The sun., 1919-07-12
DAILY SETTLEMENT
WILDE CONTINUED
Governors Of Stock Exchange
Decide Other System at
Present Impossible.
STREET EXPLAINS REASON
Fortnightly Basis for Term
Settlement Would Mean
Ten Working Days.

In casting about for ways and means
to tighten tho tremendous load that
million share days in stocks have placed
on the machinery Of the New York Stock
Exchange, it's governors have invests
gated all of the other systems and have
come TO tho conclusion that any but
daily settlements are impossible under
present conditions
Samuel f. STREET., as chairman Of the
Clearing House Committee, and also as
chairman of special committee Of the
exchange to investigate and deal with
the perplexing problem, yesterday ex-
planned why settlements cannot be
changed from daily to fortnightly, as is
the rule In England. He declared that
the present system with certain altera-
tons and improvements would be re-
tanned. Mr.. STREET.. who spoke for the
exchange. said: THE question of q term
settlement in the New York market to-
day, Its pros, cons and merits comes
down to one practical fact-its impos-
sibility under present conditions. The
New York banks and members of the
New York Stock Exchange on the pres
emit average business of a daily settle
ment are having their resources strained
to the utmost to take care Of the deliver
ing Of and the paying for stocks traded
in. The Street is just about put to the
limit Of its possibilities of handling the
paying for and the receiving Of securi-
ties on the next day on the basis of a
daily settlement Say we have 1.7b0.0On
share day. II q Arm can got its last
sheet to the clearing house by . o'clock
that night It IL doing we'll and It Is all
that the banks can do to get II cleaned
UP that night.
Would Mean Ten Business Days.
IF you had q term settlement on a
tortnightly basis you would have ten
business days. At the end of the tenth
day you would have to make your settle
menta 1t would not be ten times the
amount Of one days settlements, but 1t
would be three times that amount That
statement Is made by actual figures that
I secured in London. Paris, Berlin, VI
emma and by taking the sheets of a large
number of houses OF the New York Stock
Exchange at the clearing house and car
rying out those sheets for several periods
Of two weeks each. The figures from all
those centres show that there would be
practically three times as much to settle
on pay day or settlement day II we had
a term settlement, as there II on one
days business now on q daily settlement
basis
consequently the Stock Exchange and
have proposed q plan which we consider
win 30 relieve the congestion of the banks
and in the Offices on q daily settlement
that we can handle a daily settlement
economically and practically and. as has
been stated. will relieve the banks OF
about IS per cent OF their certihoations
to brokers'"
The plan. which has been explained in
detail, will be put into operation when
Nha Na hA O n o.
building shall be completed. which is ex-
pected to be In November Booths for
large banks will be established In that
building. Representatives will be sent
at IL 1880 P. NJ. daily with loans to be
paid Off and there meet representatives
Of banks to whom the loan Is due. The
deal will be concluded then and there
The Stock Exchange corporation will act
meIely as an intermediary in bringing
the two together. Thus. 1t Is expected. a
great amount Of certification of checks
now necessary will be eliminated.
To Reorganixe Delivery System.
Tho delivery system OF stocks also will
60 through a reorganization and several
steps In the operation eliminated. Mr..
STREET. said that the delivery of. say. 500
shares of stock now requires nine or ten
separate operations. Their delivery
to the fact that the deliverers must
stand in line to get checks certified. The
new plan is expected to eliminate several
steps and reduce the delivery to hve to
eight minutes.
IF these present plans are success
full" said Mr.. STREET.. and II we do find
ourselves able to relieve the present
dificulties in the situation. the New
York Stock Exchange will be willing to
discuss the problem OF term settlements.
I am not prepared to discuss 1t now and
say whether or not they are desirable.
but do deprecate as does the Stock
Exchange. and I can speak for all the
members, the discussion Of term set
tiement from the practical standpoint
now. when under present conditions II
- out Of the Question. We are prepar-
ing one of the biggest steps in the i'm
provement in business methods that has
been had in Stock Exchange circles
since the starting OF clearing house and
We feel very strongly that It Is unfortu-
nate to attempt something further until
we have proved this a success. It Is n
very big step and involves a great many
problems We think we have solved
thom, but nobody can tell until II Is in
operation. When that IL in operation
and successful. II the banking COM
munity want to discuss fortnightly set
Elements that 10 another subject. We
don't feel that It Is in any way desirable
TO agitate at the present time this mat
ter, because It can resolve itself into
nothing. Any one familiar with the
Stock Exchange will agree with me that
we cannot handle three times the vol
ume that We have on any one day, and
that the statement that 1t would be
practically three times in volume, with
fortnightly settlements, IL not guess
work. but has been proved In every
sense of the word
Pesos Go Down.