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 accordingly
 entered as a debit on the customer’s statement. The Constitution
 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 Pennsylvania,
 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).