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 XIII. Security delivieries, loans, and transfers

Collection:: Economics Books

SECURITY DELIVERIES, LOANS, AND TRANSFERS 361 sale contracts. A description has already been given® of the methods whereby commission houses finance their transactions in securities requiring credit accommodations, by means of these collateral time and call loans. The latter type, since they are payable on demand, are constantly being shifted. F ormerly this process of shifting a demand loan from one lender to another, created a fairly steady need of temporary banking accommodation on the part of Stock Exchange houses. In case Jenkins & Co. had its loan for $100,000 called by the lending bank A, the firm would make an agreement with bank B to obtain from it a similar sum on the collateral then reposing in A’s vaults. But Jenkins & Co. might not find it convenient to obtain this security collateral from A until it had B’s check for $100,000 with which to retire A’s loan; on the other hand, Jenkins & Co. could not obtain the funds from B until it had delivered the same security collateral to B's loan window. Thus Jenkins & Co. might find itself in the tem- porary dilemma of not being able to get the money loan until it got its securities, and not being able to get its securities until it got the money loan. This situation was somewhat similar to that previously described” in connection with the receipt and delivery of securi- ties which the firm had purchased and sold, and it was solved in much the same way. Just as the banks make “day loans” to brokers which enable the latter to pay for securities which they have purchased and are due to receive in the settlement, so too “day loans” are furnished the brokers as temporary accommo- dation for a few hours wherewith to shift collateral loans. Thus, Jenkins & Co. would obtain such a “day loan” at Bank C, draw upon it and have certified a check for $100,000, deliver the check to A, get the security collateral, turn it over to B, get B’s check for $100,000 and turn it over to C, thus retiring the firm’s “day loan” at the latter institution. In order to effect an economy in the amount of such “day See Chapter XI, p. 287

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