Speculation and Brokers’ Loans 229 
other sources. The loans for “other,” namely, 
corporations and individuals who instructed the 
banks of which they were patrons to lend funds 
for them in the call market, amounted to $922,000,- 
000 in October, 1927. In October, 1929, the loans 
for “others” amounted to $3,907,000,000, having 
more than quadrupled in two years. The loans for 
out-of-town banks increased by 50 per cent. Both 
classes of loans increased by $3,500,000,000. 
“The market,” Mr. Roberts says, “had found a 
way to go around the banking system to the original 
sources of funds, that is, in savings, profits and other 
free funds that would normally go into permanent 
investments.’ 
Higher Foreign Discount Rates 
But the rising interest rates called American cap- 
ital from its employment abroad and transferred 
foreign capital to this country. By October, 1929, 
we had recovered one-half of the half billion gold 
exported during the preceding two years. 
This alarmed the central banks in Europe. fifteen 
of which raised their rediscount rates during 1929, 
while Canada and Argentina set up embargoes on 
gold exports to this country. With the increase in 
the Bank of England discount rate to the unusual 
figure of 614 per cent on September 26, New York 
exchange depreciated, indicating the withdrawal of 
foreign funds from our market. The situation was 
aggravated by the failure of the issuing house of