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APPENDIX 
the contemporary wide post-war fluctuations in foreign exchange rates. 
In behalf of the proposal it was urged that a centralization of the 
New York foreign exchange market on the New York Stock Ex- 
change would make for uniform and more stable rates, and would 
make it possible to standardize market practice and enforce com- 
pliance with them in the interest of the public. But it was found 
that the existing organization of the New York money market would 
not coincide with such a plan, and that further difficulties arese in 
standardizing the financial instruments in which the prospective deal- 
ings were to occur. The result was that after some discussion, inter- 
est in the proposal waned and finally died out. 
(XVIIId) “There is one point I think I am justified in referring 
to, and that is the influence of the exchange on the international money 
market. If we had no general market like the stock exchange, and 
no great mass of listed securities which are known abroad as well as 
at home, the movements in the international money market would be 
much more violent and acute than they now are. Today the ordinary 
merchant, or the manufacturer on a large scale, can go about his 
business serenely conscious that he will get his money at from 4 to 6 
per cent at the outside, and he does not concern himself to see whether 
we are exporting gold or not. But if we had no general securities 
market by which we could borrow on securities in Europe and sell 
drafts to meet demands, you would have a most violent and convulsive 
movement of the foreign exchanges, which would react upon the 
whole money market. You would have large exports of gold, because 
there was no other way of meeting obligations or getting credits 
abroad. We have had, as you know, violent fluctuations, in fact, by 
reason of the defects in our, currency system, but they would be 
multiplied many fold if we could not establish foreign credits. As 
you know, there is a class of persons who make it a business of seeking 
a profit of a small fraction of 1 per cent when securities are a little 
higher here than they are in Paris or a little lower in London than 
they are in New York. Their operations tend to keep uniform, com- 
paratively uniform, the supply of credit and they influence the foreign 
exchange market, and thereby travel toward the same stabilizing 
tendency as short-selling and the general functions of the exchange 
itself.” (Regulation of the Stock Exchange, p. 189, testimony of 
Charles A. Conant.) 
(XVIIle) “To close America’s chief securities market, and thereby 
render its $40.000.000.000 of listed securities almost non-negotiable,