The work of the Stock Exchange

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Monograph

Identifikator:: 1831284952

URN:: urn:nbn:de:zbw-retromon-225876

Document type:: Monograph

Author:: Meeker, James Edward http://d-nb.info/gnd/126597340

Title:: The work of the Stock Exchange

Edition:: Revised edition

Place of publication:: New York

Publisher:: The Ronald Press Company

Year of publication:: [1930]

Scope:: XVI, 720 Seiten; Illustrationen, Diagramme

Digitisation:: 2022

Collection:: Economics Books

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Document type:: Monograph

Structure type:: Chapter

Title:: Chapter IV. The distribution of securities

Collection:: Economics Books

THE DISTRIBUTION OF SECURITIES 87 carry on and expand their business. Their frequent need for small sums for short periods can of course be supplied by the banks on their notes and commercial paper, although there has been in recent years a strong tendency to obtain permanent funds by the sale of securities rather than to depend upon short- term banking accommodation. Reorganizations, extensions, or large permanent improvements and the like, usually call for large sums and over long periods, which can be supplied only through the sale of the corporation’s stocks or bonds. Small corporations under exceptionally favorable circum- stances are sometimes able themselves to dispose gradually of small issues of their stocks or bonds direct to their stockholders or to purchasers of their products. Such a procedure, however, is impossible with large security issues, and is usually imprac- ticable even with small ones. The large sums needed by cor- porations must usually be had all at one time rather than in small successive payments over a period of time. Moreover, the average railroad or industrial corporation is apt to lack the long experience and necessary facilities to engage in the security business on its own account. In most cases, therefore, it becomes necessary for the corporation needing extensive and long-term financing to have some investment house underwrite and market its securities. The Security Underwriting Business.—This business of underwriting and marketing new security issues is to some extent carried on in every large city in the country. But the national headquarters of the business—so to speak—is centered in the financial district of New York City, where the great underwriting houses and the Stock Exchange are located. Most of the larger issues of securities, representing industries of national scope and significance, are in consequence “brought out” in that city, while the smaller and more localized banking and brokerage groups in Boston, Chicago, Philadelphia, and lesser centers, for the most part underwrite smaller and more localized enterprises. In addition, as we shall presently observe,

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