624 
APPENDIX 
“When you stop to realize that every Stock Exchange house has 
not one or two but many such loans, and every lending institution 
hundreds of such loans, you can readily see the great advantages of an 
agreed-upon rate covering all renewals, and so obviating the hundreds 
of telephone calls, misunderstandings, and confusion which would 
necessarily arise if each loan, or even each house or institution, had 
‘0 make individual arrangements as to the renewal rate. 
“Now when a brokerage house requires money, the ordinary way 
is to send a slip to the money desk, asking to borrow, say, $100,000, 
or whatever the amount may be. These slips are honored in the order 
of their receipt, and what money there is available at the time is 
apportioned to borrowers, by the clerk at the money desk, in their 
regular order, and as far as the money available will permit. In 
the same way, money is placed at the money desk by the lending insti- 
tutions, either directly or through their Stock Exchange representa- 
tives, and is distributed among the borrowers under exactly similar 
conditions. 
“The customary procedure is something like this: The cashier of 
a house sends word to the floor telephone clerk to borrow, say, 
$100,000. The telephone clerk writes, probably on an order pad of 
his firm, ‘Borrow $100,000,” and sends the slip to the money desk. 
The clerk at the desk files these slips in the order in which they are 
received, and, as promptly as possible, writes on the slip the name of 
the lending institution and the rate at which the loan is made. This 
slip is then sent back to the telephone clerk of the borrowing house, 
and at the same time the clerk at the money desk notifies the bank 
of the loan just made, and the rate, giving both the name of the 
house and the rate, so, you see, the borrower and the lender do not 
come together. The details are all arranged through the clerk at the 
money desk. It is as simple as it can possibly be made. 
“Of course there are times when the borrowing demands cannot 
be satisfied with the funds on hand, and then it becomes necessary to 
attract money by the effectual method of raising the rate. The oppo- 
site side of the picture occurs when there is a lack of borrowing with 
plenty of money on hand, and the law of supply and demand is again 
the controlling influence effecting the temporary changes in the rate 
which you so often see. 
“In this connection I might say that the efforts of the Money 
Committee in charge of the money market are all centered in keeping 
a stable money market, and preventing, as far as possible, not only 
wide fluctuations in the rate, but even the change in the rate whenever