36

Supply  and  Demand.*  Similarly,  any  stock  can
be  solidified  by  anyone  who  is  sufficiently  strong
financially  to  absorb  the  whole  floating  supply.
There  are  also  some  stocks  which  are
permanently  solidified  in  this  way  and  which
never  respond  to  trade  influence.  Such
are  stocks  of  local  trading  companies  and
local  gas  and  water  companies,  paying
steady  dividends,  whose  shares  are  in  a  few
private  hands  and  seldom  if  ever  change
hands  outside  the  borders  of  their  own
immediate  locality.
Under  these  conditions  a  stock  naturally
ceases  to  be  liquid,  and  remains  unaffected  by
the  state  of  the  national  trade.
In  selecting  stocks  for  investment  it  is
essential  to  remember  that  it  is  the
geographical  position  of  the  country  which
controls  the  investment  demand  for  the  stock
that  has  to  be  considered,  and  not  only  the
geographical  position  of  the  security  itself.
For  instance,  the  table  which  we  have  given
in  Chapter  I.  of  this  book  includes  the
Southern  Mahratta  Railway  amongst  British
Trustee  stocks.  The  Southern  Mahratta
*  The  late  Mr.  Yerkes  was  the  chief  moving  spirit  of  this
syndicate.  He  died  in  1906.  and  soon  after,  the  influence  of  the
syndicate  being  removed,  Metropolitan  District  Ordinary  fell  from
37^  to  16,  to  which  price  they  would  have  fallen  long  before  had
the  above-named  influence  not  existed.