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 II. Organized security markets and their economic functions

Collection:: Economics Books

ORGANIZED SECURITY MARKETS 51 better exercise their judgment as to the best time to buy or sell. They are put on warning as to the feeling of the market in respect to security values. Without dependable and current quotations, dealing in securities could never be a really rational business. Stock exchange quotations also serve to call the attention of the public to particular companies and their pros- pects, and by a sort of advertising to interest the public in future ownership of them. Since 1925, the swift increase in listings and volume of dealings in shares on the Stock Exchange rendered obsolete the old stock ticker machine, and considerable delay was con- sequently occasioned before the new ticker machines could be perfected and installed. Unfortunately, it was during this interval that the panic of 1929 occurred, when late quotations on the stock tape proved so considerable a source of public confusion. Yet this episode only emphasizes the great service performed under more normal conditions by the Stock Ex- change in providing the public with current quotations. 5. Superior Collateral Value.—Since stock exchanges confer superior marketability upon their listed securities, and provide current and dependable price quotations for them, it follows that these securities are preferred by money-lenders as security collateral for loans. The lender knows that such securities can readily be sold in case the loan which they secure is not paid, and from their quotations he can assure himself that their marketable value is sufficient for this purpose. This is the reason why securities not listed on a stock exchange are less acceptable as collateral to lenders, even though they may be inherently as sound, or even sounder, than listed securities. Lenders can protect themselves easily against securities of doubtful value, or those selling at high prices, by increasing margin requirements on their security loans and assigning lower prices for the collateral securities as a basis for lending. Thus, the principal danger with such loans which lenders must watch, is the marketability of the collateral. . This accounts for

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