ORGANIZED SECURITY MARKETS 43 
the stock market on the New York Stock Exchange is already 
organized and is ready at all times to absorb your buying or 
selling orders. 
The usefulness of this quality of marketability which stock 
exchanges confer upon their listed securities has often been 
demonstrated by the very different behavior of the organized 
and unorganized security markets during a crisis. The latter 
type are “fair weather” markets, which do well enough per- 
haps while rosy optimism reigns, but which have a disconcert- 
ing way of vanishing almost completely when the pressure of 
heavy selling appears. During a drastic decline in security 
prices, the loosely organized security markets for the time being 
simply cease to function. The issues ordinarily marketed there 
are rendered practically unsalable. Under the circumstances, 
the banks naturally hesitate to lend funds on such non-negotia- 
ble security collateral. But on the Stock Exchange, though 
prices may fall sharply, security holders can always sell at a 
price, and furthermore they are more quickly furnished with 
actual sales prices by which to judge the current value of their 
holdings. At such times, however, many security holders are 
apt to sell their Stock Exchange securities to protect their 
unsalable non-listed securities, and in this way the organized 
market is forced to bear the brunt of the whole selling move- 
ment in all securities. 
One important reason for this continued negotiability of 
listed securities arises from the “short sale,” as will be pointed 
out in more detail.’ At times, the only buying power in the 
stock market consists of the so-called ‘‘short-interest.” No one, 
as a rule, sells short in an unorganized market because of the 
difficulty of borrowing stock to deliver, and as a result in such 
a market holders are not protected in a crisis by the existence 
of a “short interest.” As a rule, also, the superior quotation 
service of a stock exchange more quickly draws the attention 
of bargain-hunting investors to securities whose price has 
6 See Chaoter VIL. o. 198.