The work of the Stock Exchange

Bibliographic data

Monograph

Identifikator:: 1831284952

URN:: urn:nbn:de:zbw-retromon-225876

Document type:: Monograph

Author:: Meeker, James Edward http://d-nb.info/gnd/126597340

Title:: The work of the Stock Exchange

Edition:: Revised edition

Place of publication:: New York

Publisher:: The Ronald Press Company

Year of publication:: [1930]

Scope:: XVI, 720 Seiten; Illustrationen, Diagramme

Digitisation:: 2022

Collection:: Economics Books

Usage license:: Get license information via the feedback formular.

Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Chapter XI. The security collateral loan market

Collection:: Economics Books

278 THE WORK OF THE STOCK EXCHANGE for example, were forbidden by the Act to rediscount loans on any security collateral except U. S. Government issues. Thus the central bank system of a country which by virtue of its economic character requires and enjoys the most widespread security business in the world, is forbidden to rediscount a type of loan eligible for the Bank of England and other central banks in countries whose financial needs are to a greater extent mercantile.? That this discrimination against rediscounting security col- lateral loans has been artificial and legislative rather than founded on sound economic reasons, has been demonstrated by the fact that security loans have steadily increased, and have been depended upon to afford flexibility and liquidity to the whole New York money market. The attempt by statute- making to deny or ignore essential economic fact has thus resulted in artificially separating the security collateral loan market from the other parts of the New York money market, in respect to its interest rates and to some extent its conditions of supply and demand.* War Time Regulation of Security Loans.—A fter America entered the Great War, it became imperative to divert as much as possible of our capital into the flotation of our vast new Liberty Loans. Yet it was found necessary to issue U. S. Government bonds faster than they could be taken up outright by available capital or private savings. Therefore, the Govern- ment urged the public to buy them on credit or “margin,” and this naturally led to vast increases in loans on security collat- eral. Lest the general investment market should compete with the State for available American capital and credit, an appeal was made by the “Money Committee” in New York to the Stock Exchange, and the latter undertook to limit increased borrowing in securities by its members.’ At the same time the leading New York banks provided a pool of funds to carry 3 See Appendix XIb. L See Sen. Doc. 262, p. 9. 5 See Appendix Xlec.

Access restriction

Copyright

fullscreen: The work of the Stock Exchange

Monograph

Chapter

Table of contents

Download

Monograph

Chapter

This page

Image fragment

Citation links

Citation recommendation