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.

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Document type:: Monograph

Structure type:: Chapter

Title:: Chapter XI. The security collateral loan market

Collection:: Economics Books

SECURITY COLLATERAL LOAN MARKET 297 After the renewal rate has been posted near the money desk, the rate for new call loans may fluctuate upward or downward in accordance with subsequent conditions of supply and demand. Some days no fluctuation at all occurs, while on others the fluctuations may be great. In any case, the first cur- rent rate of the day is posted near the money desk beside the renewal rate, and as changes in the former occur, the latest current rate is at once posted. As long as rediscounting of security collateral loans at the Federal Reserve Bank is for- bidden, comparatively violent fluctuations in their rates are bound occasionally to recur. Are Call Loans Safe?—It has long been recognized by practical American bankers that call loans on listed security collateral constitute the safest and most available form of short-term loan in this country.?* For this safety there are many good and sufficient reasons. Their collateral can speedily be sold on the Stock Exchange, and Exchange quotations are speedily made available to lenders by the ticker. The loans bear an ample margin of collateral value in excess of the amount loaned upon them, and sometimes an additional con- cealed margin in the form of collateral issues marked by the lender below current prices. The lender can demand more or better collateral, re-mark the prices of collateral, or call the whole loan, at once. In addition, call loans are contracted in the name of Stock Exchange firms whose credit, in many cases, would be ample for unsecured banking accommodation. Every such Stock Exchange borrowing firm is sub ject to the discipli- nary rules of the Exchange, which forbid reckless and unsound dealings, to the inspection of its financial condition by the “questionnaire system,” and by many effective indirect methods of financial survey. Finally, each Stock Exchange firm must possess at least one Stock Exchange “seat” which is unmort- gaged and available for creditors in case of suspension for “See Appendix XIk.

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