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.

Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Chapter XVII. The stock exchange and American business

Collection:: Economics Books

STOCK EXCHANGE AND AMERICAN BUSINESS 48g which he is engaged. We have seen that the savings bank is interested in securities as an investor. The investment banker, on the other hand, is chiefly an underwriter and dealer in se- curities.”® Without a central organized market through which to distribute the larger new issues and render the larger old issues always negotiable, his business would revert rapidly to conditions prevailing in the security market a century ago. The commercial bank also has a contact of its own with the Ex- change. For one thing, it usually holds listed bonds as a con- siderable part of its surplus. For another, it often makes both time and call loans on security collateral. The economic function of such loans as well as their ad- vantage to the commercial banker has been touched upon in previous chapters.’™ Nor is this mutually beneficial connection between commercial banking and the Stock Exchange confined simply to the large banks and financial institutions of Wall Street. The so-called “out-of-town banks”’—an elastic New York expression which covers anything from the great banks of Boston, Chicago, or Philadelphia to thousands of small banks in all parts of the nation—also are interested in and to a degree dependent upon the Stock Exchange, if not directly, then by proxy,'® since they are accustomed to loan part of their surplus funds on security collateral. There is consequently a close and necessary connection be- tween banks and stock exchanges, and the fact that in every financial center in the world the former cluster about the latter arises from this inevitable link, and their common interest from the inherent nature of their kindred business in credit instru- ments of one sort or another. Banking would be vastly more hazardous without a Stock Exchange, while the Exchange could not accomplish its vital work of rendering its listings always negotiable without the employment of credit extended by bankers. Finally, many of our banks owe to the Stock Exchange a 16 See Chapter IV, p. 87. 17 See Chapter IV, p. 107, and Chapter XI, p. 301 18 See Chapter XI, p. 283.

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