The Stock Exchange has been described as the mart of the world; as the nerve-centre of the politics and finances of nations; as the barometer of their prosperity and adversity; and so on. It has also been described as the bottomless pit of London, and as worse than all the hells. Perhaps, however, the Stock Exchange can best be defined and described as a market. Just as Smithfield is the market for meat and Covent Garden the market for flowers, fruit, and vegetables, so is the Stock Exchange the market for stocks and shares.

These stocks and shares, as everyone knows, are, roughly speaking, sleeping partnerships. The holder of railway stock is a part-proprietor of the railway, and is entitled to his proportion of its profits; the holder of shares in a mining company is similarly part-proprietor of the mine. Even although the holders of the stocks of a nation, such as Consols, or of the debenture stocks of a company, are creditors and not proprietors, they depend, for the income which those stocks yield them, upon revenue and profits, just as does a partner in a business.

It will at once be seen that although the Stock Exchange may be defined as a mere market, the wares that are displayed and dealt in are of such importance as to entitle it to the more ambitious definitions with which it has been exalted. It is worthy of being defined as the mart of the world, because these wares represent property in every part of the world, and because the orders which are executed in this mere market emanate from all over the world. The business of the Stock Exchange is more varied and cosmopolitan than that of any other mart, except, perhaps, the Money Market. The business of the Stock Exchange may be described as the business of businesses. The institution may be defined as the nerve-centre of the politics and finances of nations, because in this mere market all that makes history is focussed and finds instantaneous expression. It is worthy of being defined as the barometer of their prosperity and adversity, for a glance at the tone of this mere market, whose wares are more mercurial than these of any other mart, suffices to indicate their condition. It may almost be said that the price of Consols is the welfare of the world expressed in one figure.

Perhaps the Stock Exchange is unworthy enough to be defined as the bottomless pit, and to be described as worse than all the hells, if we look at the mere market from the point of view of those who abuse the facilities which it offers for free dealing—but only from that point of view. Without the Stock Exchange our commercial and industrial life could never have attained its modern refinements. Indirectly this institution provides the sinews of industry and commerce, or, at all events, that one great sinew, capital. The inventor with an idea to develop, the trader with a business to expand, the pioneer with a country to explore, the Government with a scheme to finance, all betake themselves eventually to the Stock Exchange.

It is the organisation of capital for speculation and investment, even as the banks are the organisation of capital for loans. Its members are in close touch with all the capitalist investors and speculators in the country, and can lay any scheme for which the financial sinews are required before them. Moreover, in providing a free market for the securities upon which the money is subscribed, the Stock Exchange tempts subscriptions, and indeed renders them possible where otherwise they might not be. Most people would hesitate to part with their money in exchange for even the best securities, did they not feel assured that, if necessity arose, they could readily obtain its return by selling the security in the free market which the Stock Exchange affords. But for the Stock Exchange, even the Government would find a difficulty in borrowing; whilst great schemes, national, commercial, and industrial, would languish in the lack of a ready flow of capital. Railways could not traverse the land nor ships the sea; enterprise would be discouraged, and the original and progressive ideas of clever men would decay undeveloped. Thus the Stock Exchange is linked closely with the prosperity of the world in general and of the nation in particular, and it has grown with the development of that prosperity.

Some very fair idea of how it has grown is obviously conveyed by a statement of the nominal value of the wares in which it deals. It is impossible to form an estimate of the whole of the enormous amount, as there are dealings in so many securities which are not recognised in the Official List of the market. But the nominal value of the securities thus quoted at the end of 1912 reached the enormous total of £10,990,249,126; this comparing with £8,787,316,406 in 1902, an increase of £2,202,932,720, or no less than 25 per cent. In other words, the amount of securities officially quoted in the Stock Exchange is one-quarter larger than it was a decade ago.