ordinary ways this increased value will be
shown in the market price of the stock, but an issue of more stock to the
present holders of stock certificates will keep down the price of
individual shares and yet give the benefit of the increased value to
shareholders.

_The stock exchange._--The last mentioned forms of indebtedness so easily
become matters of everyday purchase and sale as to lead to the business of
stock brokerage, found everywhere in greater or less extent. In large
cities the brokers naturally unite for convenience of business in the
so-called stock exchange, in which the market price of all current forms
of indebtedness or deferred payments is fixed from day to day, or from
hour to hour, by the higgling of the market, just as the price of produce
is fixed in the produce exchange. Naturally, as in the case of produce, a
fictitious business, purely speculative, grows up around the legitimate
dealing in stocks and bonds. Other forms of deferred payments enter less
into the business of the brokers, because the market value of any
particular mortgage or individual note cannot be easily determined outside
the immediate neighborhood where it is made. The chief way in which these
enter the general brokers' market is through the stock or bonds of large
brokers' companies, sometimes called guaranty loan companies. In this way
the universal extension of credit through deferred payments finally has
its effect upon the general confidence. The broker's business grows
legitimately out of the need of ready transfer of claims, for the sake of
larger use of the floating capital of the country, and readiness of
investment in more fixed forms. It adds, however, to the dangers of
extended credit by making more easy the gratification of present wants
through expectation of future ability. The broker makes his gain, without
reference to the final settlement, by taking a commission upon the loan.
His interest leads to an overestimate of the borrower's ability, and cases
are not infrequent where appraisers of real estate have been hired by
brokers to misrepresent the value of property, for the sake of securing
improper loans.

Every period of expanding credit in speculative movements has furnished
proofs of this tendency. A standing example is furnished in mining stocks,
in which the temptation to misrepresent prospects by "salting" and false
assays is proverbial. Almost as notorious are the misrepresentations
associated with