APPENDIX 
625 
it is at all possible, and in their efforts to do so they have had the 
cooperation of most of the large lending institutions.” 
Governor Benjamin Strong bore witness to the rapid improvement 
in the Stock Exchange technique of handling security loans, in the 
Stabilization hearings, p. 354. In the hearings on the amended stabili- 
zation bill (p. 192), Dr. Adolph Miller stated: “The greatest open 
money market in the country today is the call loan market. It is more 
important than it ever was, and vastly more important than anyone 
ever thought it could become after the enactment of the Federal Re- 
serve Act. It is the most available market, the most attractive market, 
that exists for idle funds. Anybody from the Atlantic to the Pacific, 
from Canada to Mexico, who puts his money into the money market 
today, provided the loans are properly handled, knows that he can 
always get his money out whenever he wants it.” 
(XIe) Senate Document 262, 66th Congress, 2nd Session (p. 6), 
states: “In the matter of the supply or attraction of funds to the 
call-money market, there is generally a definite and well-understood 
obligation on the part of the banks to accommodate first their own 
commercial clients, so that it is only the excess of loanable funds 
which they may have from time to time that is available for the col- 
lateral call-money market or for the purchase of commercial paper 
in "the open market. This excess of loanable funds available for 
employment in the securities market varies, therefore, according to 
the commercial requirements of the country. It has long been recog- 
nized that for assurance of a sufficient amount of money to finance 
the volume of business in securities, reliance cannot be placed on a 
rate of interest limited to the rates which obtain or are permitted in 
commercial transactions whose prior claim on banking accommodations 
is universally conceded.” 
The same authoritative document goes on to say: “It is the uni- 
versal custom of the banks to satisfy first the commercial needs of 
their customers, They feel an obligation to customers but none to 
those who borrow in the open market on securities. Besides, as the 
resources of the banks mainly come from the commercial customers, 
their own self-interest compels a preference in favor of their com- 
mercial borrowers, since failure to grant them reasonable accommoda- 
tion would induce them to withdraw their deposits and so reduce the 
ability of the banks to do business. Although the money of the banks 
and trust companies comprises by far the greater proportion of the 
money loaned on the securities market, an examination of the pre- 
vailing rates on commercial paper at times when the call money market