The Triumph of the Market: 1900–14
Between 1900 and the outbreak of the First World War the global securities market went from strength to strength. By 1914 securities markets played a key role in the financial systems of most advanced economies and had established a niche position within less developed countries. Though far from being the universal means through which government and business raised funds or people employed their savings, securities had achieved a high level of penetration among the most sophisticated borrowers and investors. Internationally, securities markets were instrumental in the worldwide movement of funds that provided the finance for major infrastructure projects and the development of the earth's minerals and oil. The operation of both money and capital markets, and the smooth functioning of banking systems, had become heavily dependent on the liquidity that securities markets provided. It was only through the constant buying and selling on securities markets around the world that an overall balance was achieved in the innumerable transactions taking place within an increasingly complex world economy. Finally, in the shape of stock exchanges these securities markets had established a presence for themselves in all the major financial centres of the world and most of the minor ones. Through these stock exchanges the global securities market possessed the stability, organization, and order that made the trading of stocks and bonds a fast, cheap, easy, reliable, and routine experience the world over. There was an immediacy and a certainty attached to the buying and selling of securities that other assets did not possess, and this gave them a power akin to money itself.
Nevertheless, what securities markets had achieved by the early twentieth century was not recognized by most people, including those in government. The reasons behind the constant buying and selling of stocks and bonds were little understood, and regarded as nothing more than speculation to be curbed and controlled. As Van Antwerp, of the New York Stock Exchange, noted in 1913