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 XI. The security collateral loan market

Collection:: Economics Books

300 THE WORK OF THE STOCK EXCHANGE but inevitably necessary in any country whose government or whose business companies depend on security issuance and distribution. Without the wisely provided facilities for carry- ing Liberty bonds in collateral loans (which incidentally proved highly speculative to millions of holders, and yet which were rediscountable at the Reserve banks), those enormous war issues could not have been effectively distributed. Thus the economic services of security call loans might be briefly summarized as providing lenders with safe, liquid and flexible investments and thereby minimizing commodity or land inflation, and borrowers with funds which, while immediately used in security speculation and investment, ultimately facili- tate the security distribution necessary to mass production, low manufacturing costs, high wages and high average standards of living in this countrv.?® Preference for Commercial Loans.—In modern banking practice, preference is always accorded to commercial over security loans.?” This is due in part to the fact that when the tenets of modern commercial banking were formulated in Eng- land in the beginning of the nineteenth century, the wholesale merchant was the great outstanding figure in business, and tne wholesale manufacturer who needed to obtain elaborate pro- ductive equipment by the sale of company securities had not yet appeared. But, although this condition has since been reversed, there is still sound reason for granting preference to genuine commercial loans over security loans. For the general function of commercial loans proper is to enable foodstuffs and merchandise to be freely and readily transported and dis- tributed from producer to consumer. This process is of course absolutely necessary not only to modern trade but even in part to an ability on the part of our population to exist. To take an extreme case, many mouths in Wall Street would soon go hungry if the transport of foodstuffs into New York City could not be readily financed. 2 Appendix XII. 27 See Appendix Xe.

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