STOCK EXCHANGE AN INTERNATIONAL MARKET soy
ber here actually received less than the required minimum
commission. By a resolution of the Governing Committee in
1911, such joint accounts were forbidden.
The coming of war conditions effectually changed the
whole basis of the business. Severe laws were enacted abroad
forbidding the import of securities there because of the con-
sequent export of capital which it caused. Term trading was
likewise suspended for several years on the British and con-
tinental stock exchanges.” The cables were heavily burdened
and under rigid censorship. Also, during the war period the
great bulk of American securities held abroad was sold back
to Americans through the New York market. Thus, not until
two years after the Armistice were conditions suitable to
justify an attempt to revive the pre-war methods of normal
and efficient arbitrage between New York and foreign centers.
In 1920 the Governing Committee rescinded the resolution of
1911, but placed certain restrictions upon joint account ar-
bitrage designed to rid it of its objectionable features.®* By
the terms of these restrictions, the old system of the “arbitrage
rail” was not reestablished, and thereafter arbitrage transac-
tions, if conducted by New York Stock Exchange members,
have been centered in their offices rather than in the Board
room. Former arbitrage in American securities has only par-
tially revived because of the comparative lack of these issues
now abroad, and consequently the lack of extensive markets
for them there. On the other hand, as foreign securities are
listed on the New York Stock Exchange, arbitrage in them—
a relatively new species of Wall Street business—has developed.
Benefit of a Broader Market.—The fact that American
securities were listed and traded in abroad as well as in New
York made a broader market for them, and tended to make
them easier to buy and sell, and at fairer prices.” We have
seen that similar results were obtained for the Stock Exchange
7 See Chapter XI, p. 308.
8 Constitution, Chapter X
3 See Chapter II, p. 45
