Bankpolitik

The work of the Stock Exchange

Bibliographic data

Monograph

Identifikator:: 1006296646

URN:: urn:nbn:de:zbw-retromon-19592

Document type:: Monograph

Author:: Somary, Felix http://d-nb.info/gnd/119189518

Title:: Bankpolitik

Place of publication:: Tübingen

Publisher:: Verlag von J.C.B. Mohr (Paul Siebeck)

Year of publication:: 1915

Scope:: 1 Online-Ressource (XI, 289 Seiten)

Digitisation:: 2017

Collection:: Economics Books

Usage license:: Get license information via the feedback formular.

Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: II. Der Geldmarkt

Collection:: Economics Books

THE DISTRIBUTION OF SECURITIES 115 securities out of the speculative floating supply, and this is the real foundation of the whole process. Hence, it is quite correct to attribute mainly to the Stock Exchange the present continu- ous flow of large capital into industry,* even if manufacturers and investors are often unconscious of the fact and although a detailed explanation of the process such as the above is maddeningly reminiscent of “the house that Jack built.” The Stock Exchange as a Capital Market.—This function performed by the Stock Exchange in distributing capital to industry has been described by Charles A. Conant, the eminent banker and economist,*® with the following suggestive simile: The stock market acts as a reservoir and distributor of capital with something of the same efficiency with which a series of well-regulated locks and dams operates to equalize the irregular current of a river. The hand of man is being stretched out in the valley of the Nile to build great storage basins and locks, and the waters which flow down the great river may be husbanded until they are needed, when they are released in small but sufficient quantities to fertilize the country and tide over the periods of drought. Something of the same service is performed for accumulations of capital by the delicate series of reser- voirs, sluice gates, and locks provided by the mechanism of the stock market. The rate of interest measures the rise and fall of the supply of capital, as the locks determine the ebb and flow of the life-giving water. The existence of negotiable securities is in the nature of a great reservoir, obviating the disastrous effects of demands which might drain away the supply of actual coin, and prevent the panic and disaster which, without such a safeguard, would frequently occur in the market for capital. Pre-War Importation of Investment Funds.—Before the war it was generally recognized that the growth of security investing in the United States had not kept pace with the tre- mendously swift and enormous growth of corporate industrial enterprises here. In consequence, although even then we prob- ably possessed more wealth and certainly were accumulating wealth more swiftly than any other nation in the world, we 2 See Chapter II, p. 52. ® The Uses of Speculation, Forum, August, 1901.

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