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 g11 before the war, the United States regularly showed greater exports than imports in its trade returns, and many people, who gave the matter only a careless consideration, were wont to think that this country profited by the amount of our excess exports. Such a fallacious view, of course, left out of all reckoning our invisible trade, wherein we were steadily im- porting more services from other nations than we exported. Strictly speaking, then, there is normally no such thing as a permanent “favorable balance” in a nation’s total foreign trade with the world. There may be a relatively permanent favor- able balance in the visible or in the invisible trade, but total exports must in the long run balance total imports. How International Payments Come to Balance.—At this point it may well be asked how it happens that every nation’s total exports and total imports come to balance in this way. Trade is, after all, mainly free, and individuals in every coun- try can usually buy and sell such goods or services from or to foreigners as they please. When the Chicago merchant buys French tapestries, or when the Detroit manufacturer sells an automobile to an Argentine or a Brazilian, neither has the slightest thought or anxiety as to the effect of his trans- actions upon our national trade balance. Indeed, relatively few people here or abroad even understand what national trade balances really are. Furthermore, most items in a nation’s international trade are governed as to their amounts not only by free choice but also often by inevitable and quite inflexible circumstances. What, then, brings about this continual bal- ance between each nation’s total exports and total imports? The answer, of course, is—the flexible financial items in the total trade list, consisting of gold, bank credit, and securities. Fundamentally, in every gold standard nation, the basic method of balancing its international trading account with the world consists in shipping or receiving gold. Such shift- ing of actual gold bullion can be effected fairly quickly, and no gold standard creditor can, of course, ordinarily refuse to

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