123. Loan Envelopes

We have seen something of the duties of a New York loan clerk with reference to the note and the collateral, and now we will turn our attention to the other requisites and records in connection with loans. The brokers in Wall Street usually have their own loan envelopes which are all made along very much the same lines. The envelopes are heavy manila paper about twelve inches long by five inches wide, with the opening at the side. Banks also have a stock of their own. All banks outside the Wall Street district who loan on collateral have their own envelopes. It is usual to have the demand loan envelopes printed in black ink and the time, in red.

Figure 99. Demand Loan Card.

The note, collaterals and all subsequent correspondence are put inside the envelope and the flap secured either with a pin or a rubber band. The stocks are laid one on top of the other and the whole pile folded together one third the way from each end of the certificates. It is very unfortunate that this method of filing loans is so general. Large blocks of stock certificates are always unpleasant to handle, owing to their tendency to curl up.

124. Loan Card

When a loan is made, some ledger record should be set up, showing the name of the borrower, the date of the loan, and the amount, together with a list of the collaterals; and if a time loan, the due date should be made prominent.

Some form of loose-leaf record is always more acceptable for a loan record than a bound book. Most banks have loan cards or slips ruled somewhat in the form shown in Figure 99 on page 202. The rate, or quoted value, and the market value are always written in pencil so that they may be erased and the correct market value inserted. This is very important in a declining market. When a portion of the collateral is withdrawn from the loan and delivered to the borrower, it is ruled off the slip. If a new security is substituted it is added at the bottom of the list. If only a part of one kind of collateral is withdrawn, the old number is ruled out and the new amount entered above the old record. It is a very good plan to draw a line under the last of the original list of securities so that they may be identified or referred to at any time. In some banks, the cards are made a little larger than the figure, and the interest record shown thereon. The Library Bureau collateral card is shown in Figure 100 on page 204. A loan card which would obviate the necessity of ruling off items is shown in Figure 101 on page 205.

Collaterals Held By Traders Bank, New York City Deposited by...............................................................................................................................................................................................................

Figure 100. Collateral Card.

Figure 101. Demand Loan Card.

When a loan is made, the securities are listed in the proper column and the number of shares entered in ink on the top line of the balance column. A line is drawn under the last security on the list when the loan is made. If a portion of a security is withdrawn, the proper record is made in the "delivered" and "balance" columns, and a new extension of market value made. By taking all the securities above the line drawn when the loan is made, and the number of shares noted first in the balance column, it is possible to determine by what the original loan was secured. If the changes in any one security are so frequent as to fill up the space, the remaining balance may be charged out and a new line added below. A little check mark made in the column provided, indicates that there is none of the security indicated on that line, although it may appear again below the original list if reopened.