Cyclopedia of Commerce, Accountancy, Business Administration, v. 05 (of 10)

by American School of Correspondence

LARGE CAPITAL REQUIRED

2. It will be seen that in a multitude of transactions of this character, a very large amount of money is required by the broker, to carry on his business successfully. As very few of them have the amount of capital necessary, they resort to bank loans. Banks are very willing to loan money with listed stocks as collateral security, and frequently do so at favorable rates for the broker. This rate is determined by the condition of the money market, but is invariably less than the rate of interest charged to the client.