284 THE WORK OF THE STOCK EXCHANGE
times there may be intermediaries between the original lender
and the New York institution; interior banks, for instance,
instead of sending their funds direct to New York banks, may
turn them over to large nearby banks in Chicago, Boston,
Cleveland, Detroit, and other centers, and these institutions
may in turn send them fo New York to be invested in the
security loan market.
Bankers, whether in New York or not, will necessarily
prefer to make commercial loans to their regular clients and
depositors, rather than to make largely impersonal security
loans. This is due to the fact that to survive and grow in
competition, banks must build up their deposits, which commercial
 lending facilitates much more than do stock market
loans. As a result, it is only the excess funds of banks, over
and above what they can safely lend to commercial customers,
that are loaned on security loans.”® Usually the rate on the
latter is lower than those for local commercial loans and advances.
 But the banker must in the interests of self-preservation,
 keep some of the funds entrusted to his care in speedily
recoverable form, and for this purpose the proven safety,
liquidity, and availability of security call loans have commended
them to him for many years. Due to the highly organized
security loan market in New York, lenders everywhere can
secure safety and liquidity sin the investment of their shortterm
 funds, and thus avoid the waste incident upon idle funds
and the losses arising from improperly secured and illiquid
placements of funds. On the other hand, this vast mobilization
of surplus funds in New York makes it possible for the financial
 center there to provide a broad and continuous capital
market for the whole country, and to enable the wholesale flow
of money into productive facilities for industry and trade.
The New York Security Loan Market.—Security collateral
 loans can be and are negotiated in New York in three
different ways: (1) by direct dealings between borrower and
lender; (2) through professional money-brokers; and (3)
18 See Appendix XlTe.