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 309 satisfactory as the present cash settlement for many reasons inherent not only in the New York money and stock markets, but in the whole economic character of the United States. To mention only one drawback, a term settlement would at once lead to much greater speculative trading, since traders would be dealing entirely in open contracts until the arrival of settle- ment day. It was for this and other reasons that the shrewd Amsterdamsche Beurs, some years ago, refused after careful investigation to establish a term settlement in their market which, like that on the New York Stock Exchange, had long been on a cash settlement basis. The collapse of term settle- ment systems in Europe during the war has, even after their subsequent resumption, made them less popular there than prior to 1914. Many conservative firms in London today refuse to “carry-over” or “contango” securities bought for the account. In the writer's opinion, the New York Stock Ex- change should not attempt to tear down and disorganize the present highly perfected call loan system, for the sake of benefits which appear more likely on theoretical than upon realistic and practical grounds. While the foreign term settle- ment systems may satisfactorily meet existing conditions in foreign security markets, under the totally different economic conditions in this country they would not afford any genuine improvement in our financial markets over indigenous and existing American methods. Rediscounting Security Loans.?>_The Reserve Act speci f- ically forbids rediscounting of collateral loans upon other than U. S. Government collateral. The inability of the Reserve Banks to rediscount security loans keeps them out of direct contact with the security loan market—the largest and most highly organized section of the New York money market— and thereby interferes with their ability to lead and on occasion to control it. For to make its policies effective in the security loan market, the Reserve system must relax or tighten credit as ston S55, Address of President E. H. H. Simmons in Chicago, May 9, 1929, on

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