642 
APPENDIX 
development of this sort; and (2) both London and New York have 
specialized and concentrated financial districts in which a decentralized 
security handling system would “work” tolerably well, while it could 
not prove equally satisfactory in Paris or Berlin, where financial 
houses are to a greater extent scattered throughout the city. 
The Security Centralization Committee of the New York Stock 
Exchange, although conscious of the theoretical (and perhaps in New 
York the ultimately practical) value of handling securities by the 
check-and-deposit system of the Bank des Berliner Kassen-Vereins, 
decided that before this superior practice could be effectually inaugu- 
rated in New York, it would first be necessary to centralize the 
security delivery system under the New York Stock Exchange. Ac- 
cordingly, in 1928 the Exchange authorized the establishment of a 
Central Security Delivery Department, and the Stock Clearing Cor- 
poration undertook to work out the details of its operation. A room 
in the basement of the Stock Exchange building near the corner of 
Wall and Broad Streets was accordingly remodeled, provided with 
windows and cages for receiving and delivering security tellers, and 
tables and racks inside for sorting out and temporarily filing the securi- 
ties to be delivered through the Department. The new delivery system 
was actually inaugurated April 18, 1929; at first deliveries of only 
a few large and active share issues were handled through it, with 
the idea of testing the new system practically before extending its 
scope widely to the security list. The economies and greater speed 
of settlement obtained by the new system quickly led to its increased 
amployvment with listed issues. 
(X1IIIb) Since, by rule of the New York Stock Exchange (Con- 
stitution, Article XXI) corporations cannot possess or exercise mem- 
bership in the Exchange, thesincorporated New York banks and trust 
companies cannot be members of the Stock Clearing Corporation on 
:he same basis as Stock Exchange members. Nevertheless, a consid- 
erable volume of security deliveries and payments is made daily be- 
tween the incorporated New York banking institutions and members 
of the New York Stock Exchange, in respect to which the Stock 
Clearing Corporation can effect the same savings as in the dealings 
hetween Exchange members. 
As a preliminary and experimental step in developing centralized 
delivery, the Stock Clearing Corporation during January, 1928, estab- 
lished facilities for centralizing security deliveries, and clearing and 
settling money payments therefor, in dealings between all Stock Ex- 
change members and two large New York trust companies. This 
service was of course on a voluntary basis. and was at first utilized