SECURITY COLLATERAL LOAN MARKET 287
tained the freest, most highly organized, most accessible, and
most public security loan market in the world. Moreover, few
if any money markets anywhere are to the same extent as
completely subject to the natural forces of supply and
demand 7?
When an Exchange firm discovers that additional borrow-
ings on collateral will be needed to carry its engagements, it
usually telephones its floor member on the Exchange; the latter
gets the request at his telephone, and goes to the money desk
with it to discover a lender.
New York bankers usually wait each morning until about
IT:30, when their returns from the Bank Clearing House are
received; they then know their exact financial position, and
therefore whether they should make fresh call loans or with-
draw funds already in them. Later in the day, due to the
shifting of accounts of local or out-of-town depositors, the
bank’s position may be changed, and the amount of its funds
available for call loans either increased or decreased. Thus a
given lending institution may make new loans early in the day
only to withdraw funds from the market later, or call its loans
early and make new loans afterwards. In calling a loan, the
banker telephones the borrower direct. But in making new
loans at the money desk, the incorporated bank cannot g0 upon
the Stock Exchange floor itself (not having a Stock Exchange
membership) to discover who wishes to borrow. For this
reason the banker usually telephones to the office of some Stock
Exchange firm and requests it to do so for him. Exchange
firms are always willing to perform this service to lenders
without fee or charge. The Exchange firm then telephones to
its floor member on the Exchange, who next proceeds to the
money desk with the bank’s offer to lend money, and enters the
offering with the clerk at the desk.
Thus, much the same machinery is used in borrowing or
lending money on the Exchange, as for purchasing or selling
17 See Appendix XIa.
18 See Chapter XVI, p. 443.
