Evening star., 1927-10-08

opening ito listA to foreign shares. No
step more significant Of the fact that
New York has become world market
could have been taken. The scenes
are shifted London, Paris. Berlin
have been the international money
markets In the past. But today the
great tide Of wealth has risen TO the
food In America. American capital is
seeking investfnent, and has found it
the world over. American dollars have
turned mill wheels, laid railroads and
reared buildings in foreign lands.
BY opening its lists to approved
shares OF internal companies in for
etgn countries. the New York Stock
Exchange, Americas great domestic
financial market. facilitates the fiow
of American capital to countries where
capital is needed. 1t is to be presumed
that American investors In foreign
shares will be as carefully advised and
az safely guarded as are investors in
the securities of domestic corporations.
The rules laid down by the New
York Stock Exchange for the listing
of foreign shares apparently have
been drawn with the utmost care. One
makes 1t a sine qua non that the
country in which the corporation seek
ing such listing exists must be on q
gold basis. For the time being this
gives the advantage to concerns OF
Great Britain. Germany, Belgium, and
the Netherlands over those of France.
Italy and Japan. In the future the
rules governing the listing Of shares
may be changed to admit the corpora
tions Of the latter group Of countries.
Or, more profitably to all concerned,
these countries may place themselves
on gold basis.
For some time foreign bonds have
been dealt In on the New York Stock
Exchange, and during the war permis'
sion was granted for the listing of
shares of four great foreign corpora.
tions, but with the provision that these
shares should be dealt in through the
medium of American certificates of de.
posit. This is the method which will
be followed under the new rule open
inG the New York Exchange TO
the listing Of shares of foreign con-
Germs. The original shares of these
concerns will not be bought and sold
On the floor of the American exchange.
Largs blocks of stock in approved cor.
porations will be purchased by Amer
lean institutions. banks in all prob
ability. and against these will be- is
sued certificates by the American in
stitutions holding the foreign securi.
ties. The trading will be in these GER
tifcates. Identical In value with the
foreign shares, but with the value
specified in dollars rather than in
pounds or guildsrs. When dividends
are paid they viii Be transmitted to
the American institutions. which in
turn will pay the American investor
in dollars.
On the Stock Exchange OF Lendon
practically all the standard American
railroad shares are listed and are dealt
in. Shares of great American indus
trials are bought and sold in the free
market" In London. Prices on the
London Exchange depend in great
part on the prices obtaining for these
shares in New York.
The action taken by the New York
Exchange makes more easy the
flow Of American gold to nations
which require capital, especially in the
upbuilding of their economic structure
necessary since the Great War. In
ternationaI bonds will be more closely
drawn. Under proper safeguards this
will benefit both the United States and
the other nations. In the early days
of the Republic. foreign capital made
possible the opening Of new country,
the tapping of natural resources, the
establishment of new industries. The
pendulum has swung.