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 XVIII. The stock exchange as an international market

Collection:: Economics Books

STOCK EXCHANGE AN INTERNATIONAL MARKET 503 developing a continuous character and a highly perfected tech- nique. The need for it existed long before the ability to ac- complish it efficiently. During the nineteenth century the United States was continually a debtor nation, and to build up rapidly our railway, mining, and industrial corporations it was therefore necessary to borrow capital heavily in Europe. For many decades, in fact, American economic development was largely limited by the degree of enthusiasm exhibited for these enterprises by European security investors. As a result, very few foreign securities were listed or dealt in upon the New York Stock Exchange, while very large dealings in our secur- ities became in time a regular occurrence on the stock exchanges of London, Amsterdam, and other European centers. The American issues, which thus came to possess regular stock exchange markets in Europe as well as in New York, were often called “international securities.” London particularly, as the unquestioned financial center of the world, actively in- vested and traded even from the early decades of the nine- teenth century in “Yankee rails” and other American com- pany and even government securities, whose turnover there constituted a large proportion of the total dealings on the great London Stock Exchange. In the beginning, prices for the same American security in New York and London varied considerably and were estab- lished principally by local conditions, since the old packet ships took weeks to cross the Atlantic. In consequence, trans-Atlantic arbitrage at first was slow, risky, and of minor importance. At mid-century, the new invention of steam navigation, by improving trans-Atlantic communication, tended to expand ar- bitrage between New York and London and magnify its im- portance in the stock exchanges of both centers. But after 1836, the opening of the trans-Atlantic cables reduced com- munication across the Atlantic from a matter of days to one of seconds, and with this vastly more efficient facility, arbitrage in American securities between London and New York greatly

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