SECURITY COLLATERAL LOAN MARKET 28g 
scribed. We must now see how such contracts are carried out. 
The payment of the loaned funds by the lender may or may 
not be made through the Stock Clearing Corporation by spe- 
cific methods presently to be described.’ A more complicated 
task is the preparation of the security collateral by the bor- 
rower and its submission to the lender. 
STAMP. 
nom all Len by these Presents, That the undersigned, In consideration of nancial accommodas 
tions given, or to be given, or continued to the undersigned by!The Blank Trust Co. of the City of New York hereby agree 
with the said firm that whenever the undersigned shall become or remam,’ directly or Indirectly, indebted to the said hrm fol 
money lent, or for money paid for the use or account of .the undersigned, or for any overdraft or upon any endorsement, draft, 
guarantee or in any other manner whatsoever, or upon any other claim, the said firm shall then and thereafter have the follow. 
ing rights, in addition to those created by the circumstances from which such indebtedness may arise against the undersigned. or 
bis or their executors, administrators or assigns, namely: 
L All securities deposited by the undersigned with said firm, as collateral to any such loan or indebtedness of the under- 
signed to said firm, shall also be held by said firm as security for any other liability of the undersigned to said firm, whether 
then existing or thereafter contracted; and said firm shall also have a lien upon any balance pf the deposit account of the 
undersigned with said firm existing from time to time, and upon all property of the undersigned of every description left with 
raid firm for safe keeping or otherwise, or coming to the hards of said firm in any way, as security for any liability of the 
undersigned to said firm now existing or hereafter contracted. 
2. Said firm shall at all times have the right to require from the undersigned that there shall be lodged with said firm 
as security for all existing liabilities of the undersigned to said firm approved collateral securities to an amount satisfactory to 
said firm; and upon the failure of the undersigned at all times to keep a margin of securities with sd firm for such lia- 
bilities of the undersigned, satisfactory to said firm,. or upon any failure in business or making of an insolvent assignment by 
the undersigned, then and in either event all liabilities of the undersigned to said firm shall at the option of said firm become 
immediately due and payable, notwithstanding any credit or time allowed to the undersigned by any instrument evidencing any 
of the said liabilities. 
4. Upon failure of the undersigned either to pay” any indebtedness to said firm, when becoming or made due, ‘or to 
keep up the margin of collateral securities above provided for, then, and in either event, said firm may immediately, without 
advertisement and without notice to the undersigned, sell any of the securities held by it as against any or all of the liabilities 
of the undersigned, at private sale or Brokers’ Board or otherwise, and apply the proceeds of such sale, as far as needed, 
toward the payment of any or all of such liabilities, together” with interest and expenses of sale, holding the undersigned re- 
wonsible ‘for any deficiency remaining unpaid after such application. If any such sale be at Brokers’ Board or at public 
suction said firm may itself be a purchaser at such sale free from any right or equity of redemption of the undersigned, such 
right and equity being hereby expressly waived and released. Upon default as aforesaid said firm may also apply, toward the 
payment of the said liabilities, all balances of any deposit account of the undersigned with said firm then existing. 
It is further agreed that these presents constitute a continuing agreement, applying to any and all future, as well as to 
existing, transactions betwgen the undersigued and said firm. - - 
Oo, 
Dated New York wie. 
Figure 21. General or “Blanket” Loan Agreement 
Employed to cover call loans. 
Except with loans on bond collateral (which being in 
$1,000 pieces, is apt to prove too bulky) security collateral 
is placed in a large paper envelope (Figure 22). Securities 
used as collateral in this way belong to the Stock Exchange 
firm itself, or to its customers who have purchased them on 
margin. In the latter case, the customer has already agreed 
to their hypothecation according to the rules of the Stock Ex- 
change.” The outside face of the loan envelope contains the 
name of the borrower and the lender, the date, the principal 
10 See Chapter XIV, p. 374.