Evening star., 1933-10-14
EXCHANGE PLANS
AROUSE INTEREST
Details of Central Clearing
System for Handling Sc
curities Awaited.
Ipecia, Dispatch to The Star.

Special Dispatch to The Star.
NEW YORK, October 14-The rank
and file Of Wall street are much inter-
ested in pending changes in the meth
ods of handling securities. Specifically
they want to know just how soon the
New York Stock Exchange plans to
move into the building purchased few
days ago from Lee, Higginson & Co.,
and how soon a central clearing sys-
tenn, built along the plan Of the Berlin
technique, will be established.
The clearing corporation. since the
time of its organization, May IT, 1892
which was the hundredth anniversary
of the signing OF the original brokers
agreement-has experienced continual
evolutionary process of growth. Up
until the war the delivery Of securities
in Wall street was attended with much
confusion. A semblance of order came
on April 26, 1920, with the establish
ment of the stock clearing corporation
and the first days settlement through
the day branch, thus replacing the
original stock clearing house.
Cross Carrying Ended.
Three years later, April 25. 1923, the
system of assignable stock transfer re-
ceipts by the stock clearing corpora
ton was started. facilitating the use
of securities in transfer as collateral
for loans. On January 27, 1928, the
clearing corporation inaugurated plan
for central delivery Of securities be-
tween members of the stock clearing
corporation and the Bankers Trust Co.
and the Guaranty Trust Co. at the day
branch of the clearing corporation.
This central security delivery plan
worked 80 well, eliminating so much
cross-carrying of securities from one
house to another and checking security
robberies, that on April 18, 1929, the
stock clearing corporation started a
central delivery service between men,
ber and member in limited number
Of active securities. BY May 20 Of that
and by April "a, 1890, all securities
were so cleared.
The clearances of stocks. transfer
able receipts. loans between members
and their banks, bills between commits
sion brokers and central delivery sys-
TEN for stocks proved so successful that
the stock clearing corporation on June
g. 1890 began to clear convertible bonds
through the night clearing branch by
machine clearing system, after trying
the plan in a limited way since No.
vember 25, 1929.
Follows Berlin Plan.
Briefly this is the background Of the
present proposal to establish a clearing
Of securities based on the Berlin Stock
Exchange plan, which is viewed as
efficient and economical. Berlin keeps
all securities bought and sold on its
exchange in special house Of deposit
or clearance. the Bank Das Berliner
Kassen Verein. Unless buyers demand
actual delivery of the securities pur-
chased, they merely get receipts stating
that they have bought SO many shares
Of such company On the books Of
the security clearing deposit house all
transfers in ownership take place. Then
the securities are earmarked or g.,
aside for the purchaser account. 7 !,
obviates the transfer and delivery ,
securities and all the attendant risks
Naturally when such a department
| the exchange here starts function
there will be much less need for
sonnel in the purchase and sales
partments of stock exchange hou
Runners and messengers will not
needed in the number now used
fore such plan is put into effect
exchange will see to it that employe;
displaced are found other positions.
Copyright. 1881