Volkswirtschaftliches Lesebuch für Kaufleute

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Monograph

Identifikator:: 879457236

URN:: urn:nbn:de:zbw-retromon-16989

Document type:: Monograph

Title:: Volkswirtschaftliches Lesebuch für Kaufleute

Place of publication:: Frankfurt a. O.

Publisher:: Verlag der Waldow'schen Buch- und Kunsthandlung (R. Wengler)

Year of publication:: 1905

Scope:: 1 Online-Ressource (XV, 514 Seiten)

Digitisation:: 2017

Collection:: Economics Books

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Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Zweiter Teil. — Handel

Collection:: Economics Books

ORGANIZED SECURITY MARKETS 55 the stock market regularly acts as a ‘“shock-absorber” to all business. In many cases, liquidation on the Stock Exchange has released sufficient capital to prevent the shock of a scarcity in working capital being felt practically at all in agriculture, commerce or industry. But even when serious contractions in credit do affect all enterprise, the shock is lessened because the stock market acts as a buffer. A typical case of this sort occurred in 1919—21.** In this connection, Governor Benjamin Strong of the New York Reserve Bank stated: . . the liquidation in the New York stock market started a year earlier than the liquidation throughout the country; and the effect of it was actually to release credit for purposes such as agricultural and industrial and commercial uses. On the other hand, the artificial injection of excess capital into land or commodities, with the attendant rise of prices and speculation with serious social consequences, has frequently been prevented or minimized by the ability of the securities market on the Exchange to absorb capital. For this reason, proposals to artificially “stabilize” the stock market would amount to tying down the escape valve of a steam engine.** The claim is sometimes made that funds are attracted into the stock market and thereby denied to commerce, agriculture, and industry. In Chapter XI this question will be discussed in more detail; it is enough here to state that this claim is usually made on very doubtful and imperfect evidence, and at the most involves only short periods of time. 9. Segregation of the Risks of Capital.—Owing to the ‘increased safety, stability, and publicity as to security prices created on the Stock Exchange, there has evolved within it and around it specialized dealers in speculative securities, of whom some are members of the Exchange and some are not. These so-called “professionals,” being almost always ready to buy or sell, thus collectively provide a ready means whereby the invest- ing public can shift risks to these regular dealers at will. This 1 See Chapter XI, p. 303.

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