COMPARISON AND SECURITY CLEARANCE 325
tive parties are received by the firm they are then used to check
against the entries for them on the firm’s “night sheet” or
“clearance sheet.” This sheet, which is thus in process of
preparation all day, is therefore a full record of all purchases
and sales by the firm of cleared stocks that day. In addition,
borrowed and loaned stocks may also appear upon it, as well
as the purchases and sales of an Exchange member who is not
a clearing member but who clears his transactions through the
oiven firm.!®
A Typical Day’s Business.—Suppose that on July 1, 1929
Jenkins & Co. has purchased 1,000 shares of Reading, 500
shares of Steel, 600 shares of U. S. Rubber, and 100 shares of
Otis Elevator, and has sold 80 Reading, 800 Steel, 600 Rub-
ber, and 100 National Biscuit preferred. Since Reading, Steel,
and Rubber are all cleared securities, they will be entered upon
Jenkins’ “night sheet” and be subject to security clearance,
after his transactions in them have all been “compared” by the
exchange of exchange tickets. But the Otis Elevator and the
National Biscuit preferred are not cleared, and will not be
entered or cleared upon his night sheet; after they have been
compared by means of “three-way exchange tickets,” they will
be delivered without obviation. Similarly, if Jenkins had
bought or sold any non-cleared bonds, they would similarly be
omitted from his night sheet, compared with “exchange
tickets,” and delivered without obviation. On this basis, we
must next examine in detail Jenkins’ “clearance” or “night
sheet” (Figure 28), among whose items will be found the sale
of 100 Steel to Wilkins described in an earlier chapter.'?
The Clearance Sheet in Detail. Even at the expense of
a somewhat tedious and perhaps puzzling foray into the dreary
realm of bookkeeping, this clearance sheet will repay careful
study, as it is fundamental to the whole system of stock clear-
ance. In the upper right-hand corner there is a line on which
See Grapter v1, p04,
