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.

F on am STOCK EXCHANGE AN INTERNATIONAL MARKET 515 paid for, foreign exchange rates afford an interesting and often reliable index to the condition of a nation’s foreign trade bal- ances. When America sells more goods and services to the rest of the world than she buys from it, normally dollar ex- change will tend to rise in foreign currencies, and foreign ex- change rates decline in New York. Conversely, when we are selling to the world less than we are buying from it, dollar exchange will ordinarily tend to decline abroad and foreign exchange rates rise in New York. Yet the shifting of short-term bank credit will often mini- mize or prevent such operations in the normal course of events. If, for example, British sterling exchange begins to decline in New York, speculators in foreign exchange may be tempted to use their dollars to purchase sterling short-term banking instruments in the hope of reselling them later when a higher sterling exchange rate prevails. Also, interest rates will often rise in a country whose currency is declining in the foreign exchange market, and this may persuade foreign capitalists and financial institutions to transfer their funds from the lower to the higher interest country. This is one reason why central banks tend to raise their discount rates when their home currency is declining in the foreign exchange markets, and lower them when it is rising. Thus, owing to the supplies of liquid speculative capital in the leading financial centers, to changes in comparative interest rates in different nations, and sometimes to the conscious manipulative operations of the leading central banks of issue, considerable and frequent disparities in a nation’s trade bal- ance with the rest of the world can be offset by the shifting of bank credit, without resort to gold shipments. The international shifting of bank credit to right a nation’s unbalanced trade relations with other countries is therefore not only swift and efficient but indispensable in the modern world. Nor are its possibilities yet fully developed. The international reparations bank established by the Young plan will presum- ably fill a useful function in just this respect. Closer coopera- { : {F 8 “g ] # hs oO eS. nN Q © <L Lu 2 ’ v 0 Cc m + © Q I~ << 0 0 - 0 ON 0 0 Oo on o > k 20 9 3) «lL ~8 Af 2 crear Is m a — -— © - ~ — © -— j=} oN 0 L= ¢ 0 fas] 3 oN m 3 6 oq: m ¢ Td aD £

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