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 XVIII. The stock exchange as an international market

Collection:: Economics Books

STOCK EXCHANGE AN INTERNATIONAL MARKET 517 this market regularly plays in our international traffic in securities. Automatic Character of International Adjustment.— Between gold standard countries, the adjustment of trade bal- ances through the shifting of bank credit and securities, and to a lesser extent of gold, is practically automatic because of the effect of exchange rates and interest rates. If, for example, French franc exchange should decline in terms of dollars, bankers’ bills or securities valued in terms of francs would become cheap to American purchasers, and induce additional purchases of both from New York. Similarly, when the New York money rates rise above those in France, there is at once an inducement to Frenchmen to invest in short dollar credits and in American securities if their price has declined under the influence of advancing domestic short-money rates. For the same reason, debtor countries which chronically need credit and capital will normally have higher interest rates and security yields than creditor nations which have surplus credit and capital. This situation is apt to induce a flow of capital and credit from the low interest creditor countries into the bills and securities of the high interest debtor countries which may continue for long periods of time. The Pre-War American Trade Balance.—Every nation, according to its age, temperament, situation, and resources, differs from every other nation in the respective proportions to which the many items in its visible and invisible trade enter into its total exports and total imports. For purposes of illus- tration, the foreign trade of this country as it existed prior to 1914 may be contrasted with that of Great Britain. We regularly exported more raw materials and manufactured goods than we imported. But our excess visible exports were balanced by our excess invisible imports. Despite our large foreign trade, the American flag was hardly ever seen prior to 1914 on the seven seas, and we were consequently forced to pay huge annual sums to British and other foreign shipping

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