New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-10-17
WALL St. STIRRED
BY BANKS LETTER
Brings Up Question of
Recognition of New St.
Curb Prices.

In view of the refusal OF Stock FIX
change authorities to recognize the
prices Of listed securities quoted on the
New st. curb market, members OF the
exchange yesterday were stirred over
the publication of letter sent out by
the Corn Exchange Bank to its Gus
toners, which in effect was considered
by many to be recognition OF the
unofficial prices.
The letter referred to call loans
based on the closing prices OF the STOCK
Exchange on July 80. held on mini
mum margin of 20 per cent. When ITS
contents were brought to the attention
of the governing committee two mem
bers of that body called on Mr.. Frew
and later reported him as saying that
the letter was written with no desire to
add to prevalent annoyances. That part
of the letter which brought forth this
explanation reads:
"The question has arisen whether II
is the duty of the bank management to
continue TO recognize the closing quo
tation Of that date Gully 3Ol as the
best known value of the securities held
as collateral in our loans, or whether
we should take cognizance OF sales
made on the curb and ask for margins
based on those transactions. We have
given the matter much thought, and
have decided TO place that situation be-
fore each party with which we have
loan.
1--WE desire our loans to be properly
margined, and according to the closing
prices of July 80 yours seem TO have
sufficient margin. If, however, you be
lieve there have been sales Of the Sc
curities of the companies whose stock
you have with us, large enough TO war
rant the price of those sales TO be rec
ognized as the correct price of the
stock, and those sales have reduced
your margin. we would appreciate II II
you would call and discuss the matter
with us"
Mr.. Frew said that out of the letters
sent out he had already heard from
one hundred, and that each one had
construed his letter as he had hoped.
In no case, he added, had the bank de
manded collateral, nor did it intend to
do so. a.
availed itself of its right, after ten
weeks of war, to remind its customers
that if il were quite convenient and
agreeable additional margin would be
acceptable where the customer deemed
il necessary"
Despite the assurances of Mr.. Frew,
one governor of the exchange thought
that the letter Of the Corn Exchange
Bank should be taken up with the
Clearing House Committee, as this IN
stitution is one Of the important mem
bers of the Clearing House Association.
He was quoted as saying:
"If such a letter were sent to me
should 90 to the president and tell him
to call the loan if he wanted TO and
sell out the collateral. | should refuse
point blank to deposit more collateral,
no matter how much | had. | should
remind the bank president that every
thing had steadied down, that all mem
bers of the Stock Exchange had collabo-
rated heartily in measures TO restore
normal conditions, and / should tell
him that if he wanted to start the con-
fagration all over again such was his
privilege"
Following the announcement that the
First National Bank had reduced its
call loan rate from 3 per cent, II became
known yesterday that most of the i'm
portant Wall Street institutions, in
GLIDING the Corn Exchange Bank, which
have held to this rate, are also asking
the lower figure. Kuhn, Loeb & Co.,
however, reduced their rate to 6 per
cent, and reported large demand for
funds. In some instances where banks
are still asking per cent IL was ex-
planned that this was done TO cause
shifting in their loans. The bid rate
for various maturities of time money
continues at Z per cent.