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APPENDIX 
stock market denying commerce and industry credit? I can find no 
evidence of credit being denied to commerce or productive industry.” 
Again (p. 76): “I cannot discover anywhere where commerce and 
industry have been denied credit for the benefit of making these 
brokers’ loans.” 
(XIf) The true economic nature and significance of call loan rates 
were well set forth in the analysis of the call loan market made in 
‘Senate Document 262, 66th Congress, 2nd Session” (p. 9): “The 
anderlying cause of fluctuations and especially of increases in call 
money rates is the operation of the law of supply and demand. In 
other words, as the supply of loanable funds diminishes in proportion 
to the volume of the demand, the rate for collateral demand loans 
advances. However, in the case of daily borrowings of call money— 
to which the abnormal high and low rates apply and which represent 
but a comparatively small proportion of the total outstanding loans— 
other factors, incidental to the temporary circumstances and conditions 
of the market, tend in times of stress to greater fluctuations in rates 
than result from the more normal operation of the law which is 
reflected in the renewal rate for the greater volume of the outstanding 
call loans. The renewal rate is regarded as the real barometer of 
market conditions and its fluctuations throughout the longer periods 
more nearly reflect the relation between the amount of the loanable 
funds and the amount of the demand. In other words, high renewal 
rates are mainly due to other demands for credit, resulting in part 
from other temporary factors, such as depletion of bank reserves 
resulting . either or both from credit expansion or loss of reserves 
through gold export, speculation in commodities and real estate, and 
congestion of commercial transactions incidental to slow or interrupted 
transportation.” 
(XIg) “The only financial center in this country in which there 
is maintained a call money market of national importance is New 
York City, and while the rates charged there on call loans are fre- 
quently in excess of the legal rates allowed for commercial paper, they 
are not usurious under the laws of the State of New York, which 
specifically exempt collateral call loans from the 6 per cent limitation 
which lenders must observe on other loans on pain of incurring the 
penalty prescribed for usury. Section 115 of the banking law (L. 
i914, ch. 369; Consol L. ch. 2) provides that upon advances of 
money repayable on demand to an amount not less than $5,000 made 
upon warehouse receipts, bills of lading, certificates of stock, etc., or 
sther negotiable instruments, as collateral, any bank may receive and