£5,000 far a Seal.

New Zealand Graphic, Volume XXXIV, Issue 5, 4 February 1905, Page 24

£5,000 far a Seal.

WHAT STOCKBROKERS PAA’ FOR THE PRIVILEGE TO WORK.

By the drastic teew rules that have been drawn up by the London Stock Exchange, the number of members is strictly limited, says “Answers.” Under this scheme, any financier who would seek a seat among this august body will have to bide his time until a vacancy occurs. Consequently, these openings will be eagerly sought after, and are regarded in much the sanie light as an ordinary financial speculation. As the last day for receiving applications arrived; there was a rush to secure election. There were, in all, six hundred applicants, representing a sum of £195,000 in entrance fees and annual subscriptions. The sums that had to be paid down varied from £250 to 500 guineas. The smaller sum is paid by former clerks, desirous of admission, who have served some existing member for a prescribed number of years; while the latter entrance fee is that extracted from what, in Stock Exchange parlance, are called “three-deckers”—i.e., men who have not fulfilled the capacity of clerk to a member. Bee' -iyiilar to those hecompanying the dc<„,e to fill a vacancy on the Exchange, which occasionally characterise the succession to a scat on a foreign

Bourse, may be anticipated in the future.

One of the most momentous of these rushes occurred during a financial boom on a well-known foreign Stock Exchange two or three years agp. A vacancy occurred, and there was a large crowd of financiers anxious to secure it. The scenes which arose were reminiscent of a great sale at Christie’s, when a valuable painting is pult up for auction. The price of the seat started at a paltry few pounds. Jn less than an hour £lOOO was offered. Then followed bills of £5OOO up to £lO,OOO in rapid succession. £15,000 soon gave way to £20,000, and at this hugwpriee the bidding slackened down: but it was finally knocked down at £25,000. At first sight it may appear a ridiculous sum to pay for such a. privilege; but it, at all events, testifies to the financial stability of Hie ne v member, and therefore such bidding is encouraged by the executive. Already some fabulous prices have been offered for seats upon our own Stock Exchange. In order to ensure securing a vacancy, one financier Ims bought the option upon all nominations within five years for £2OOO. Another individual who is anxious to secure his seat has planked down £750 for a nomination. while deals at £5OO are comparatively common. But the buying of nominations has shown, as was anticipated, that the new rules will, in a measure, form- an oldage pension scheme for members who • may happen to have the ill-luck to retire “broke!”

The Exchange is faced.by a peculiar problem. It is out-growing its house. The total membership at present numbers 7811 persons. If all were present on the floor of the Exchange, the “seat” for each member would only be a standing space of about twenty square inches.

In 1900-1 no fewer than 477 new members joined—a much greater number than have entered their names so far in the rush. The new rules authorise the committee to fix each year the maximum number of new members to be admitted that

year, apart from those with nominations. Fifty has been proposed as the utmost limits of the maximum entry to be allowed iu any year. Twenty has been passed ns the number for next year, ft is this which has put up the value of nominations.

The new rules will also make membership more eostly. For every new member is to take up one or more £ioo proprietary shares in the Stock Exchange Company—now stepping out towards the price of £250 per share. But it will no longer be necessary to have served as a clerk.