SECURITY COLLATERAL LOAN MARKET 281 
the borrower allows the value of his collateral securing a time 
loan to decline below the margin agreed upon, then by the 
terms of the time loan agreement the loan immediately becomes 
due, irrespective of its maturity date, and the lender can at 
once demand payment. This being refused, he can at once sell 
the collateral securities to recover the principal and interest of 
his loan. In practice the borrower always hastens to put up 
more collateral on his time loans, whenever such a course is 
necessary. 
Generally speaking, the interest rate for time money relates 
to the prevailing and anticipated movement in the rates for call 
loans. The proportion of time and call loans in total security 
loans varies from time to time according to conditions, but the 
call money always constitutes the larger part, owing primarily 
to its greater popularity with lenders. For the same reason, it 
is normal for call interest rates to rule slightly lower than time 
loan rates. Time funds have constituted more than 40% and 
as little as 10% of all outstanding security loans. 
The Call or Demand Loan.—As its name implies, the call 
or demand loan can be “called” or terminated on the demand 
of either the borrower or the lender, the day after it is made. 
Legally, indeed, the call loan can be terminated at any time, but 
the unwritten custom of Wall Street forbids the calling of 
loans after noon, and thus they constitute at least overnight 
funds. Only a small proportion of call loans, however, is 
actually called each day; the bulk of such loans outstanding 
are renewed daily, frequently at varying interest rates. Some 
call loans have actually been outstanding for fifteen or twenty 
years, but such cases are of course exceptional. Due to the 
high degree of market organization, the calling of loans in- 
volves no personal feeling on the part of either borrower or 
lender 
The Demand for Security Collateral Loans.—I pans are 
often made on security collateral by American banks entirely 
outside of Wall Street, either to facilitate investing or trading