Page:Harvard Law Review Volume 8.djvu/457

Rh The principal rules and customs regulating the manner in which stockbrokers who are members of a Stock Exchange can deal on the floor of the Stock Exchange to which they belong for the purchase and sale of securities have now been described.

Acting in accordance with these rules and customs, stockbrokers can affect various transactions in the purchase or sale of securities for customers who may wish to employ them. The commonest of all these transactions is a simple purchase or sale of securities for a customer who has money which he wishes to invest in securities or owns securities which he wishes to dispose of. The way this transaction is performed is as follows. The first step is for the stockbroker to contract on the floor of the Stock Exchange to buy or to sell the securities the customer wishes bought or sold, either "for cash" or "in the regular way" as the customer may prefer. The stockbroker contracts, as has been stated, in his own name and becomes personally bound to perform the contract or contracts he makes. If he performs with the securities the customer wishes to sell or with the money he wishes to invest it is obvious the customer's desires will be fulfilled. This is the course the transaction regularly takes. For as soon as the stockbroker has contracted the customer supplies him with the means to perform by either giving him the money to pay for the securities he has contracted to buy or the securities to deliver which he has contracted to sell. The stockbroker then performs his part of the contract or contracts he has made and should simultaneously receive from the stockbroker or stockbrokers with whom he has contracted the securities he agreed to buy or the purchase price for the securities he agreed to sell. He then accounts to the customer and gives him the money or the securities he has received. This completes the transaction so far as the purchase or sale of the securities is concerned. The stockbroker, however, must be paid for his services. Even if he were willing to act without compensation, he cannot do so, for the rules of all Stock Exchanges provide that a