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 XIII. Security delivieries, loans, and transfers

Collection:: Economics Books

374 THE WORK OF THE STOCK EXCHANGE tution for the amount of the loan, made payable to the Stock Clearing Corporation for the borrower’s account. Thus the lender has his collateral, has paid over the principal of the loan, and is now finished with his part in making the particular loan. Further details of the operation, however, remain to be concluded between the borrower and the Stock Clearing Cor- poration. The latter, on receipt of the lender’s check, credits it to the account of the borrower. If this leaves the borrower with a large credit balance at the Corporation, he can under certain restrictions draw this down, as we will see in the next chapter.® On the other hand, if before the receipt of the lender's check by the Stock Clearing Corporation the bor- rower’s account with the Corporation contained a heavy debit balance, the deduction from this debit balance of the check for the new loan turned over to the Corporation will materially assist in restoring the borrower’s credit or debit balances with the Stock Clearing Corporation nearer to a proper propor- tion. Future Simplification of Loan Clearance.—The clearance of loans as above described was inaugurated by the Stock Clear- ing Corporation in 1921. But when the Central Delivery Department was established in 1929, a means was created whereby Stock Exchange members and New York banking institutions (not members of the Exchange) could deliver and pay for securities between each other. These new facilities have so far been employed for purchases and sales of securities only, yet they might be readily utilized to handle the payment of new loan-funds and the delivery of collateral to the lender, or conversely the repayment of old loans and the return of collateral to the borrower. If handled as simply an affair of debits and credits between New York banking institutions and Stock Exchange firms, as is already done with sold or pur- chased securities, it would greatly reduce the clerical work now 13 See Chapter XIV, p. 397.

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