The work of the Stock Exchange

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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

288 THE WORK OF THE STOCK EXCHANGE securities. Like orders to buy or sell, offers to lend or borrow money may be “limited” at some fixed figure—say 4%, or may like a “market order” be without such limitation. The clerk at the money desk neither lends nor borrows money himself, nor settles details concerning the nature or amount of the secu- rity collateral. He simply puts borrowers and lenders in touch with each other, and then withdraws from the operation en- tirely, leaving such details for them to settle. As compared with the old system of bidding for money at the “money post,” the operation of the money desk system has undoubtedly served to stabilize the call loan market. Loan Agreements.—As has been seen, specific agreements are sometimes entered into between borrower and lender as to the terms of time loans. Call loans change too rapidly to permit such a practice in their case, and thus general or “blan- ket” agreements between borrowers and lenders are usually employed. When a new Stock Exchange house is organized, usually it files such an agreement with the chief lending insti- tutions in Wall Street, concerning call loans which in the future may be made between them. The call loan market in New York is, however, so old and so thoroughly organized, ‘hat its operations can be and are carried on by common cus- tom; for this reason, these loan agreements (see Figure 21) are for the most part a formality and a precaution rather than a practical factor in the market. Thus in practice the Exchange member who has loaned funds for a bank at the desk, simply informs the lender as to whom the loan was made, and then steps out of the trans- action completely. Similarly, the Exchange member on the floor who has borrowed funds for it, informs his firm. It then remains for the borrowing office to deliver the security collateral involved to the lender, and to obtain the lender’s funds. Settlement of Loan Contracts.— Thus far only the con- tracts for lending call money on the Exchange have been de-

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