Die Social-Demokratie

Bibliographic data

Monograph

Identifikator:: 826719449

URN:: urn:nbn:de:zbw-retromon-30888

Document type:: Monograph

Author:: Schuster, Richard

Title:: Die Social-Demokratie

Place of publication:: Stuttgart

Publisher:: Steinkopf

Year of publication:: 1875

Scope:: 1 Online-Ressource (XII, 236 S.)

Collection:: Economics Books

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

SECURITY COLLATERAL LOAN MARKET 299 Are Call Loans Legitimate?—OQccasionally financial writers attempt to draw a distinction between commercial loans and security loans by referring to the former as “legitimate,” with the implication that the latter are really not legitimate, however convenient and safe they may be. Any such distinc- tion is vague and fallacious, for security loans are as legitimate in purpose or function as any other form of loan, although not perhaps quite so essential as commercial loans made actually to transport merchandise from producers to consumers. Security loans result as a rule from speculative operations, just as practically all commercial loans do also, but speculation is not “gambling,” ** nor is it accurate to term either class “gambling loans,” either on legal or economic grounds. It is a similar confusion of thought that leads occasional persons to declare call loans “inflationary.” No doubt inflation in the stock mar- ket is sometimes unconsciously facilitated with the aid of call loans, just as it is in commodities by commercial loans, or in land by mortgage loans. Yet of these three, inflation in the stock market is the least dangerous, as the events of the 1919-21 inflation clearly prove, for the security market is a surplus capital market by nature and is much more easily deflated than either commodities or land. As a matter of fact, were inflation (using that term in its broad sense) absolutely prevented in the stock market, it would probably be forced in commodities and land; to some extent just this result occurred in 1918-21, following the necessary but artificial limitation on security loans during the war-time “money-control” period. [n Chapter IV upon “The Distribution of Securities,” the essential character of the floating supply of securities has been pointed out. The carrying of this floating supply of securities, or stock market inventory, is done with security loans, just as the similar unsold inventories of commodities are carried by commercial loans. Without security loans, securities could not be distributed, just as without commercial loans commodities could not be distributed. Security loans are not only legitimate % See Chapter V, p. 126.

Access restriction

Copyright

fullscreen: Die Social-Demokratie

Monograph

Table of contents

Download

Monograph

Chapter

This page

Image fragment

Citation links

Citation recommendation