128 THE WORK OF THE STOCK EXCHANGE 
As shown in the illustrating statement, Blank is thus debited 
with $43.67. These figures, as has been stated, were arrived 
at on the basis of a 6% rate. But, let us suppose that our 
example is taken during a period of fairly tight credit, the 
money which the firm had to borrow for Blank probably cost 
fully 6%. The exact rate of interest at which he is charged is 
erived by averaging the rate paid by the house on all of its 
various loans during that month. Let us suppose that this 
average rate of interest amounts in this case to 6%. ‘The firm 
adds 1}5—Ilet us say—as a service or “carrying charge” to 
compensate it for its trouble, expense, and risk in making these 
loans for its customers. This means that in addition to the 
6% at which the interest was already arbitrarily calculated, a 
carrying charge of 125% must be made. Therefore, the 
$43.67 (or interest at 6%) is increased by 25%, giving $54.59 
as the total interest and carrying charges. This sum is accord- 
ingly entered as a debit on the customer’s statement. The Con- 
stitution of the Exchange®® forbids its member firms from 
competing unfairly with each other for business by charging 
“special and unusual rates of interest.” Such a practice is 
looked upon by the Exchange as tantamount to a breach of its 
commission law.2® 
After these interest items are figured in, Blank is shown to 
have a total debit balance, at the end of the month of $21,- 
049.09. In addition, his account shows that he is long of the 
securities which he originally left with Jenkins & Co. as margin 
—namely, his five $1,000 Atchison 4s and 40 shares of Penn- 
sylvania, as well as 100 Reading, the 100 Baltimore & Ohio, 
and the 100 Pan-American Petroleum B shares, which he 
hought on margin during the month. 
Determining the Customer’s Margin.—But what Mr. 
Blank is principally interested in, is what his equity in the 
account, or the sum of money belonging to him in it, amounts 
3 See Constitution (Rules, Chapter VII, Sec. 9).