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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Document type:: Monograph

Structure type:: Chapter

Title:: Chapter IV. The distribution of securities

Collection:: Economics Books

104 THE WORK OF THE STOCK EXCHANGE eration with the Federal Reserve authorities and many patriotic security dealers in Wall Street, formed a syndicate to supervise the initial marketing of Liberty bonds. Whatever the theorist may allege—and there are theoretical objections to such opera- tions unless they are skilfully and judiciously conducted—the Liberty bond syndicate was absolutely necessary to the suc- cessful distribution of the first and the later issues. The “Seasoning” of a New Security.—The length of time during which underwriting syndicates maintain scale orders in the market to buy and sell a newly listed security varies con- siderably. It depends in the main upon the attractiveness of the issue and the general condition of the securities market at the time. But as soon as an active market has been created for it and there is promise that its prices will not be violently deflected by technical conditions in the market incident to its recent appearance there, the syndicate will gladly withdraw its buying and selling orders, and leave the new security to go its own gait unsupported and unassisted. In this way, the process of “seasoning” the new issue begins. Pitiless publicity has already been turned upon the security. Investors and speculators from coast to coast study its merits and defects. Analytical articles are written .upon it in the financial and the general press. Its sales on the Exchange are instantly flashed to the four corners of the United States. In consequence, the new security at once encounters what has well been called “the bloodless justice of the market place.” Its prices will depend upon what the vast investing and speculating public of the whole nation thinks about it, and will fluctuate accordingly as these hundreds of thousands of people think better or think less of it. Sometimes the result is gratifying to the underwriters and the original investors alike, and its price either holds firm or else advances. Sometimes, too, affairs do not turn out so pleasantly. If any inherent weakness develops in the security itself, or the government or corporation behind it, no senti-

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