CHAPTER XIX. 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 broker.
Occasionally a member of the Stock Exchange fails and once in a while one is suspended for running a bucket shop or being connected 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 extent.
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.