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 153 Adjusting Prices to Values.—We have seen that the occa- sion for a successful speculation comes only when a disparity exists between the price and the value of some commodity or enterprise. The principle is exactly the same, although, of course, on a smaller scale, with a speculation in the stock mar- ket, or with the founding of a new industry, wherein a large potential value seems creatable for a small price. It is this fundamental fact with regard to speculation which led Justice Holmes of the United States Supreme Court to remark, “Speculation is the self-adjustment of society to the probable.” The speculator, therefore, as M. Bloch, the French economist, has declared, renders an economic service every time his specu- lation succeeds. For this service, when he succeeds in render- ing it, the speculator of course obtains a profit, and this profit, considering the profound economic benefits of speculation, is as well deserved as any other. One logical deduction from the premises stated above is that unsuccessful speculation is economically harmful, and this ls in many practical ways true. But such speculation is always kept from becoming an excessive economic harm for the simple reason that the speculators suffer losses and are penalized for running counter to the trend of true values American Fondness for New Legislation.—It is impos- sible to legislate speculation either out of existence or into abso- lute harmlessness to the individual speculator.® Probably more than any people on earth, Americans have contracted the habit of rushing headlong into statute-making. That so many ill- considered and superficial attempts to inaugurate the millen- nium with a new law are actually enacted, is emphatically more our own fault than that of our elected representatives, whom, nevertheless, we invariably blame for the whole affair later when the law is found impossible or else dangerous in its enforcement. However we may rail at Washington or the state capitals, most of the uneconomic and useless statutes 3 See Appendix Vd.

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