New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1899-11-19
WALL STREETS LENDERS.
THE MONEY CROWD" AND THEIR IN
FLUENCE on CHANGE.
HOWARD p. FROTHINdHAM. WHO NEGo-
TTATEs THE BIGGEST LOANS-HIS
LIBERALITY IN NEW-JERsEY.


TTATEs THE BIGGEST LOANs-HIs
L1BERALITY IN NEw-JERsEY.
Although the investing public" have been
"out Of Wall Street" pretty steadfastly during
the last few months. that fact doesn't signify
that they have put Wall Street out Of their
thoughts Floating in their little coclIeshells
in the placid waters beyond the breakers OF
speculation. they have watched wave after wave
OF speculative advance roll in toward Wall
Streets strand. only 10 have Its progress
checked. with prohibition more potent than
any kings. by horrihc figure which they have
often rise and swell and tower on the
shore and which they know call money
rate. Last week there came q change when
a mighty wave Of confidence. impelled by the
power Of Washington swept in and over
whelmed call money rate bearing on its crest
tho barks OF "the public" and carrying them
far up the shore toward the market place.
Near the Broad-st end OF the Stock Ex
change floor gather daily a little group OF
brokers. known the money crowd" whose
dealings have more influence upon tho daily
course Of the market than have the operations
Of any other group The business Of the Stock
Exchange is transacted almost wholly bor-
rowed capital. A broker receives an order to
stock selling at or near par The customer de-
posts with the broker a cash margin" Of 500
or $1,000. on which the broker acting a
banker allows him interest at per cent a year.
The broker ecItes the buying order. paying
for the one hundred shares of stock with $10
900, which ne has borrowed from some fnan-
cial institution on depositng with that institu
tiCn as collateral security stocks or bonds the
market value Of which aggregates at least %
per cent more than the sum borrowed, and the
customer is debited with interest at per cent
on the $4,000 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 capt.
tai which he requires, the amount of which
varies from day to day as business 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 per cent for many weeks. but the call
money rate which a year ago ruled at 2 per
cent. now rarely falls below & per cent, and has
several times within the last six or eight weeks
shot up as high 80 or even 10 per cent.
LENDING MONEY ON CALL AND TIME
The great bulk Of the lending of money on
call is done by the banks and trust companies;
also the big life insurance companies often
appear in the market as large lenders do
sometimes certain important Stock Exchange
houses when a money squeeze which would
depress the values Of their special stocks is
impending. The foreign banking houses also
often lend large amounts on call Funds OF
out Of town hanks. too. are loaned here in
large volume. through their New-York CORE
sTondent banks, but almost wholly on time
The banks get their returns from the Clearing
House by about 1O4j o'clock and are then
able 10 tell how much money they will be able
10 loan out for the day, and having ascer-
tained this. send instructions 10 their brokers
on the Exchange 10 loan that sum on call
sometimes themselves fixing the rate and at
other times letting the money go at the market
rate. In an active market much
S30Oc0O0O In call loans has been placed In a
day by a single broker. who, however. gets no
commission this business. his profit coming
from the placing Of time loans, on which the
borrower pays him a commission ranging from
one-thirty second Of ! per cent upward The
call money is loaned to a particular house as a
matter Of good will and accommodation. the
presumption being that the borrower thus &C.