calling, having, their market, so to speak* limited, to those who, like themselves, were boy* cot ted by the aristocracy of the profession. Of course, this prohibitory rule did not work out exactly as it was intended in practice. As a matter
of fact, " outsiders " divided commission, and bought and sold with fullblown members, in the freest and most flagrant manner. But the rule, if-inoperative, existed, and it was felt to be, as indeed it was, a most offensive rule.
Accordingly, and in order to remove What they might consider any just cause for grumbling, the members of the Exchange decided to add a nbsection* to the rule referred Aq, No. 41, making provision for the election, by ballot, of holders of sharebrdkers licenses to the privilege of doing business and dividing commission with the members of the Exchange, " provided such person subscribes to the Rules of the Exchange and agrees to be bound thereby in. every respect as if he were a member of the Exchange" These persons are not to be allowed to attend calls or meetings of the Exchange, but, as some compensation, they are to be allowed to contribute £5 to the funds of the Exchange ! This, it will be observed, does not mean the abolition of the boycott, but m.eVely the extension of the field of its operation, or a contraction thereof, according to the viewpoint. The apparent object is to reduce the number of those boycotted, but the latter will see in it only a multiplation of the army of boycotters.
Bat, whichever way one looks at it, the system is bad and indefensible, and utterly at variance with the spirit of social government in a free democratic country. It is, of course, absurd and snobbish to talk about sharebroking as a " profession," and to attempt to treat it like the learned professions. It is simply a trade or calling, and if it seeks, as the law allows to form a union, it should conform to the principles that govern trades unions, and admit all qualified persons who are willing to pay the subscribed fees. The Exchange, having announced that the new rule came into operation on the 21st November, invited the outside brokers to apply for admission as "associates" or "jobbers" (as the Chairman has since called them) and as the result of a ballot all but two were elected. Two of three others declined the- invitation to stand, and these are now gloating over the credulity of those who did.
For the alleged "privileges " are like the proverbial bird in the bush. For the trifling fee of £5 they receive nothing from the hands of the Exchange Members which they did not previously enjoy, while they are now compelled to relinquish all business transactions with the rank outsiders. Moreover, though the Chairman of the Exchange is made to state in the newspapers that the new rules are now " in operation," it is a fact that they have not yet been gazetted, that they have not yet received the approval of the Government. Furtbennore, when the whole of the circumstances of the case and the position of the trade generally are laid before the Government, the chances are that the new rules never will he gazetted. Nevertheless, the Exchange ha« been acting on them, as if they had the authority of law. Associates have been elected, applications for the first half year's subscriptions have been sent to these, and some are fresh enough to have paid.
What will happen, we do not doubt, is the complete reform of the business of buying and selling shares. Persons fitted to be entrusted with the privilege — for it is a privilege, and one that ought to be closely guarded — of broking should be licensed by the Government as heretofore, after strict examination, and they should be subject to euch regulations as may be considered necessary in. the public interest. But, being licensed, these persons should not be boycotted by any rules approved by the Government that licenses them. That is sound logic and sound sense, and thepnblio wul see it, even if the members of/the Exchange don't. Meantime, the boycott doesn't hurt very materially the persons whom it was intended to crush ; for one "outsider announces that he is prepared to do business at rates which, in the present state of the market, would be ruinous to members who have to pay fee's.