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 V. The dangers and benefits of stock speculation

Collection:: Economics Books

STOCK SPECULATION—DANGERS AND BENEFITS 13g their commitments, and thus led them to require higher margins from customers. The plenitude of business also tended to favor higher margin requirements, since it reduced the element of intense competition between brokerage firms which formerly led to keeping margin requirements at a minimum. The aver- age margin requirements of Stock Exchange firms have been very much higher recently than ever before, and unquestionably this has materially strengthened the whole brokerage business. The relatively high margins required by brokers before the panic of 1929, while they can scarcely be said to have effectually prevented intense public speculation, did operate to prevent the panic from becoming even worse than it was. Moreover, one of the most salutary steps taken by banks and Exchange houses during the crisis, was the lowering of margin requirements on security loans and customers’ accounts respectively. If there had been some law requiring an inflexible minimum margin, it might not have been possible to take such a step. Respecting margins, no formula can ever take the place of wise admin- Istration. 2° Inevitable Risks of Business Enterprise.—Speculation is fundamental to our present economic order of society and busi- ness, because it arises from the inevitable risks and the inherent vicissitudes of all industry and trade. Of course that extremely knowing class of people who write letters to the editors and orate from the soapbox on every possible occasion, often deny that there are any particular risks in industry. They delight to picture our larger industrial companies as fat jovial men labeled “Sugar Trust,” “Oil Trust,” “Beef Trust,” etc., who have not a care in the world except their riotous pastime of squeezing and robbing a small, frightened, bristly-haired, unprotected figure labeled “The People.” But the business man who has a responsible part in some enterprise with the avowed and shameless purpose of “making money’’—and it matters little whether the enterprise is a village % See Appendix Ve.

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