CHAPTER XIII

SECURITY DELIVERIES, LOANS, AND
TRANSFERS

In the previous chapter it was pointed out that the whole
process of security clearance and settlement involved five essential
 stages. The first two of these—comparison and security
clearance—have already been described in Chapter XII, while
the last two—money clearance and money settlement—remain
to be dealt with in the next chapter. The present chapter will
be devoted to the third stage—that of security deliveries and
security loan handling, as well as to the Transfer Department
of the Stock Clearing Corporation.

Former Methods of Making Security Deliveries.—By
rule of the Stock Exchange, the security deliveries called for
by “regular way” purchase and sales contracts on the Exchange,
 must be made on the next full business day following
the date of contract. In consequence, Stock Exchange firms
deliver and receive securities in the daily settlement from about
[0 A.M. to 2:15 P.M. each full business day.
Until the recent inauguration of centralized security deliveries,
 of which more anon, it was the immemorial practice
in Wall Street for each Stock Exchange firm which was a
seller or lender to make deliveries of the securities direct to the
office of the buyer or borrower who had these particular securities
 to receive.! Originally the deliverer’s messenger was given
in exchange a check in payment by the buyer; after the establishment
 of the Day Branch of the Stock Clearing Corporation
in 1920, the deliverer’s messenger obtained, instead of a money
check, a special receipt on what is known as the “delivery

 W——.

1 See Appendix XIlIa.

4