52 THE WORK OF THE STOCK EXCHANGE 
the willingness of lenders sometimes to accept active speculative 
shares as collateral in preference to more conservative but 
comparatively inactive investment issues. 
A subsequent discussion will cover the significance of 
security collateral loans to the ready distribution of securities, 
to the New York money market, and to American business in 
general.® 
6. Increased Availability of Capital for Investment. 
The enhanced facilities resulting from the higher organization 
of a securities market into a stock exchange perform a con- 
tinuous and important economic service in putting capital and 
‘investments into close touch with each other. Due to the 
nation-wide extension of the Stock Exchange ticker service, 
and the fanlike spread of wires connecting Stock Exchange 
member offices in New York with their branch and corre- 
spondent offices throughout the country, capital can easily flow 
into or out of the leading security issues in the American 
market. This service, of course, greatly increases the national 
habit of thrift and security investment. It prevents capital 
from remaining idle, and provides a ready incentive to public 
security buying that has proved of enormous importance to 
large-scale American business enterprises, which continually 
look to public investors for their increasing capital require- 
ments. 
Walter Bagehot, in a celebrated passage,’ declared that: 
A million in the hands of a single banker is a great power; he can 
at once loan it where he will, and borrowers can come to him, because 
they know or believe that he has it. But the same sum scattered in 
ros and sos through a whole nation has no power at all; no one knows 
where to find it or whom to ask for it. 
What is true of a bank is also true in a slightly different 
way of the Stock Exchange, which as our leading organized 
security market collects the funds of individual investors and 
speculators from all over the nation, and even at times from 
: Soo Chgiey 21. Street.”