Complex Commercial Cities as Centers of most highly developed commercial cities, especially London and New York, carry the entrepa trade one ste• 'arther by making the transactions without handling the actual !, ods. Thus a shipment of cotton direct from New Orleans to Yoko' ama may be the result of a business trans action by a Wall Street •roker. Such exchange cities grow because a commercial center t, ds to become a financial center. It gathers a surplus for invest • nt not only from its own business, but from the fact that its bank ! - er a d stronger than those of outlying regions and so draw funds from .uch financial service is of great value. (1) I builds up trade i • places where confidence is not well established. New York can .. t as a pioneer in a great many enterprises where cities h sin re- I urces would be unwise to ven ture. (2) It regulates p es usti I g the supply and demand over large areas. It is a gre b• • to,„1•Kisiness that the prices established in the Chicago Corn I. 41 - ge . mild largely control the variations in the price of corn it ' • of t c United States. The Exchange, ,which is merely an organizatio of larger dealers in corn, looks over the Iyhole situation as to the s pply of corn on hand, the prospects of a gdod crop, the supply in one r, gion or country compared with another, the present rate of consumptio , nd the factors which control con sumption, including tariffs, war, 'ne, the size of other crops, and the number of pigs and cattle that must be fed. If each producer had to make his own bargain without knowledge of the conditions which govern his product in other places, the resulting confusion would resemble that which would prevail if each passenger on a railroad train had to make a separate bargain with the conductor as to how much fare he should pay. The prices of all sorts of commodities must vary from month to month and even from day to day, but it is vastly easier to have these variations depend on a single organization whose acts are made known everywhere than to have them depend on hun dreds of thousands of individual bargains.
(3) A third advantage of having the great commercial cities serve as financial centers is that it increases the circle of customers available ) to the local producer. If each producer, especially each producer of 'raw materials and food, were to rely on his own efforts, his sales would have to be limited to the small group of buyers immediately surround ing him. Through the great, exchanges in the big cities, however, the local producer is brought into contact with buyers all over the world.
The business of looking after the world's exchange of products is great that New York alone has the following exchanges: Coffee and Sugar Exchange Iron and Steel Board of Trade' Consolidated Stock Exchange Jewelers' Board of Trade Cotton Exchange Maritime Exchange Cotton and Grain (American) Mercantile Exchange Exchange Metal Exchange Crockery Board of Trade Produce Exchange Fire Insurance Exchange Real Estate Exchange Fruit Exchange Stock Exchange Dried Fruit Exchange The most important of these is the Stock Exchange. The bonds sold there in 1920 had a par value of about S3,955,036,900, while the shares of stock numbered 223,931,350 that year and 312,875,250 the year before. These two kinds of securities represented over seven
hundred and twenty different types. They included simple indus tries like the making of linseed oil and ice, raining industries of many sorts, complex industries like the making of electrical apparatus and pneumatic tools, and also railways, steamship lines, public utilities, and commercial enterprises such as chains of stores. To many people the stock exchange means merely a place where fortunes are made and lost, but really it has a far greater function. Not only does it enable people to know what possibilities of investment are open and how they are generally judged as to soundness, but it enables people to invest in new enterprises. Not that the new enterprises are listed on the stock exchange, but if a person has investments in marketable securities the stock exchange makes it possible for him to sell them at once, while if he were limited to the few buyers with whom he and his agents are personally in contact, it might take years to dispose of them. Thus the person who wants to invest in well-known securities can do so, while the one who wishes to give up the known securities and put his money into new ventures also finds the stock exchange convenient.
In addition to the exchanges a great commercial center has many' other complicated means of carrying on the world's business. In New York these include a clearing house where checks, notes, and other forms of commercial paper pour in at the rate of seven or eight hundred million dollars' worth per day, or over two hundred billion in a year. They are sorted out and credited to the various member banks so that each one's indebtedness to all other members is balanced against the sums due it from all other banks, and the whole score is wiped off with almost no exchange of actual cash. Other factors in promoting exchange[ in New York are forty-nine foreign consuls and their staffs, thirteen railroad terminals into which pours the traffic from 21,000 miles of railroad, 91 steamer lines (1914) including 15 domestic lines to Long Island Sound and New England, 12 to the Atlantic and Gulf coast south of New York, and four to the Pacific coast of the United States.
The Attraction of Commercial these facilities, together with the telephone, telegraph, and cable lines which go with them, and the canal boats, trolley lines, and automobiles which aid in transpor tation, combine with the commercial and manufacturing enterprises in demanding a vast number of highly competent workers. Hence, a com mercial center attracts many of the brighter, stronger young people. For that reason it tends to become a center of education, art, literature, and philanthropy. If, as often happens, it is also a seat of government, it possesses practically all the important means of obtaining and keeping the best brains of a country. Such conditions, quite as much as mere size and wealth, are the reasons why London, New York, Chicago, Paris, Berlin, and Tokio have an overwhelming influence in shaping the world's ideas and destiny. In the United States almost every city of over 200,000 people is an important commercial as well as manu facturing center, and in most cases commerce does as much or more than manufacturing to give the city its tone.