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

SECURITY COLLATERAL LOAN MARKET 367 change and on other American stock markets, and the accumu lation of a large “floating supply” or stock market inventory of securities held by dealers on credit rather than by investors. The funds employed in these loans came not only from Amer- ican and foreign banks, but also (particularly during 1929) from American cotporations, finance companies and individual investors; this latter group was designated “‘other lenders.” Owing alike to the rise in the loan totals and the restrictive credit policies of the Federal Reserve system, call loan interest rates rose in the spring of 1929 to 20%. The high rates, however, only drew into the loans more funds from “other lenders,” and thus resulted in increases rather than decreases in the loan totals. In September, 1929, the stock market declined gradually, yet heavy flotations of new securities led to further expansion in the loans. The stock market panic broke out on Thursday, October 24, when reported sales totaled more than 12,000,000 shares, and reached its height Tuesday, October 29 when reported sales of 16,400,000 shares (or, counting in odd-lots and other non-reported sales, over 23,000,000 for the day). After a rally, there was a further slump during early N ovember ; by November 14 the panic was over. During the critical week of October 23-30, “brokers’ loans” (according to Federal Reserve statistics) declined $1,095 millions: but, whereas “other lenders’ ”’ loans fell $1,381 millions, and loans by out-of-town banks $707 millions, loans by New York banks increased $993 millions. Thus New York banks during the crisis not only did not call their loans, but courageously took over about a billion of loans which other lending parties had called. The loans were, however, liquidated by the borrowing brokers so rapidly that this addi- tional advance by New York banks to the stock market was retired in the next few weeks, The call loan situation in 1929 afforded a strong contrast to that prevailing during the crisis ten years before. In 1919-20, the United States suffered from an acute shortage of credit which caused high call rates, and a liquidation of the

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