The terms on which they will be bought or sold will depend on the variations in the demand for, and supply of, them. If a number of holders want to sell, either because they want cash for other purposes, or because they are nervous about the political outlook, or because they think that money is going to be scarce and so there will be better opportunities for investment later on, then the price will droop. But if the political sky is serene and people are saving money fast and investing it in Stock Exchange securities, then the price will go up and those who want to buy it will pay more. The price of all securities, as of everything else, depends on the extent to which people who have not got them demand them, in relation to the extent to which those who have got them are ready to part with them. Price is ultimately a question of what people think about things, and this is why the fluctuations in the price of Stock Exchange securities are so incalculable and often so irrational. If a sufficient number of misguided people with money in their pockets think that a bad security is worth buying they will put the price of it up in the face of the logic of facts and all the arguments of reason. These wild fluctuations, of course, take place chiefly in the more speculative securities. Shares in a gold mine can go to any price that the credulity of buyers dictates, since there is no limit to the amount of gold that people can imagine to be under the ground in its territory.

All the Stock Exchanges of the world are in communication with one another by telegraph, or telephone, and so their feelings about prices react on one another's nerves and imaginations, and the Stock Exchange price list may be said to be the language of international finance, as the bill of exchange is its currency.

International Finance Page 19

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