427 
Dividends and Premiums.—In a previous chapter it was 
stated that dividends upon the customer’s long stock were paid 
to him, while dividends upon his short stock he was himself 
forced to pay.” The accompanying statement gives illustra- 
tions of both cases. When the dividend on Reading is paid, 
Blank is already long 100 shares of this stock, and accordingly 
he is credited $100 for the quarterly $1 per share. But when 
the 50 cents per share quarterly dividend on Columbia Gas & 
Electric is declared, Blank is short of 100 shares, and conse- 
quently he is debited with $50. 
Still another item remains to be explained—the charge for 
a premium for three days of 14 on the 100 shares of Crucible 
Steel of which the customer is short. We have seen? that 
when the floating supply of a given stock becomes scanty and 
it is difficult to borrow it, the borrower must sometimes pay a 
premium to get the desired stock. Evidently this was Blank’s 
experience with Crucible. On August 26 he sold 100 shares 
short at 110 and did not cover the sale until the 29th, when he 
purchased the same number of shares. In the interim, of 
course, Jenkins & Co. had to borrow the 100 Crucible for him 
and, owing to its temporary scarcity, had to pay a daily pre- 
mium of 4%, or $25, for it, for three days. Accordingly, 
Blank is debited for $75. 
THE COMMISSION HOUSE 
Computation of Interest.—Lastly, there remains to be 
considered the important factor of interest charges. These are 
calculated upon the detachable slip on the right of the state- 
ment. The column headed “Balance for Interest” contains the 
cash amounts upon which the customer is due to receive or pay 
interest. To save time, all interest charges or credits are first 
calculated at 6%, and the total credits and debits are then 
adjusted to the correct and actual rate, which of course may be 
either more or less than the flat 6% rate first employed. 
At the end of the month, a total interest item is obtained. 
7 See Chapter VII, p. 188,