282 THE WORK OF THE STOCK EXCHANGE

in securities, or to make commercial loans to borrowers whose
credit would not justify unsecured banking advances.
In the New York financial center, however, security loans
are made almost entirely for financial reasons, such as carrying
customers’ margin purchases for a broker,” or undistributed
new securities for a dealer.’® Since firms which are members
of the New York Stock Exchange may also be members of the
New York Curb Market or of out-of-town stock exchanges,
may participate in new security underwritings and flotations
and may also operate extensive “unlisted departments” dealing
in securities whose only market is “over-the-counter,” the security
 loans contracted by Stock Exchange houses may occasionally
 contain in their collateral, issues listed on many different
stock exchanges and sometimes on no stock exchange at all.
In the aggregate, security collateral carried in this way in Wall
Street constitutes the dealers’ floating or market supply of
securities, or the amount which investors have not as yet
purchased.
We have seen! that a broker who purchased 100 shares of
Steel at 150 for his customer on a 50-point margin, has to pay
ff the seller in full the next day, and therefore has to obtain
promptly the $10,000 which the customer owes on the security.
This he does as a rule by placing the certificate in a collateral
loan, and if necessary financing himself on unsecured “day
loans” until the proceeds of the secured loan become avail:
able. 12

As a rule, it is between 10 A.M. and 2:30 P.M. that Stock
Exchange firms telephone their floor members to obtain collateral
 loans to carry the aggregate amount of the day’s transactions,
 or on account of loans previously made but then called
or paid off, or for other purposes. The floor member who
receives such a message goes to the “money desk” on the floor
and thus gets in contact with the available lenders.

® See Chapter VII, p. 182
10 See Chapter IV, p. 91.
u Chapter VII, p. 182,
i2 Chaoter XII, pn. 343.