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

Usage license:: Get license information via the feedback formular.

Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Chapter VII. Credit transactions in securities

Collection:: Economics Books

CREDIT TRANSACTIONS IN SECURITIES 177 Fallacies Regarding Credit.—In spite of the extensive and time-honored employment of credit in business, compara- tively few men ever stop to analyze in detail exactly what credit is. In consequence, the average business man is only too apt to be puzzled when he is asked, “How can a man buy something which he doesn’t want to keep and when he hasn't enough money to pay for it?” or “How can a man sell something which he doesn’t own?” Superficially considered, both of these ques- tions would seem to imply a lack of business morality. And yet the simple answer to both these questions obviously is, “By using credit.” Thanks to the vast extension of our credit machinery during the past century, the deferred payment of money and the deferred delivery of goods have both become a daily commonplace, not merely in Stock Exchange transactions. but in every conceivable kind of modern business. One phase of this universal use of credit deserves considera- tion at this point. Although a sale is really an exchange of money and goods, our inevitable habit of thinking only on the money side of what is necessarily a two-sided transaction makes it easier for the average man to understand a deferred payment of money than a deferred delivery of goods. Owing someone money is an experience with which, fortunately or unfortu- nately, most of the human race is only too well acquainted, whereas owing someone goods—whether it be an overcoat, a barrel of molasses, or a share of stock—is apt to seem a novel and highly perplexing situation. Debts in Terms of Goods.—Yet a moment's thought will show that it is no more unnatural to owe goods than to owe money. In ancient times, long before money had been in- vented, all trading was necessarily conducted entirely by barter, which consists of an exchange of goods for goods. Thus an ancient Roman would exchange his cattle for someone’s bronze implements, or an American Indian would barter his furs for another Indian’s corn. In point of historical evolution, there- fore, it is altogether probable that credit was used to defer a

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