APPENDIX 
633 
loans have been very small. Therefore . . . I rule out the matter 
of risk.” 
In the same hearings (p. 40), Senator Carter Glass said: “Before 
you leave the point of securities and bank failures, I may say for 
myself that I do not think any loan is ordinarily safer than brokers’ 
{oans.” 
[n the same hearings (p. 69), Governor Roy Young testified: “The 
first question was, are brokers’ loans safely and conservatively made? 
From all the information I can gather, I do not think there can be 
any question about the safety of these loans at this time, and of their 
liquidity.” Again (p. 77): . . I am not prepared to say whether 
brokers’ loans are too high or too low. I do not think anybody else 
can say so. I am satisfied that they are safely and conservatively 
made.” The Hon. Edmund Platt (ibid., p. 88) referred to brokers’ 
‘oans as “the safest loans the banks make.” 
Similar testimony was given by Dr. Adolph Miller in the “Stabili- 
zation hearings”; he refers (p. 679) to brokers’ loans as “the safest 
loan there is,” and (p. 681) “it is hard to imagine a contingency 
ander which there would be any difficulty in getting their (i.e., the 
country banks’) money back promptly.” Dr. Miller also stated (p. 
848): “While in the olden days there was no question as to the 
goodness of these collateral loans—their safety and security—ex- 
perience has demonstrated, notably in 1907, that at times of acute 
strain and monetary stringency out-of-town banks might have diffi- 
culty in recovering for home use the balances that they had in New 
York. It was impossible for all to liquidate at the same time success- 
fully and get the cash; and so we had the sharp periods of monetary 
famine, of which 1907 was perhaps the most acute . . .” Dr. 
Miller went on to point out that today, owing to the Federal Reserve 
system, flexibility had been provided in our banking system and thus 
country banks today can freely withdraw funds which they have 
invested in the New York call loan market. 
In the hearings on the amended Stabilization bill, Professor J. R. 
Commons stated (p. 436) : “The call loan market . . . is the most 
secure and liquid of all markets.” 
It should in conclusion be noted that the events of October- 
November, 1929, thoroughly demonstrated the safety and liquidity of 
call loans. 
(XI1) Respecting the economic functions of call loans, Dr. W. R. 
Burgess in the Stabilization hearings (p. 1007) stated: “While the 
stock exchange money market represents in a narrow sense specu- 
ation. vou must remember that on the other hand it represents the