10 THE WORK OF THE STOCK EXCHANGE
commodities. If the price of capital is today mainly estab-
lished on the New York Stock Exchange in Wall Street, so too
the price of cotton is made chiefly on the New York Cotton
Exchange in William Street, and the price of cereals chiefly
on the Chicago Board of Trade. This higher centralization
of wholesale trade, whether conducted on exchanges or not,
is a normal and desirable economic evolution, and in the long
run legislation should not attempt artificially to halt it. More
and more, therefore, in this day of steam railways, telephones,
telegraphs, radios, cables, stock tickers and airplane mails,
there is a steadily increasing trend toward the centralization
of markets, and the subordination of all but the great central
market places to more purely local operations. This trend does
not, however, necessitate the decline of local markets, but
merely develops in them local and special functions which they
are best able to perform.
In the United States, the tendency toward centralization
of markets is clearly shown by the Federal tax statistics * on
security and commodity sales, according to which about nine-
tenths of stock sales in this country occur in New York City
(either on the New York Stock Exchange—the largest Amer-
ican organized security market, or on the New York Curb
Market—the second largest American stock exchange, or in
the unorganized New York “over-the-counter” market), while
a large proportion of exchange transactions in produce occur
either in Chicago on its Board of Trade or in New York on
its several commodity exchanges.
Economic Functions of Organized Securities Markets.—
The benefits of the higher organization of securities markets
into stock exchanges have been recognized throughout the
civilized world for at least the past century, not only by prac-
‘ically all economists who have adequately studied the subject,
and by every competent governmental investigation ever made
concerning them, but also by millions of individuals in their
Tac Appendix IIb.
