The work of the Stock Exchange

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Monograph

Identifikator:: 1831284952

URN:: urn:nbn:de:zbw-retromon-225876

Document type:: Monograph

Author:: Meeker, James Edward http://d-nb.info/gnd/126597340

Title:: The work of the Stock Exchange

Edition:: Revised edition

Place of publication:: New York

Publisher:: The Ronald Press Company

Year of publication:: [1930]

Scope:: XVI, 720 Seiten; Illustrationen, Diagramme

Digitisation:: 2022

Collection:: Economics Books

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Document type:: Monograph

Structure type:: Chapter

Title:: Chapter XII. Comparison and security clearance

Collection:: Economics Books

COMPARISON AND SECURITY CLEARANCE 343 amount cleared about 50% represented intermediate contracts which (under the old “Clearing House of the New York Stock Exchange” or the present Night Branch) could be cleared with- out the need of banking accommodation. Since the banking accommodation needed by Stock Exchange members to settle their daily purchases and sales is in practice obtained by them on unsecured “day loans” at the banks, the operations of the security clearance system have greatly reduced the amount of these day loans regularly required, and therefore the amount of certified checks in which the day loans were employed by the brokers. Secondly, the security clearance system has effected a vast saving of time, not only through its settlement of intermediate contracts but also in the direction which it has given to the deliveries of stock balances, and the simplification it has pro- duced in money payments through its use of “settlement” or “delivery” prices. In the large stock markets since 1900, it would have been impossible without the security clearance sys- tem to have maintained the “daily settlement system” on the New York Stock Exchange, whereby deliveries are to be com- pleted by 2:15 the first full business day after the date of contract. Stock clearance has prevented breakdowns in the stock market, just as bank clearance has prevented breakdowns in the money market. A third service rendered by security clearance is the huge economies it has effected in labor. Indeed, the whole process of clearing and settling security contracts is from one stand- point simply a great labor-saving device, as Stock Exchange members would instantly appreciate were the Night Branch operations suddenly suspended. As in other branches of Amer- ican business, the security market has been able to pay its employees more because it has as far as possible eliminated the purely mechanical tasks which do not require special intelli- gence and aptitude—such as messenger service and routine clerical work. In addition, the security clearing system per-

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