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

Usage license:: Get license information via the feedback formular.

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Document type:: Monograph

Structure type:: Chapter

Title:: Chapter XI. The security collateral loan market

Collection:: Economics Books

308 THE WORK OF THE STOCK EXCHANGE stock market under great pressure from the money market. In 1929 no credit shortage was actually present. Although call rates had risen high in the spring, they stood at about 6% only when the stock market decline began in the fall; at no time during the panic did call rates exceed 7%, and after it they became unusually low. This absence of money market pressure on the stock market partially accounts for the fact that in 1929 the stock market did not discount far in advance the trade depression, the fall in commodity prices, and the liquidation of commercial loans, as it had in 1919-20. In both periods, inflation occurred not only in the stock market but also in trade and industry. Concerning call loans in 1929, however, the really significant fact is that, had the funds em- ployed in stock market credits been employed in commercial loans instead, the commercial and industrial inflation would have been vastly worse than it actually was. For, as nature abhors a vacuum, just so banks abhor idle funds. Artificial restriction of brokers’ loans in the face of a national surplus of credit and capital could only have resulted in an even more dangerous and undesirable inflation of commercial loans. The principal moral seems to be, that an increased tendency toward stock market inflation is to some extent the price of being a creditor nation and having a genuine surplus of funds. Term Settlements.—The New York Stock Exchange has long been urged to adopt term settlements of the sort practised on European stock exchanges, in order to place stock market financing on a time loan rather than a call loan basis, and to increase the efficiency of its central clearance and settlement. The authorities of the Exchange have been less inclined to consider the term settlement any panacea.”* In 1926 the author made an extensive study of the question in London, Paris, and Berlin, and 1927 supplemented it by further researches in Amsterdam, Milan, Vienna, and other European centers. In his opinion, a term settlement could not prove in New York as See Address of President E. H. H. Simmons, “Speculation in Securities” befor

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