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 VII. Credit transactions in securities

Collection:: Economics Books

180 THE WORK OF THE STOCK EXCHANGE order to obtain the enormous sums needed for the prosecution of the war, our Treasury Department urged Americans to pur- chase their bonds on credit by making an initial payment them- selves, and allowing the banks to furnish them credit for the balance of the price of the bonds. In this way subscribers were able to buy more bonds than they would otherwise have been able, and by gradually paying off with their savings the credit furnished by the banks, they were finally able to obtain com- plete ownership of their bonds. The Government also made a deferred delivery of most of the bonds which it sold. When the subscriber for cash de- posited his check at his bank, he was told that the bonds which he was buying were not yet ready to deliver—that they had not yet even been printed. Minus his money and at the same time without his bonds he walked out of the bank, perhaps in a puzzled state of mind. The delayed delivery of the bonds was, of course, necessitated by the enormous task of engraving and printing them. The Government consequently employed its credit in agreeing to deliver the bonds at some convenient ‘uture time in exchange for the subscriber’s cash and his banker’s money credit. When the subscriber received his bonds, he no doubt proceeded to forget—if indeed he had ever completely realized it—that the Government had sold its securi- ties to him on credit and for future delivery. Financial Terminology.—Now every profession has its own technical “lingo” which, however necessary, usually leads to considerable confusion in the public mind. Many simple incidents in business, when paraphrased by the lawyer, sud- denly become mighty and perilous affairs indeed. Common ailments, described with the lengthy Greek derivatives of the doctor, grow into mysterious and fearsome diseases. Much the same thing occurs when such ordinary business operations as selling or buying on credit are referred to by the banker or broker in their financial argot as “buying on margin” or “sell- ing short.” The needless mystery which these mere words

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