This paper is submitted in the hope that it will assist members who are not actively concerned with investment matters to obtain a reasonably clear picture of the Stock Exchange and how it works.

The main object of the Stock Exchange, as an institution, is simply to provide a market for stocks and shares, i.e. rights to interest or dividends. Such a market has been in existence in one form and another since the latter part of the seventeenth century, and is virtually a necessity in the modern capital structure. Without it the investor would be loth to lock up his money in a joint-stock undertaking, and, if he did, would have difficulty in assessing the value of his holding at any time. Moreover, he would have little to guide him in making the best use of his capital and, on the other hand, companies requiring funds (to say nothing of the Government) would find it hard to guess the best terms for a new issue.