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 XVIII. The stock exchange as an international market

Collection:: Economics Books

528 THE WORK OF THE STOCK EXCHANGE of thought and our specific financial practices have failed to keep pace with our actual economic status. Yet, both from our own experience and from-that of the older creditor nations of Europe, it is possible to generalize as to the benefits which foreign security investing can be expected to confer upon the United States, and also as to some of the problems and dan- gers which may thereby arise. The relationship between foreign security investments and righting foreign trade balances has already been discussed, and may here be only summarized. Foreign security investing renders all foreign trade more flexible because it furnishes an additional and flexible method of payment. It thus lightens the pressure upon gold stocks and gold shipments, as well as upon the shifting internationally of bank credit and short- loans; in consequence, it may be said to stabilize foreign ex- change rates and both domestic and foreign interest rates, to minimize any tendency for commodity inflation, and to assist the work of the great central banks in stabilizing foreign and domestic business. Foreign security investing in general tends to increase both exports and imports. Then export of capital often directly creates foreign demand for the export of domes- tic goods, and indirectly raises foreign productive power and income so as to permit a greater export of goods from the lending to the borrowing nation.?® Conversely, the lending nation can afford to spend interest and dividends accruing on its foreign investments to pay for imports of foreign goods. In the second place, a nation benefits from making and holding foreign security investments in much the same way that an individual does from owning any securities. In each case a surplus of negotiable wealth is stored up and kept at hand to meet all possible exigencies. The nation which holds sound foreign securities listed on its own or foreign stock ex- changes can usually obtain instant funds abroad with which 27 An admirably impartial summary, from the pre-war British viewpoint, of the rdvantages and disadvantages of foreign investment, may be found in the introduction (pp. xviii-xxv) to C. K. Hobson's classic study, “The Export of Capital ” 28 Cee Stabilization Hearings, pp. 300 and 365

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