Choosing A Broker
It is very important that you choose a good broker. No matter how
careful you are, it is possible to make a mistake. However, if you
choose a broker who is a member of the New York Stock Exchange, you have
eliminated a very large percentage of your chances of getting a wrong
Occasionally a member of the Stock Exchange fails and once in a while
one is suspended for running a bucket shop or being co
nected with one,
but these instances are very rare compared with the number of brokers
who get into trouble who are not members of the New York Stock Exchange.
The rules and regulations of the Stock Exchange protect you to a great
When you buy stock on margin, you leave your money in the hands of a
broker, and you should know that he is responsible. No matter who your
broker is, you should get a report on him. If you are a subscriber to
Bradstreet's or Dun's Agencies, get a report from them. If you are not a
subscriber to any mercantile agency, you perhaps have a friend who can
get a report for you, or your bank may get one for you. Banks make a
practice of getting reports of this kind for their clients. When asked
to do so, we send our clients the names of brokers who are members of
the New York Stock Exchange, but we prefer not to recommend any broker.
Of course, we cannot guarantee that a broker is all right. We simply use
our best judgment, but, as we said before, you eliminate a large
percentage of your chances of going wrong when you trade with a broker
who is a member of the New York Stock Exchange.