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.

APPENDIX 637 Meanwhile, however, the continual growth of stock market activity rendered the problem of certification increasingly burdensome to the hanks. Stockbrokers themselves likewise experienced greater and greater difficulties in making security deliveries and money payments each day under the cash settlement system. It was thus the growth of the stock market itself which primarily brought matters to a head. A Special Committee appointed by the Stock Exchange to study the subject reported. “Our present system of actual payment of entire value in every transaction blocks up in active times both banks and Hffices to an intolerable extent, and is an obstacle to the growth of the business commensurate with the growth of the country.” The clearing system proposed by the Committee and later adopted by the Exchange (today embodied in the work of the Night Clearing Branch) was not original but modeled upon previous attempts in New York and upon stock clearing systems successfully inaugurated in other American cities. It differed fundamentally from European clearance systems, since it was based upon a daily rather than upon 2 term settlement. Its most significant features consisted in the thoroughness and accuracy of its detailed provisions, and in the fact that it was made compulsory for its members by the Stock Exchange. The conservative fears of many Stock Exchange members led 244 out of 1,100 members to vote against the constitutional amendment by which the Exchange adopted this compulsory clearing system. The frst clearance was held May 17, 18g92—the centennial of the first New York stock-brokers’ agreement from which the Exchange originally {erived. The result was awaited with curiosity. Only four stocks were cleared—Reading, St. Paul, Louisville & Nashville, and Northern Pacific preferred. Only one error was reported, and the guilty mem- ber was fined $5. On this day shares cleared both sides were 261,000, valued at about $16,000,000. Stock balances amounted to only 25,000 shares worth $1,383,000, and cash balances amounted to $822,000. Thus, even in the clearance of only four active stocks, the new system obviated the employment of approximately $7,000,000 in certified checks; the manager of the clearing house and his ten clerks could consequently look with real satisfaction on this first day’s work. The emphatic success of the new system almost immediately dissi- rated the objections which some Stock Exchange members at first entertained in regard to it, and its obviation of the need for large amounts of certified checks won for it the instant approval of the banks. Exchange members found that special clerical work required by it was more than offset by the economies which it effected for them, and experience showed that fears as to possible dangers of the revealing

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