632 
tion, especially where the local situation was one of a single industry 
or a single occupation, and whose values of land and values of 
Inventories were inflated, have either failed or experienced exceedingly 
great difficulties . . . 
“The First National Bank of Miami, Florida, held $66,000,000 of 
deposits at the height of the boom, and # had $8,000,000 lent in Miami, 
and the rest of its funds were in balances in New York banks, in call 
loans and in United States bonds and other available bonds. When 
deposits went off from $66,000,000 to, I think, $23,000,000 it was able 
to meet that situation . . . That is sound banking . . . it does 
not seem to me altogether wise to create by legislation conditions 
which will confine the employment of bank funds to local uses . . . 
now, so far as safety goes, I do not think that any serious objection 
can be raised against the brokers’ or dealers’ loans. The records in 
regard to losses of banks, although not perfect, clearly indicate that 
the losses of banks arising out of this class of loans have been very 
small.” 
In the Stabilization hearings (p. 679), Dr. Adolph Miller of the 
Federal Reserve Board, speaking of loans available to country banks, 
declared of the call loans on security collateral “it is the safest loan 
there is.” 
In an address by Robert R. Atterbury upon “Call Loans and the 
Renewal Rate” (October 25, 1928), he stated: “The president of one 
of the largest banks, which is a large lender in the Street, told me only 
a short time ago, that in forty years connection with the bank and 
in lending hundreds of millions of dollars during that time, they had 
only lost a matter of less than $15,000. and he laughingly added that 
that was his own fault.” 
In an address by President E. H. H. Simmons in Omaha in 1928, 
he stated: “Today the New York call loan market is undoubtedly the 
most highly organized security loan market in the World. For many 
years there has never been a loss to a single lender arising from a 
call loan made to a Stock Exchange member and based on the col- 
lateral of Stock Exchange securities. Thus call loans are unparalleled 
in their safety to lenders, for the same safety has not heen seen 
even with Government bonds.” 
In the hearings on the La Follette resolution (p. 39), Professor 
O. W. M. Sprague stated: “. . . as far as safety goes, I do not think 
that any serious objection can be raised against the brokers’ or dealers’ 
loans. The records in regard to losses of banks, though not perfect, 
clearly indicate that the losses of banks arisine out of this class of 
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