OR-OR ORDER. 213 from the first, he simply does nothing and his option expires, and his loss is limited to the £10 he paid for his privilege. Options may be dealt in, and often are, in other markets as well as the Stock Exchange, but they are more common in the latter than elsewhere. When money is paid for the option of buying at a given price, the operation is called " giving for the call." When it is paid for the option of selling, it is called "giving for the put." Sometimes both operations are combined, and then it is called giving for the put and call." 66 وو 66 At other times, options are combined with regular purchases and sales. Mercer may, for instance, buy £5,0 0 Turkish at twelve, with the option of calling for an equal amount before settling day in addition. This is buying £5,000 "with the call of more," or he may sell £5,000 at the same price" with the put of more more meaning in each instance an amount equal to that bought or sold. Or or Ore. The part of the krone of the Scandinavian Monetary Convention (Norway, Sweden, and Denmark), value about half a farthing English. Silver pieces of 50, 25, and 10 ore are struck, the two former 600 fine, and the last 400 fine. 66 66 Order, to. The phrase "to order" is a curtailed expression covering any of the following-viz., In obedience to the order," "In obedience to his order," "In obedience to her order," In obedience to their order," " According to order." To novices the phrase is mostly unintelligible, and it is probable that many, who are not novices, use it many times in a day without any clear idea of its origin. The manner in which the order is given too, is a little curious, and is another of the many abbreviated forms which pass current in the commercial world. Take for example, a banker's cheque payable "to order." On the face of it we see 'Pay to Messrs. Bullion, Bros. & Co. or order" the sum of, &c., &c. And how is the order given by Messrs. Bullion, Bros. and Co. ? Why by simply writing their name on the back of the cheque. The form, however, is so well understood, that it suffices for all practical purposes, and the abbreviation prevents much useless repetition and waste of time. By the insertion of the words "to order," a bill or cheque is rendered negotiable according to English law. Without this addition (or the words "to bearer "the transferee could not sue the debtor in his own name. Or Order. The origin of the phrase "or order is found in the practice of merchants of old time, who were not allowed to pay a debt to any one but the payee himself; or, as was afterwards provided, "to his certeyne atturnai," or to "his assignes," or to "his certain order" (that is, to the clearly ascertained order of the payee.) These phrases gradually gave way to the short and now familiar term "or order." It means, therefore, that if a debtor does not pay a stated sun to the payee himself, it is to be paid to some one whom he has ordered to receive it, and to whom the debtor is wdered to pay it. That order, in modern commerce, is given by the 214 ORIGIN OVER CONSTRUCTION. payee, sometimes by simply writing his name at the back of the instrument, at others by adding the name of the transferee, with other details, thus giving rise to the various forms of endorsement. (See Endorsement.) Origin, Source, or Cause of Value. "There are a great variety of things of different natures which have value. We must search for some single cause which is common to them all; which being present, value is present; which, when it increases, value increases; which, when it decreases, value decreases, and which, being absent, value is absent. The sole cause of value is human desire. When there is a demand for things, they have value: when the demand increases (the supply being supposed the same), the value increases; when the demand decreases, the value decreases, and when the demand altogether ceases, the value is altogether gone."-H. D. MCLEOD. It is to be observed that this definition applies simply to the term "Origin (source or cause) of value." Human desire is not the sole determinant of value. Two things may be equally desired, but if one requires double the labour to produce it that the other does, it will be more valuable than the other. Again if two things be equally desired, and one exists in abundance, while the other is to be obtained only in very limited quantities, this latter will be the more valuable of the two. (See Value, Measure of Value, Unit of Value.) Original Bills. Bills which have been drawn and sold before any endorsements have been added. It is only when original bills have been drawn and accepted by first-class houses, that a good price can be obtained for them. If the drawer and acceptor of an original bill be comparatively unknown, the buyer of such bill will not pay for it until time has been allowed for inquiries, and to compensate for this trouble, he offers an inferior price for it. When a bill has one or more endorsements, and a well-known name of high repute is amongst them, the obscurity of the original drawer and acceptor is of minor importance. Hence the value attached to bills with numerous endorsements, since every endorser is placed in the position of a guarantor of the soundness of the bill to which his name is attached. Over Construction. A term recommended by Bonamy Price, to prevent the confusion of certain economic phenomena with overproduction. He says, "In true over-production the fault lies in the supply; eager producers have carried their operations too far. In over-construction, the fault rests with the demand which sinks below its previous level. These are phenomena of different kinds; they had better not be indicated by the same word." As examples, the supply of cotton cloth in 1877-8 was greatly in excess of the demand owing to the stimulus given to manufacturers in the five or six previous years, while the demand remained much as usual. The consumption of cotton cloth is spread over a wide area, and after certain limited needs have been satisfied, any further supply is superfluous; the demand for it is therefore not liable to violent fluctuations. Here was a case of over-production, But there are OVER-PRODUCTION. 215 other articles (especially such as are intended to gratify the caprices of fashion) the demand for which is very precarious, and may at any moment fall much below the supply, even though the supply has not been augmented in any appreciable degree for years. The straw hat and bonnet trade of Dunstable and its neighbourhood furnishes a case in point. The use of straw-plait had been uninterrupted for a long time; demand and supply had balanced each other; there had been no excessive stimulus to production, and yet a mere freak of fashion was sufficient to throw hundreds out of work. Straw - hats and bonnets, a few years ago, were superseded by those of other materials, and the demand for them almost ceased. This was a case of what Prof. Price calls over-construction. These two phenomena are, as he says, quite different; but the term "overconstruction" is not well chosen. In each phenomenon there is a variable or fluctuating factor, in the first, it is the supply that has fluctuated to excess, and the term " over-production" naturally points to that as the cause of the evil. In the second, it is the demand that has fallen off, and some word which would describe this falling off would point to the cause of the evil at once, which the word" over-construction" does not. Over-Production. Over-production is now very generally regarded as one of the chief causes of those convulsions in trade called panics or crises, and which sometimes reach dimensions which give them the character of a national calamity. Hence the importance of understanding clearly what over-production consists in, of tracing its causes, and devising, if possible, suitable remedies. There are three phases of over-production which merit particular notice. I. Over-production may take place in one or two commodities and no more. This, although a serious matter to those persons specially employed in the production of those commodities, does not affect to any appreciable extent the nation in general. Capital and labour are usually transferred to some other branch of trade, at least for a time, and business then resumes its usual course. A II. A much more disastrous form of over-production is that in which several of the large staple industries or the nation are unduly developed. An example of this occurred in England during the five years which followed the outbreak of the Franco-Prussian war. great stimulus was imparted to English trade during that period, and railways, ironworks, coal mines, cotton mills and numerous subsidiary industries were forced into unusual activity. But a moment at length arrived when it was found that enormous sums had been expended in the accumulation of fixed capital in the form of railways, iron furnaces, new coal shafts, mills, &c., for which no return could be made till after the lapse of years; at the same time immense stocks of goods were manufactured, first under the stimulus of a brisk demand, and afterwards in the hope of a continued demand. Had all this activity been paid for out of profits and savings, no evil would have resulted; but the lamentable fact was that the greater part of it was due to an abuse of credit. Services were paid 216 OVER-PRODUCTION. for by means of bills; bills were discounted, and with the proceeds additional enterprises were started, and this went on under the sunshine of an apparent prosperity till a cloud began to gather. That cloud was a suspicion on the part of those who lent money, or sold credit-namely bankers-that it would not be safe to carry their discounting operations much further, a suspicion aroused probably in the first place by learning that here and there some great manufacturer or contractor had a difficulty in taking up his bills when they fell due. A suspicion of this kind socn spreads, and bankers under those circumstances begin to contract their issues. Failures occur, and then everyone is on the qui vive to learn who is likely to go next. Then comes the crisis, and happy is the community if the crisis does not break out into unreasoning panic. Whether it does go to this length or not, a severe crisis is sure to be followed by great depression, and it is a long time before confidence is restoreď. Meanwhile trade languishes, wages fall, and multitudes are thrown out of employment, and it is not till past troubles are to some extent forgotten that the energies of the people revive, and business resumes its normal course. The remedy for this evil lies almost exclusively with the bankers, and those who deal in credit. III. There is further the supposititious case of universal over-production, that is the over-production of all kinds of commodities. Some economists have rashly said that this is impossible, inasmuch as if all commodities had been produced in superabundance the producers would have nothing to do but live on past produce and cease from producing until the surplus was exhausted. This, however, is neither a correct statement of the case, nor is the inference warranted. Even were it possible, and for the nonce we will assume it possible to produce every kind of commodity in superabundance, yet it is not at all probable that those commodities would be at all proportionately distributed among all the producers. Some would have vast accumulations on their hands, half or perhaps more than half the population would have none whatever; and as these would have nothing but their services to offer in exchange for a share of the surplus, and since, by the supposition, those services for the time being are not required, it follows that they must be reduced to extreme want, if not starvation. The remedy for this evil lies chiefly with the labourers and producers, who must be taught in seasons of prosperity to make provision for the evil day which must inevitably arrive. Instead of living luxuriously and even wastefully in favoured times, they ought to economise and save. They then would have a store on which to fall back in the days of reduced wages, short hours or no work, as the necessities of the occasion may impose. The months or years following a period of over-production are a fine time for persons of fixed and scanty incomes, and for the thrifty class in general. Commodities are then cheap, and consumers luxuriate in the produce showered upon them, while the thriftless and self-indulgent are at their wit's end to procure a meal, PAGARES-PANIC. 217 P. P, occurs in the following abbreviations: pm, premium P.O.O., Post Office Order. P.p., Per procurationem, or Please pay P.P.I., Policy Proof of Interest Pagares. Italian, pagare; from Latin, pacare, to appease, to quiet, from which also is derived our English word, pay. Spanish, pagaré, a bond, or writing of obligation to pay a sum of money.-SEOANE'S Span. Dict. Pagares are Bonds or Promissory Notes printed in the Spanish language. They derive their name from the word pagare (I will pay) which is printed conspicuously on their face. The only Stocks referred to under this name in the English Market are those of the Sociedad Civil of Madrid, but the name is applied to other Stocks and even to coupons, when the significant word is inserted upon them. Panic. Said to be derived from the name of the great god Pan, who is described by the ancients as so hideous a monster that even his nurse fled away and deserted him. He was the terror of rustics who dwelt in the woods and mountains where he made his home. Stories of this sort easily and naturally give rise to the forms of adjectives and nouns in modern languages, just as Herculean is derived from Hercules, and Mercurial from Mercury. The Spanish and Italian have the word panico, and the French, panique, all used in the same sense as the English, panic. A Panic in commerce is an unreasoning and uncontrollable fear which often seizes a trading community on the occurrence of a financial crisis. The effects are often most deplorable, and multitudes who can ill afford to lose their scanty possessions rush into the market to buy, or to sell, or to withdraw their deposits from the bank just at a moment when common sense or the most ordinary discretion would dictate absolute abstention from any action whatever, and not unfrequently would counsel a course of action the very opposite of that pursued under the influence of a passing fright. |