BROKERAGE AND COMMISSION.

403. BROKERAGE is the percentage paid to a dealer in money and stocks, called a broker, for making exchanges of money, negotiating different kinds of bills of credit, or transacting other like business.

404. COMMISSION is the percentage paid an agent, factor, or commission merchant for buying or selling goods, making collections, or transacting other business.

405. When the person transacting the commission business lives in a foreign country, he is frequently called a correspondent or consignee.

The goods shipped or forwarded to a consignee to be sold on commission are termed a consignment, and the person sending or consigning the same is called the consignor.

406. The rate per cent. of brokerage or commission is not regulated by law, but varies in different places, and with the nature of the business transacted.

Brokerage and commission are computed in the same man

ner.

407. To find the brokerage or commission on any given.

sum.

Ex. 1. Paid a broker, for exchanging $896 uncurrent bills for par funds, 2 per cent. brokerage. How much was the brokerage? Ans. $17.92.

Since brokerage is a percentage on the given sum, the brokerage on $ 896 at 2 per cent. will be $ 896 X .02 $17.92.

RULE.

=

Find the percentage on the given sum at the given rate per cent., and the result will be the brokerage or commission.

NOTE. When the brokerage or commission, and the sum on which it is reckoned, are given, the rate per cent. may be found as in Art. 348.

EXAMPLES.

2. My agent in New Orleans has purchased cotton, on my account, to the amount of $18768. What is his commission at 12 per cent.? Ans. $328.44.

3. I have engaged a broker to purchase for me 12 shares in the New York Central Railroad, at $112.25 per share; what is his commission at per cent.? Ans. $3.363.

4. My agents, Hilton and Marcy of Cincinnati, advise me that they have purchased on my account a cargo of pork, consisting of 700 barrels, at $ 12.25 per barrel; what is their commission at 12 per cent.? Ans. $150.06.

5. What rate per cent. of brokerage does a broker charge who takes $50 for investing $10000?

6. What is the commission on the sale of 173cwt. of sugar, at $8.95 per cwt., at 17 per cent.? Ans. $29.03.

7. My factor at Mobile advises me that he has purchased on my account 37 bales of cotton, at $107.75 per bale; what is his commission at 3 per cent.? Ans. $14.95.

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8. A consignee in London writes that he has purchased for his employer goods to the amount of 395£. 15s. 5d.; what is his commission at 21 per cent.? Ans. 8£. 18s. 16 d. 9. Paid G. Willis $5.46 for exchanging $364 of depreciated currency; what was the rate of brokerage?

Ans. 1 per cent.

408. When the given amount includes both the brokerage or commission, and the sum to be invested.

Ex. 1. A gentleman intrusts $ 20050 to a broker in New York City, with instruction, after deducting his brokerage of per cent., to invest the balance in government bonds. What will be the sum invested, and how much will be the brokerage?

=

OPERATION.

$1.0025

$20000, Investment.
$50, Brokerage.

$20050
$20050 $20000 =

Since the broker is entitled to 1 per cent. of the sum he invests, it is evident he requires $1.0025 in order to invest $1. Hence, the investment he can make will be as many dollars as $ 20050 contains times 1.0025, or $20000; which, being subtracted from the amount forwarded him, leaves as his brokerage $50.

RULE. Divide the given amount by 1 increased by the rate per cent. of brokerage or commission, expressed decimally, and the quotient will be the investment.

Subtract the investment from the given amount, and the remainder will be the brokerage or commission.

NOTE. When the brokerage or commission and the rate per cent. of the same are given, the sum on which it is reckoned may be found as in Art. 349.

EXAMPLES.

2. An agent receives $ 1976, which includes the sum he is to lay out in goods and also his commission at 4 per cent. How much of the amount is to be expended for the goods, and how much is his commission?

Y

Ans. $ 1900 for the goods; $76 commission.

3. A broker receives $ 8341.50, which includes a sum to be invested in railroad shares at $ 83 each, and his brokerage at per cent. How many shares can he purchase, and how much is his brokerage? Ans. 100 shares; $41.50 brokerage. 4. Sent to my agent, John Crowell, Rochester, $8960, to purchase a quantity of flour; his commission is 2 per cent. on the purchase, which he is to deduct from the money; what is his commission? Ans. $175.6832.

5. A town has levied a tax of $5150, which sum includes the amount voted for the repairs of a bridge and the collector's commission of 3 per cent. How much was voted for the bridge, and how much does the collector receive for his commission? Ans. $5000 for the bridge; $150 commission.

6. What amount of money has been invested when the broker's charges, at 1 per cent. for making the investment, amount to $285?

7. A commission merchant purchases for me in New Orleans 34 boxes of sugar, pays for cartage and freight $7.59, and his commission is 1 per cent. on the amount of purchase, making the whole bill $740.833. How much was his commission, and, allowing 250 pounds to a box, how much a pound did he pay

for the sugar? Ans. $10.83 commission; $0.08 per lb. 8. Sent a cargo of flour to Liverpool, which my factor sold for 987£. 18s. 6d. He invested this sum in broadcloths, at 1£. 3s. 8d. per yard. His commission for selling the flour is 2 per cent., and for purchasing the broadcloth 17 per cent., and he is to receive his commissions, for selling and buying, out of the proceeds of the flour. Required the number of yards of broadcloth that I should receive. Ans. 801-37yd.

ACCOUNT OF SALES.

409. AN Account of Sales is an account of goods sold, which a commission merchant or consignee, &c. furnishes to his employer. It contains the quantity and price of the goods disposed of, charges attending the sales, and the net proceeds, or the sum to which the owner, or consignee, is entitled after all charges are deducted.

The names of purchasers are often included in the account of sales, as in Example 1, and sometimes the mark of the box, bale, &c., as in Example 2.

410. The gross amount of sales is the sum of all the quantities at the prices given; and the net proceeds are found by deducting the commission at the given rate, and the other charges, from the gross amount.

Find the commission and net proceeds required in the following

EXAMPLES.

1. Account of sales of flour received by the steamer Calvert, from Baltimore, sold on account of James Taylor, Ellicott's Mills.

Commission on $ 2180.00, at 24 per cent., $49.05

2. Sales of goods, made by Haskell, Fargo, & Co., on account

of Jones, Boker, & Co., New York.

411. PROFIT AND LOSS is the process by which merchants and others estimate their gains or losses in business transactions.

Gains and losses are usually reckoned on the prime or first cost of articles.

412. To find the selling price when the cost and the gain or loss per cent. are given.

Ex. 1. If I buy cloth at $4 per yard, for how much per yard must I sell it to gain 25 per cent.? Ans. $5.