were a jumpy market, and might, for all he knew, be soaring up to 128 or 129 in half an hour's time; and secondly, because Jones, his client, being very rich and a man of leisure, was in the habit of complaining, whenever he saw a glimpse of an opportunity, that his business had been badly done, and that the prices at which he bought or sold ought to have been at least a quarter or so more in his favour. The record of official 'marks' is at once the happy hunting-ground of, and the broker's protection against, this sort of client. When Jones received his contract note next morning, announcing the sale of this 2,000l. Great Eastern stock at 127, he would at once look in his daily paper to see how the price compared with the record, which is always reprinted from the official list. He would find the official marks, perhaps, running 1274, 1, 3, 1, 8, 73, 81, &c., and would immediately compose a lengthy epistle to his brokers, acknowledging the receipt of the contract note, and pointing out that business had been done in Great Eastern stock at 128 and 1281, and implying that his stock had been thrown away at an absurdly low price, ! when a little more care and attention on the part of his agents would have secured much better terms. He ignores, of course, all the lower marks,' and with natural human frailty commiserates himself and blames his broker because he did not obtain the highest price recorded. Jones, who has a stereotyped form for replying to similar effusions from his clients, reads this letter with a tolerant shrug of his shoulders, mutters, Thank goodness I marked that cantankerous beggar's business,' and proceeds to point out that 127% is one of the prices included in the official record, that it was the best that could be got for the stock at the time when he executed the bargain, and that if he had waited for a higher level he ran the risk of a fall to 127 in expecting the chance of a rise to 128. This is the only answer that brokers can give to similar complaints, though it often fails to satisfy clients, who expect their brokers not only to get the best price that is to be had at the moment, but to foresee the movements of markets. A moment's reflection would show them that any broker who had such a gift of foresight would not waste it on executing orders for others for a beggarly commission of an eighth or a quarter per cent., but would apply his power of divination to acquiring an easily-earned fortune on his own account.

The bargain which was selected for an example of the working of Stock Exchange mechanism was purposely supposed to be of the

6

very simplest kind. Such a transaction as the actual sale of real stock is very easily completed. A contract note is sent to the client stating the terms at which the sale was carried out, and deducting the broker's commission and contract stamp from the proceeds. When the settlement, which occurs about once a fortnight, comes round, the name of the actual purchaser of the stock, which may in the meantime have passed through a dozen or twenty hands, or rather books, is supplied to the seller's broker by the clearing-house. A transfer deed is then drawn up, signed and attested, a cheque for the amount is paid by the buyer to the seller, intermediate bargains being settled by the payment of differences,' and the transfer of the stock is carried out in the books of the company, which, after many days, sends a certificate to its new shareholder. But when the transaction is not a real sale or purchase, but a merely speculative bargain, the matter becomes at once more complicated and more simple. It is simplified by the fact that there are no transfers to be made. out, and no stock to be paid for, but it is complicated by the very elaborate machinery involved by the continuation' or 'carrying-over' of a speculative bargain. In the comparatively rare case of a speculator who takes his profits, or cuts his losses, quickly, and does not continue his operations from one account to another, the process is exceedingly simple, as his broker, for example, buys 1,000l. Bertha' at 176 for him on Monday, sells it again on Friday at 177, and so when the settlement comes round debits him 1,760l., credits him 1,775l., and sends him a cheque for the difference, deducting commissions and contract stamps. But when once we plunge into the maze of carryingover into the next account, complications begin to bristle on all sides, and we shall best surmount them with another imaginary concrete example. Our friend Jones sees his way to a mild flutter in District Railway Stock, and buys 5,000l., or 'five Districts' as it would be called, at 30. When the next settlement comes round, the price has fallen to 28, and Jones, who still believes that he will ultimately be able to sell at a profit, but does not want to lock up money by paying for the stock, instructs his broker to carry over the bargain. Smith accordingly goes either to the jobber from whom he bought, or to some other jobber, or to a broker with bear' commitments to carry over or with money to lend, and gives on' five Districts. That is to say, he pays a 'continuation rate' to some one who will take the stock up, either

because he is short of it or because he has money to employ in this way, for a consideration. For a further explanation of these terms, so obscure to the general public, I must be allowed to refer to an article in which I endeavoured to throw some light on them in the CORNHILL MAGAZINE for May. The essential point of the transaction is that the continuation involves a sale of the stock for the present settlement and a purchase of it for the next, at the same price, which is officially fixed for the continuation of bargains and is called the 'making-up' price. When once this point is grasped it becomes obvious that the continuation or carry-over is a misleading term, since every bargain is completed at the settlement for which it was executed, and instead of being carried over is replaced by a new one. This point is important, as it is the stumbling-block in the way of those who would fain include Stock Exchange speculation within the scope of the Gaming Acts. The 'making-up' price of Districts being 281, 1 Jones will be debited with 1,500l. plus the commission for the purchase, and credited with 1,425l., less the commission and carry-over' rate, and so will pay 751. odd, the 'difference' against him, and will start afresh for the next account.

A word of explanation may be useful on the subject of the mysterious symbol xd,' which often appears after quotations. It is an abbreviation for ex dividend, and implies that a dividend recently declared is no longer purchased with the stock. Apart from any such express stipulation, it is obvious that when we buy stock or shares we also buy, although perhaps unconsciously, the right to any dividend that may be declared before we are registered as holders, or may have been recently declared. Investors are often puzzled by this rule, because they do not fully understand it, and consider that they ought to be able to sell their stock on the declaration of a dividend at the high price which the prospect of its immediate payment causes, and still keep the dividend for themselves. If they considered the matter they would see that obviously they must either pay over the dividend to the purchaser of the stock, or else sell at a correspondingly lower price in which the deduction of the dividend has been allowed for. If Mysore shares stand at 5, with a dividend of 2s. 6d. per share declared, it is evident that, since 2s. 6d. is one-eighth, the price will be either 5 cum dividendthat is, if the buyer purchases the right to the dividend-or 43 ex dividend. The custom of the Stock Exchange has happily

hit upon the plan of deducting dividends on a stated day, before which all bargains are cum, and after which all are ex dividend.

It will be observed that this inquiry into the mechanism of the Stock Exchange has treated it as merely a machine for the ransaction of investment and speculation on the part of the public, and it is necessary to emphasise the fact that this is the essential cause of its existence, although outside opinion, from Marryat downwards, is inclined to regard it as a huge gambling establishment, in which the members are chiefly employed in operating on their own account. It is of course perfectly true that many, probably most, members of the House generally back their own opinions concerning the future of prices, but this is not part of the legitimate business of either the broker or the jobber. The broker exists to transact the orders of his clients, and the jobber to buy and sell to brokers, covering his bargains in the market. It may happen that the broker finds himself left responsible for the speculative commitments of a defaulting client, or that the jobber is landed with a line of stock that he is unable to sell, or caught short of securities that he cannot buy; but these are exceptional occurrences, and apart from such occasional freaks of fortune, speculation is not only no part of the Stock Exchange member's business, but actually hinders him in its proper fulfilment. A broker with a big 'book' open for the rise or fall is necessarily biassed by it in advising his clients concerning their own operations, and a jobber, in the same circumstances, is more than likely to take fright when the market becomes agitated, and to refuse to make prices' and do the work that justifies his existence just at the time when his services are most urgently required.

A NIGHT IN VENICE.

HAROLD BRAND was a British person of twenty-four, moneyed and cosmopolitan. The way in which he dashed away his hair, which drooped from the parting, was characteristic of him; his blue eyes were quite alert; his blood fresh and brisk. But Woman, somehow, had hitherto engaged little of the interest of his free manhood. She, he guessed, would come; and meantime the bustling world was a keen concern and pleasure to him. Till, on the third day of Carnival, he beheld a chin, white between the draperies of a gondola cabin; and this he followed.

Venice, the mysterious! By Martedì Grasso (Shrove Tuesday) he had already brushed the lips above the chin, and was told that he did it in peril of his life. That was a great carnival-night, the Venetians in wild fête. Gliding eastward he could hear the revelry from the Place of St. Mark, and at eleven was at the old Procurator Palace, where a municipal masquerade was in full gala reel. By twelve he had left the roulette-room, had descended a stairway, and walked on the tufted carpet of a dim corridor. He found himself alone with her.

Her bosom heaved. Her eyes were like bright, black moons behind her mask.

'Listen!--I was foolish, you see. These tassels may be ears-believe me

We cannot speak here.

To him it was incredible. He was unable to sympathise with her agitation. Yet that chin, the emphasis of these tones, could hardly appertain to one given over to fancies. She posed with one projected slipper, the other hip supporting her palm. He stood admiring the dash and curve of her, the young full figure clasped in a trainless dress of amber silk. A tabura, or mantilla of black lace, fluttered from her head.

'But, Belvidera, I say, do not agitate yourself' with a tenderness new to his voice; what I had to say is this: they have summoned me back to England-soon. Am I to go alone? are beset with dangers, as you say, that is the more reason

If you

'Dangers?'—her fan touched his arm- but not to meHarold. It is for you I fear-dear. He dares not hurt me, you see? His motives for wishing me dead are too evident, and there is law, isn't there? . . . But you! you cannot guess Mauro Bellini's powers-the number of his sworn emissaries