374 THE WORK OF THE STOCK EXCHANGE 
tution for the amount of the loan, made payable to the Stock 
Clearing Corporation for the borrower’s account. Thus the 
lender has his collateral, has paid over the principal of the loan, 
and is now finished with his part in making the particular 
loan. 
Further details of the operation, however, remain to be 
concluded between the borrower and the Stock Clearing Cor- 
poration. The latter, on receipt of the lender’s check, credits 
it to the account of the borrower. If this leaves the borrower 
with a large credit balance at the Corporation, he can under 
certain restrictions draw this down, as we will see in the next 
chapter.® On the other hand, if before the receipt of the 
lender's check by the Stock Clearing Corporation the bor- 
rower’s account with the Corporation contained a heavy debit 
balance, the deduction from this debit balance of the check for 
the new loan turned over to the Corporation will materially 
assist in restoring the borrower’s credit or debit balances 
with the Stock Clearing Corporation nearer to a proper propor- 
tion. 
Future Simplification of Loan Clearance.—The clearance 
of loans as above described was inaugurated by the Stock Clear- 
ing Corporation in 1921. But when the Central Delivery 
Department was established in 1929, a means was created 
whereby Stock Exchange members and New York banking 
institutions (not members of the Exchange) could deliver and 
pay for securities between each other. These new facilities 
have so far been employed for purchases and sales of securities 
only, yet they might be readily utilized to handle the payment 
of new loan-funds and the delivery of collateral to the lender, 
or conversely the repayment of old loans and the return of 
collateral to the borrower. If handled as simply an affair of 
debits and credits between New York banking institutions and 
Stock Exchange firms, as is already done with sold or pur- 
chased securities, it would greatly reduce the clerical work now 
13 See Chapter XIV, p. 397.