The work of the Stock Exchange

Bibliographic data

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.

606 APPENDIX (VIIe) In the panic of 1929, constant rumors of “bear raids” prompted an investigation by the Exchange. Concerning this episode President Richard Whitney (in his address “The Work of the New York Stock Exchange in the Panic of 1929” in Boston, June 10, 1930) stated : “For a number of days prior to November 12th, there had been constant rumors of tremendous bear raids in the stock market. Such rumors, as a matter of fact, almost always accompany periods of security liquidation. The Stock Exchange authorities nevertheless wished to verify the accuracy of these rumors, and early in the morn- ing of November 13th called upon its members to report to our Busi- ness Conduct Committee as of the close of business on the 12th, their position in regard to borrowed and loaned stocks, and other particulars which would speedily indicate the existence of a large short position. These questionnaires to Stock Exchange houses were rapidly analyzed, and it was found that the aggregate amount of borrowed stock was so small as to be almost inconsequential, being, in fact, only about one-eighth of one per cent. of the value of all stocks listed on the Exchange. It is interesting in this connection to realize that Novem- ber 12th, as of which this study was made, marked practically the lowest point to which the daily stock price indices fell during this whole period. . . . In general the extraordinary absence of bids for the purchase of stock throughout the panic would indicate an absence of a sufficient short. interest to give the market its ordinary stability. If early in the fall a large short interest had accumulated, presumably stock prices would never have reached the great heights they did before the panic, and also added buying power during the panic would have been afforded by short covering.” (VIIf) Many practices in finance as well as commerce which are legitimate and economically useful in times of peace, may prove ille- gitimate and harmful in wartime. Unlike conditions a century ago, modern warfare demands not merely the mobilization of special fight- ing forces, but the exclusive organization of all industrial and financial effort as well. So it has been with the short sale. During a war, stock market declines may be interpreted as national fears of military defeat, and the short-seller may injure his country by actions in which, purely from an economic basis, he should ordinarily be encouraged. At the outbreak of the European war, the leading stock exchanges of London, Paris, Berlin, and New York all closed completely by July 31, 1914. Subsequently, New York reopened in December, 1914, London on January 4, 1915, Paris on September 27, 1915, and Berlin on December 3, 1917, for shares and September 1, 1919, for bonds.

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