The work of the Stock Exchange

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Monograph

Identifikator:: 1831284952

URN:: urn:nbn:de:zbw-retromon-225876

Document type:: Monograph

Author:: Meeker, James Edward http://d-nb.info/gnd/126597340

Title:: The work of the Stock Exchange

Edition:: Revised edition

Place of publication:: New York

Publisher:: The Ronald Press Company

Year of publication:: [1930]

Scope:: XVI, 720 Seiten; Illustrationen, Diagramme

Digitisation:: 2022

Collection:: Economics Books

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Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Chapter IV. The distribution of securities

Collection:: Economics Books

THE DISTRIBUTION OF SECURITIES 8q which the underwriting house faces in marketing the securities it purchases often involves hard work over a considerable period of time. If the issue underwritten is small, the under- writing firm may handle it alone without the assistance of other investment houses. But with a larger issue the underwriter will usually organize a syndicate, composed of several firms which agree to share the risks, profits, and expenses of market- ing it with him.* The number of firms in such a syndicate depends upon the size of the issue to be sold, as well as the current economic condition of the market. The average syndi- cate consists of from three to five firms, all of which may or may not be located in New York. On the other hand, the record $500,000,000 Anglo-French 5% loan floated under the leadership of J. P. Morgan & Co. in 1915, was handled by a huge syndicate comprising almost all the wholesale security houses in the country. Allotment of Syndicate “Participations.”—After the syndicate has been organized, the original underwriting house, as its organizer and manager, proceeds to arrange the “syndi- cate allotments” or “participations”’—that is, the exact portion of the total security issue which each member of the syndicate agrees to purchase and attempt to resell. It is a significant fact that prior to 1914, while the United States was still on the whole a debtor nation, foreign financial houses participated largely in American syndicates. After the war, however, we became a creditor nation, and this former practice was reversed. At present the tendency is for this country to finance itself almost entirely and, in addition, to underwrite and distribute here the securities of foreign countries, occasionally with the assistance of foreign financial houses. With the larger security issues, members of the syndicate often sell extensively to smaller distributing subsyndicate houses, which do a retail rather than a wholesale business in securities. The syndicate member may thus dispose of his "See “Money Trust Investigation.” Vol. IIL, v. 1661.

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