SECURITY COLLATERAL LOAN MARKET 201 
consists in the face of the envelope itself, made out as above 
described 
Diversification of Security Collateral.—One reason for 
the essential safety of security loans consists in the care exer- 
cised in diversifying their collateral. Each loan is thus a sort 
of miniature investment trust. The high degree of organiza- 
tion in the security loan market has developed an extensive 
technical practice in this respect. 
Years ago, American railway shares constituted a larger 
proportion of Stock Exchange turnover and listings than to- 
day, and were in addition more stable as a rule than American 
industrial shares. In consequence, many “all-rail” loans used 
to be made, as follows: 
ALL-RAIL Loan oF $100,000 
Based entirely on railroad stocks. Margin about 299%, 
200 Delaware & Hudson R. R. at 190. . t 
100 New York Central R. R. at 193.. 
300 Erie R. R. at 78... 
200 Northern Pacific R. R. at 103... 
200 Illinois Central R. R. at 138.. 
38,000 
9,300 
3,400 
‘0c 
[,000 
As industrial issues assumed increasing importance ang 
stability in the market, they came to be included in loan col- 
lateral. Thus additional diversification was provided. In fact, 
before the war, the favorite selection of such collateral con- 
sisted of two-thirds rails and one-third industrials, and was 
known as the “regular” loan on “mixed” collateral. 
OLp RecuLAr LoaN oF $100,000 
Based on mixed collateral, %3 rails and 14 industrials. 
about ; - 
200 Southern Railway at 138.. 
300 Pennsylvania R. R. at 77... 
300 Baltimore & Ohio R. R. at 124. 
200 Consolidated Gas at FIZ cnvanevinnn 
200 American & Foreign Power at 104. 
27,400 
23,100 
37,200 
22,600 
20.800 
[ 200 
$121.100