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.

530 APPENDIX for loans of other character, and that such higher rates are not pro- hibited as usurious . . .” (Rates of Interest on Collateral Call Loans, Sen. Doc. 262, 66th Congress, 2nd Session, pp. 4-6). In 1929 steps were taken in Illinois to exempt call loans in Chicago from-the State usury law, in order to develop a Chicago call loan market on securities like that of New York. A similar development securred in Pennsylvania in order to assist placing the Philadelphia call loan market upon a less constrained and artificial basis. {(XIh) In 1890 call loan rates touched 186%; in 1892, 40%; in 1893, 73%; in 1895, 100%; in 1896, 127%; in 1899, 186% ; in 1901, 75%; in 1905, 125%; in 1906, 60% ; and in 1907, 125%, Since the establishment of the Federal Reserve system, the highest rate reached by call money was 32% in 1919. It must of course be borne in mind that all such rates are on a per annum basis, that of all outstanding call loans only a very few were actually contracted at those maximum rates, and that presumably borrowers at such rates paid them for one day only, and renewed their loans at a lower rate next day. See also the testimony of Dr. Adolph Miller of the Federal Reserve Board in the Stabilization hearings (p. 681). [n 1929 call loan rates touched 20% and for some months ruled unusually high, as a result of the Federal Reserve Board's attempt to deflate stock market loans. The wisdom or justification of this policy became a subject of active controversy. See the address en- titled “Stock Market Loans,” by President E. H. H. Simmons. May 9, 1929, in Chicago. (XTi) The chief rules in the Stock Exchange Constitution dealing with the hypothecation of customers’ securities are Chapter XII. sections 2 and 4, reading as ¥ollows: Sec. 2. The improper use of a customer’s securities is inconsistent with just and equitable principles of trade. SEC. 4. An agreement between a member and a customer, authorizing the member to pledge securities, either alone or with other securities carried for the account of the customer, either for the amount due thereon, or for a greater amount, or to lend such securities, does not justify the member in pledging or loaning more of such securities than is fair and reasonable in view of the indebtedness of said customer to said member. (XIj) The accuracy with which renewal rates are made can readily be determined by comparing them over a period with the average call rates paid at the money desk on new loans. (The Annual Report of the President of the New York Stock Exchange for 1929-30 ‘p. 108) reports these differences between the annual average rate

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