New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1899-11-19

ket 70 employ their resources in call loans yield
ing them exceedingly liberal returns.
LOCKING UP PART OF THE FUNDS.
While the call money rate nominally follows
the natural law Of supply and demand, 1t can
readily be seen that great profit might accrue to
big bear operators through assisting nature
by supplying an artificial stimulus to the call
money rate the effect being 70 force down the
prices of securities 10 levels at which the bears
could cover their short contracts with rich prof
it's TO themselves. Such assistance II was
openly charged about two months ago was De-
ing openly resorted to- the method employed De
ing for a firm 10 contract 10 borrow a certain
sum on ca-such sum thereupon being with
drawn from further offering for the day, its
withdrawal decreasing the days total available
supply to so much-and then, instead OF taking
the money for actual use, merely paying the
days interest on 1t; In other words, locking up
part Of the funds, the effect being rapidly IN
creaslng loaning rate for the rest, as well as
drop in the market. An unofficial inquiry into
this matter was instituted by the Governing
Committee OF the Stock Exchange, the outcome
being the adoption by that body OF the follow
ing regulation:
Resolved When a member has contracted to
borrow money on collateral, the simple payment
8 o'clock p. m. without actually effectng prop
erly endeavorng TO effect a loan. may be held 10
mental to the interest and welfare Of the Ex-
change and the offending member may be pro:
ceeded against under Section g. Article XVII, OF
the constitution.
Under this section the offending member may
be suspended or expelled from the Exchange,
upon conviction.
The rates exacted for call loans vary with
the collateral offered. and II is declared by loan
brokers that the loans at 30, 81 and 40 per cent,
which have caused so much comment. were
made on collateral consisting largely of IN
dustrials" II being possible at any time To
cure a call loan at about per cent If the col
lateral offered was mainly standard railway
preference shares or the stock Of established
'Industrials" like Sugar Consolidated Gas
Brooklyn Union Gas. As rule the collateral
offered Is mixed" consisting Of dividend pay
ing and non -dividend-paying railroad stocks
and industrials; and So per cent Of the total
market value is advanced by the lending insti-
tuition. When the market goes down. the values
Of the securities pledged against a certain loan
shrink with the rest and the bank calls for
enough additional collateral 10 keep the proper
ton Of loan TO market value a ~ 10 100 else
Il demands that its loan be reduced the Dor
rover finding ii necessary often 10 sell part OF
his securities in order TO protect the rest. As
call money becomes scarcer, too. the banks
scrutiniZe more and more closely the collateral
deposited with them. often insisting that GER
tain securities. especially ndustrials. SHAH De
replaced by others OF better repute in the mar
ket.
4 SPECIALIST ON LOANS.
While there are several members OF the STOCK
Exchange who loan money on call or time IN
the money crowd" by far the most consplcu-
Gus and well known Of their number Is Howard
p Frothingham. a picturesque personality OF
the financial world. He is specialist IN the
negotiation OF time and call loans, and the only
member OF the Exchange who confines his opera
lions solely to that ield placing as the trusted
agent Of many banks and trust companies mill
ions OF their moneys daily in loans. Rather
under the middle height. with head wnlcn the
strenuous life Of the Stock Exchange mas
thiuned OF much Of its natural covering anc
shrewd eyes peering out through glasses. and
hIsplaving in manner and habit OF speech kind |
illness and alertnese which make for popularity |
he shows himself that which he Is widely known |
IN be a Wall Street hustler. Practically all MS
life has been spent in the Street. for he went
TO work IN May, 1874. when he was lad OF
twelve as office boy for the old time Arm OF
Zerega Berry Co. He had two ambitions
then--,o obtain q seat Oh the New York Stock
Exchange and 20 gain a fortune-and both OF
these aims ne realized years ago. AT twenty ne
started In business on his own account ana
since January 1891, he has been a member of
the Stock Exchange over in New Jersey where
he lives Mr. rockingham has a reputation
akin 10 that Of Jones OF Bnghamton, for he TOO
pays the freight" In 1890 he was elected
Mayor OF Mount Arlington on Lake Hopatcong,
and every second year since then he mas peSp