MARKET METHODS AND PROBLEMS 491 



standard of commercial honor in the trade very much higher than 

 would otherwise exist. The greatest care is exercised in electing mem- 

 bers, and the new member must agree to abide by the constitution of 

 the exchange and all subsequent amendments thereto. Expulsion is 

 the penalty in case a member fails to comply with the terms of any 

 business obligation or with the award of any committee of arbitration; 

 or in case he deals in differences in the fluctuations of the market or is 

 connected with any bucket shop. All orders must be executed in the 

 open market and no customers' trades can be taken by members for 

 their own account, either directly or indirectly, on pain of expulsion. 

 Expulsion is also the penalty for making or reporting any false or fic- 

 titious purchase or sale, or for being guilty of bad faith, dishonorable 

 mercantile conduct, or for any attempt at extortion ; and when expelled 

 no member may transact business upon the floor in his own name or 

 through any broker or employee. No member is allowed, under any 

 circumstances, to be both principal and agent in any transaction; nor 

 may a member either by his own act or by the act of another member 

 or broker be placed in the position of agent for both seller and buyer. 



For the benefit of the trade the exchange regulates the inspection, 

 grading, weighing, storage, and shipment of grain, the brokerage 

 charges for the various services rendered, and the deposits necessary 

 to secure the fulfilment of time contracts. Trade committees are 

 appointed for the several kinds of produce, to decide disputes, and 

 interpret the usages prevailing in each. Weighers and inspectors are 

 appointed and licensed, and agreements are frequently effected with 

 warehousemen and transportation companies. The rights of the 

 respective parties in the various kinds of contracts are minutely pre- 

 scribed; the settlement of such contracts is outlined in detail; and 

 in case of insolvency, the method of procedure is carefully defined. 

 Lastly, all business disputes are arbitrated quickly and cheaply. So 

 high is the standard of the decisions of the committees of arbitration 

 that they are often given the force of law by the highest courts. 



Special reference should be made to the supervision of exchanges 

 over the inspection, grading, weighing, and storing of produce, and 

 the issuance of "general warehouse receipts" to represent title to the 

 same. To make possible the convenient transfer of property from 

 buyer to seller by the mere transfer of a receipt calling for a given 

 amount of goods of a stated quality it is essential that all the factors 

 preliminary to the issuance of such general receipts should be thor- 

 oughly supervised, so that the genuineness of their face value will go 



