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.

520 APPENDIX asually in accord with the prevailing local term settlement, which except in Berlin is for the fortnight. Normally, also, the European stock broker or dealer will finance himself from one term settlement to another by what amounts to our New York practice of borrowing and lending shares. This is done without security margins, and is therefore a prevalent source of danger to both borrowers and lenders. To protect the latter, however, such loans (called “contango loans” in England, and reports on the Continent) are made in the form of an allied purchase and sale. When a “bull” position, for example, is carried over, the borrower sells the security to the lender for cash and simultaneously buys it back from him for the fortnightly account; similarly, a “bear” posi- tion is carried over by the borrower buying the security for cash and selling 1t again for the next settlement. (XIb) The Bank of England has long discounted “Lombard loans,” as security loans are called in the London and Continental markets. It Is true that usually the collateral for such loans has in recent years been short-term Treasury notes, known as “floaters,” but no statute restrains the Bank from discounting loans upon other securities, and this has been and is done. Ordinarily the Bank keeps its rediscount rates above market rates to avoid inflation by subsidizing rediscount, and.in order to favor commercial over financial loans it keeps the Lombard loan rediscount rate over the rediscount rate for bills. In the Banque de France, a list is published of the securities acceptable as collateral for loans; in this list are included not only bonds of the French State, and of French colonies, departments and municipalities, but also the shares as well as the bonds of French railways. In the Reichsbank, thg Dawes Plan prohibited the discount of loans on German government securities for fear that it might lead to renewed mark inflation. However, the Reichsbank can discount loans on other securities, particularly perhaps the bonds of agricultural mortgage banks. See also the testimony of Governor Beniamin Strong in the “Stabilization hearings,” p. 318. . (XIc) When the United States entered the war in April, 1917, a Liberty Loan Committee of prominent New York bankers was at ance organized to facilitate the flotation of the inevitable U. S. Gov- ernment War Loans. Later, a sub-committee known as the “money committee” was appointed to supervise the New York money market during the critical period of strain caused by the Liberty Bond flota- tons. As stated in a subsequent report by the Federal Reserve Agent

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