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.




CHAPTER IV.


FINANCE AND TRADE

We have seen that finance becomes international when capital goes
abroad, by being lent by investors in one country to borrowers in
another, or by being invested in enterprises formed to carry on some
kind of business abroad. We have next to consider why capital goes
abroad and whether it is a good or a bad thing, for it to do so.