[52 THE WORK OF THE STOCK EXCHANGE 
Reciprocally, the Exchange is of vast significance to thrift 
and investment, not only in rendering the investor's securities 
always negotiable, but also because a speculative “floating sup- 
ply” is maintained through its efforts, in which securities can 
rest until they are sufficiently seasoned to warrant their pur- 
chase by investors.** Furthermore, the distinctive ability of an 
organized market to frustrate attempts at manipulation or 
monopoly is due to the free play of national speculative forces 
init. The fact that an exchange can establish the fairest prices 
is likewise due to the fact that any disparity between price and 
value makes speculative profits possible. It is therefore ap- 
parent that a stock exchange in which speculation was either 
forbidden or else restricted in any artificial and unnatural way 
hy taxation or legislation, could not perform those vital eco- 
nomic functions without which corporate enterprise of any 
magnitude in this country would soon be dangerously impaired. 
Relation of Speculation to Organized Markets.—That 
they serve as speculative markets for securities is perhaps the 
srincipal virtue and chief economic justification of the stock 
-xchanges. It should be noted, however, that the latter are 
comparatively recent additions to the mechanism of credit and 
susiness, while speculation is an ancient force in the world’s 
business and inseparably bound up with the processes of trade. 
Speculation existed centuries before the organized markets in 
which much of it is today conducted.®* It is therefore obvious 
that speculation created the exchanges, not the exchanges specu- 
ation. The Stock Exchange, as in the case of other organized 
and speculative markets, resulted from a natural economic 
evolution, and serves to segregate speculation, to minimize its 
dangers, and to intensify its practical and abstract benefits. It 
is as illogical to blame the sometimes costly shifts of speculative 
forces upon the Exchange as it would be to accuse the life 
insurance company of murdering a policyholder. 
© @ See Chapter IV, p, 107.