366 THE WORK OF THE STOCK EXCHANGE
the depository bank in favor of the lender. This check is then
handed to the lender. So financially sound is the Corporation,
with its large clearing fund always on deposit as a liquid and
revolving fund, that its checks are not certified. The lender
collects the proceeds of the check he receives, through the Bank
Clearing House.
If the lender desires a receipt for the securities he has de-
livered to the Stock Clearing Corporation, the latter will sign
to that effect on the return loan agreement form brought to the
Stock Clearing Corporation by the lender.
“Secured” and “Unsecured” Accommodation.—Mean-
while, in the borrower’s cage at the Stock Clearing Corpora-
tion, the securities constituting the collateral to the loan paid
off are held for the borrower’s account, and he is debited with
the amount of the principal and interest of the loan which the
Stock Clearing Corporation has just paid to the lender on the
borrower’s behalf. But it must be noticed that this debit item
is not “unsecured accommodation,” as is the case with debits
incurred by clearing members through receiving stock balances.
For, to balance the debit of the borrower on the Stock Clearing
Corporation’s books which was created when the latter paid off
the loan to the lender, the Corporation holds the security col-
lateral. Consequently, this debit item is “secured accommoda-
tion” and is dealt with as such on the books of the Corporation.
A separate sheet! in each cage contains the summarized ac-
count of both the secured and unsecured accommodation
employed by each member, as well as their offsetting credit
items. Thus the Stock Clearing Corporation at all times can
tell to a penny the exact financial position with it of the clear-
ing member in question. The collateral received by the Stock
Clearing Corporation is almost automatically acceptable to it.
since the lender was willing to hold it overnight.
The above operations take place during the morning in two
shifts. If the borrower takes the return loan agreement to the
11 Qee Chanter XIV. p. 401.
