CHAPTER XVIII

THE STOCK EXCHANGE AS AN INTERNATIONAL
MARKET

The International Traffic in Securities.—At first glance
it may seem a far cry indeed from the clamorous floor of the
New York Stock Exchange to the distant capitals of Europe,
Asia, and South America. Indeed, many American business
men might greet with incredulity the statement that the banks,
warehouses, shops, and factories of these far-away communities
 have a considerable stake in the swift making of security
contracts which takes place about its posts or in its bond crowd.
Nevertheless, even a brief examination into the actual structure
 of international trade reveals an intimate though often
unrecognized relationship between the great New York security
 market and the foreign demand for American goods, the
great ships which steam slowly out of our Atlantic and Pacific
harbors each day laden with these goods, and American manufacturers
 who produce them in all parts of our country. So
it is, too, with our farmers, lumberjacks, miners, and other
producers of American raw materials. Year in and year out,
and usually without their knowledge, the New York Stock Exchange
 extends no slight assistance to them in the sale of their
products overseas. But before we can come to a right understanding
 of these international functions of the Exchange we
must examine the complicated and little understood traffic in
securities which occurs between different and frequentlv far
distant stock exchanges.

Communication Between Markets by Arbitrage.—A
former chapter has cited the inherent tendencies of markets to
develop closer intercommunication and finallv centralization in