HOW DAVIS SAVED HIS FRIEND THE BROKER.

Otago Witness, Issue 2424, 30 August 1900, Page 11

HOW DAVIS SAVED HIS FRIEND THE BROKER.

* A STOCK EXCHANGE YARNFOUNDED ON FACT. Br Mtjehay Aston.

" John Davis " was a young member of iho London Stock Exchange. The members of this great institution, as many are fully aware, are divided into two groups — viz., brokers and jobbers. The former buy and sell with Hie latter on behalf of the public, who are known as clients — and the latter — viz., the " jobber," who is sometimes called " dealer " by people with a regard for fine language, — buys and sells wilh other dealers or brokers as the fancy takes him. There are no " calls ; over," therefore, on the London Stock Exchange; but it may be of interest to state that its building, which is of vast extent, is made up of groups of members, who always occupy the same position on the floor of the " House," as it is called, and these groups or gatherings are known as markets. They vary in size according to the amount of business going on, and the jobber may move from one " market " to another. This month Consols may be the attraction, and numbers of members will accordingly "leave" other portions of the House where business may be dull for the purpose of " trying their luck " where the British Funds are dealt in. A little later on there will be a "flutter" in Mines, and a rush of dealers will take place to the mining market, all anxious to participate in the " good things " that are going. Mr Davis was a jobber, and he started business in the Mining Market with enough money at the bank to warrant his calling — and it did not exceed three figures, be it understood, — but our hero was well known, was young and handsome, and had a '' good connection " with certain wealthy young brokers, who had an affinity for Davis because of his athletic fame, for he was a great footballer, and had nearly lowered the record for the fastest quarter of a mile. He was also an excellent " shot." Every morning at a quarter to 11 our youthful jobber, with book in hand, took up his position in the Mining Market, and here, with ears and eyes open — a jobber will require all the powers of observation that mankind are gifted with, as a rule, — he remained until the close of business at 4- o'clock p.m. The course of business was very simple^ — after you had mastered the system, that is. The broker, having received from his client an order to buy, say, " 100 Emma mine shares at best," would wend his way from his office in Capel Oourt to the Mining Market, and his advent would be hailed with ill-concealed glee by his friend Mr " Jobber ' Davis. "Anything to do?" he inquires from his ; customer, the broker. i "Yes. What are 'Emmas'?" is the re- " Two and an eighth to a quarter," says j Davis. I "Are there anything at the three [3/16]?" j goes on the buyer. j "I'll make you a sixteenth 'price'?" re- i turns Davis. | " Fire away " — this from the broker. " Three - sixteenths a quarter," replies Davis, who has rightly "read" the man as a buyer. "Buy them of you, you wretch.'.' And the 100 shares are booked by the broker as bought at two and a-quarter, or forty-five shillings per share. _ Da,vis enters the 100 as sold at 2 1/4- in his jobbing book, and at once quietly joins the throng of other jobbers and endeavours to find out "what Emmas really are." If he thinks them "firm," he rebuys at any profit, or at the same price, or even at a loss; but should they look " flat," the astute jobber will " run " his " sale," and trust to rebuy before the end of the day at a much lower figure. Some jobbers make a point of never going away " uneven " at night, and these are the men who seldom if ever " come to grief." We must, however, follow the broker, one Jones, who walks across the House to the "official list," where, having "marked" or " recorded " his transaction in " Emmas at 2 1/4," returns to his office, makes out a contract o # r bought note for his client, plus 6d per share commission, stamp, and fee, and waits for the next order. Of course, it will not be possible to enter more minutely on j this occasion into the working of Stock Exchange procedure, but the foregoing illustration will afford those who care to kpow a slight insight into " how it is done " in London. Things are different on the Provincial Exchanges. To return to our dealer in whose fortunes our interest on this occasion is centred. That young man was much' gratified to find that Emmas were "particularly weak," and on hearing "one jobber gifted with a particularly stentorian voice offer " 1000 Emmas at 2" Mr^ Davis thought, being " out of 100 at 2 1/4 "that he might safely adjourn to Mabey's for his lunch ; and on returning to the market fifteen minutes later he was met with the gratifying intelligence that " Emmas were flat." "Bottom out." "Sellers at 1 5/8." Of course this represented a very nice morning's work, since five-eighths per share on 100 shares means a pretty good imitation of £62 10s; but our jobber had a "long head" of his own, and did not believe in " cutting a profit" — i.e., he was "well out" of the shares and could afford to " run " his profit — which he had made up his mind to do ; and his care was duly rewarded, for in a few minutes the secretary to the Railway department affixed a notice on the board that " the Emma mine was flooded," and the shares were soon "unsaleable," being quoted at 1/2 to 1, and Davis was still "out of" the 100 at 2 1/4. He could now rebuy at 3/4 what he had sold before lunch at 2 1/4-, or a profit of £150 on the deal. But, somehow, he still felt a strange feeling of disregard for this particular " coup " ; and on asking himself the cause for this unusual apathy, he suddenly realised that his friend Jones, the broker, was standing oji the outskirts of the market regarding the jobber with a troubled look, which made Davis feel somewhat guilty, even as though he "had picked the other up," as he confessed, _ later on, to a friend. Quickly smothering this up, lie approached the broker with the remark that " Emmas were flat." " Wherever did you get yoiir information about them to make you buy this morning as you did?" he continued. fl Ah tha-t's the rub," replied Jones. "What can you give for them back?" " Ten shillings," said Davis. "Done with you," returned Jones. "One hundred I sell you at 1/2. ' ' All this in a whisper, so as not to be overhoard by the other operators. And Davis promptly entered 100 Emmas bought at 1/2 "to make up," being £175 (one hundred and eeventy-fivo pounds) on the transaction clear gain. "Come Ja lay offioej" eaid Jones % and five

[ minutes later the two were oloseled in Mr Jones's office over a glass of chtret and an eighteen-penny Villar-Villar, Havannah, cigar. " That was a ' good turn ' you gaye me, old ! man, in Emmas," presently re-marked the job- | ber, very quietly. " I should like you to have a day with mo after the pheasants next Haturday, if you will," for Davis hnd a nice bit of cover shooting, of -which he was proud, -which, as it adjoined Sir Moses Montefiore's place, near Three Bridges, was certain to afford good sport, and here he was wont to entertain such of his cronies as he desired to honour. "I'm afiaid I'll never be able to shoot with you again," was the unexpected reply of tJie Broker. "Those 300 shares I bought were for a clerk in the West End. I did not know what he was when he gave- me the order, and was foolish enough not to inquire. I thought he was a West End ' swell '—and now that Emmas are flat he has rung me up on the telephone and says ' that I can cancel the contract or be reported to the Committee of the House as having dealt for a clerk — and, you know, that means expulsion in all probability." [Rule 56 of the London Exchange runs: — " If any member, or authorised clerk, shall do a bargain either for money or time for account of such clerk, they shall be liable to expulsion." Rule 57 says : — " The committee particularly caucion members against transacting speculative business for clerks in public or private establishments without the knowledge of iheir employers."] "So it does, old man," replied Davis, " but the ' deal ' was all profit "to me, and I'll ' scratch the bargains.' " FINIS.