The New York Stock Exchange is typical of most American stock exchanges, the leading ones of which are located in Boston, Pittsburgh, Philadelphia, Chicago, Baltimore, Cleveland, Cincinnati, New Orleans, Salt Lake City, Denver, San Francisco and St. Louis. American stock exchanges differ somewhat in their operation from the foreign stock exchanges, the principal ones of which are those of London, Paris, Berlin, Amsterdam, Antwerp, Brussels, Vienna and Petrograd.

A stock exchange is really an organization of professional brokers, which conducts speculation and investment in securities, the paper representatives of transportation, industrial, mining, commercial and other properties. On the American stock exchanges one broker may specialize in the shares of the Union Pacific Railroad, for instance, another in those of the United States Steel Corporation, and so on. Some brokers deal particularly in "odd lots" - blocks of less than one hundred shares - and some members, called "room traders," speculate entirely for their own account and do no commission business for customers. The commission charged for buying or selling is twelve and a half cents a share, so that on the usual order of one hundred shares, the broker receives twelve dollars and a half.

The business of buying and selling shares is done in a large room known as the "floor." Scattered over the floor are a large number of high posts. Each post bears the name of the stock or stocks which may be traded in at that post. This provision is to bring buyers and sellers in any security together as quickly as possible. A broker desiring to buy shares of a certain stock will go to the part allotted to that stock and call out its name with the number of shares wished and the price he will pay. This is his bid. Other brokers may offer the stock to him at a slightly higher price, or his bid may be accepted at once. As soon as a price is agreed on, each broker - the buyer and the seller - makes a memorandum of the transaction, which is reported to the offices at once by telephone. Meanwhile the broker also hands another memorandum of the transaction to an errand boy, who takes the memorandum at once to the telegraph operator, who in turn sends it out onto the little instrument called the "ticker."

Transactions on the New York Stock Exchange may be made in three different ways: "Cash," "regular" or on a "limited option" to buyer and seller as to the time of delivery or acceptance. "Cash" means that stock bought in this manner is taken up and paid for the same day; "regular" transactions mean that the stock bought in this way must be taken up and paid for by a quarter past two o'clock of the following afternoon.

Upon the outbreak of the European war, panic ensued among holders of securities, and the stock exchanges of the world were closed to prevent the selling of stocks at prices which would have brought ruin to banks and other financial houses. Practically none of them were opened until December, 1914, and then only under severe restrictions which were held in force until confidence had returned.