The daily morning journal and courier. [volume] (New Haven, Conn.) 1894-1907, 1899-11-27
WALL STREETS LENDERS.
The "Money Crowd" and Their Inf,

eilce OH CHdIlSe.
Although "the investing public" llav
been "out of Wall street" pretty stead
fasiiy during the last few months, tina
fact oDesn't signify that they have pu
Wall street out OF their thoughts
Floating in their little cockleshells II
the placid waters beyond the breakers
of speculation, they have watched wave
| after wave of speculative advance ro
in toward Wall streets strand, only tt
have its progress checked with pro-
hibition more potent than any king s.
by a horrific figure which they have as
often seen rise and swell and tower on
the shore and which they know as call
money rate. Last week there came a
change, when mighty wave Of conf
dence, impelled by the power of Wash
ington swept in and overwhelmed call
| money rate, bearing on its crest the
banks of 1.-THE public" and carrying
them far up the shore toward the mar
ket place.
Near the Broad street end of the
Stock Exchange floor gather daily lit
tie group of brokers, known as the
money crowd" whose dealings have
more influence upon the daily course of
the market than have the operations Of
any other group. The business of the
Stock Exchange is transacted almost
wholly on borrowed capital. A broker
receives an order to buy on margin, say,
one hundred shares of stock selling at
or near par. The customer deposits
with the broker a cash "margin'' Of
five hundred or one thousand dollars, on
which the broker, acting as banker,
allows him interest at six per cent. a
year. The broker executes the buying
order, paying for the one hundred
shares of stock with ten thousand dol
lars, which he has borrowed from some
financial institution on depositing with
that institution as collateral security
stocks or bonds the market value Of
which aggregate at least twenty-five
per cent. more than the sum borrowed,
and the customer Is debited with in
terest at six per cent. on the ten thou
sand dollars so borrowed whatever be
the rate at which the broker may be
able to secure the loan. One-half or
more of a brokers' working capital is
usually borrowed on time, ordinarily for
four or six months: but the additional
capital which he requires, the amount
of which varies from day to day as bus
mess Is active or dull, he obtains
through "call loans" renewed from
day to day and terminable at any time
The time money rate has been constant
at about six per cent. for many weeks
but the call money rate, which a year
ago ruled at two per cent, now rarely
falls below six per cent, and has seve-
tt,,.a hi, -. ~
weeks shot up as high as thirty-five or
even forty per cent.
LENDING MONEY ON CALL AND
TIME.
The great bulk of the lending of mon
ey on call is done by the banks and
trust companies also the big life insur-
ance companies often appear in the
market as large lenders, as do some
times certain important Stock Elk
change houses when money squeeze
which would depress the values of their
special stocks is impending. The for
eign banking houses also often lend
large amounts on call. Funds of out of
town banks, too, are loaned here in
large volume, through their New York
banks, but almost wholly
on time. The banks get their returns
from the Clearing House. by about 1O:45
o'clock and are then able to tell how
much money they will be able to loan
out for the day, and, having ascer-
tanned this, send instructions to their
brokers' on the Exchange to loan that
sum on call, sometimes themselves fix |
ng the rate and at other times letting |
he money go at the market rate. In |
IN active. market as much as thirty |
million dollars in call loans has been |
placed in day by single broker, who, |
however, gets no commission on this |
business, his profit coming from the |
placing of time loans, on which the
pays him commission rang
ng from ne-thirty-second of one per |
emit upward. The call money Is loaned |
o particular house as a matter of
rood will and accommodation, the pre-
being that the borrower thus
accommodated by the loan broker will
leal with him when effecting a time
pan. Brokerage houses occasionally
'orrow call money directly from the
'anks but as a rule they get it from
he brokers' of the money crowd" II
he supply of available funds on any
ay happen to be scanty one, the
roker who has waited until late in the
fternoon, thinking that after all he
nay be able to get along without a
pan and finally finding that he must
ave it, sees the rate go leaping up
Jard and closes his bargain at an ex-
remedy high figure. The stringency
ecoming known, other institutions
ush their money into the Exchange, [
nd tho rate becomes easier. No Off
ial quotations for money are sent out
ON the Exchange but the fluctuations
re an open secret, the successive fig
res appearing at frequent intervals on
he brokers' "tickers." The needs of a 4
usiness constantly expanding in all ,
arts of the country, the continual ac-
Emulation of cash in the national \
easury, and the shipments of funds to
he west and south for moving the
ops are some of the reasons for the
radual diminution in the cash reserves
the local banks and the contraction
the volume of money available for I
aiming on call with the concurrent
Sc in the call loan rate, which in turn Z
as depressed the speculative market :
Y making it a too costly undertaking
carry large lines of stocks and has