It frequently happens that the borrower needs some of the collateral which the bank is holding in order to make delivery of the stock he has sold on the exchange. He is permitted to withdraw the stocks needed if he substitutes other securities of equal value and desirability. During the panic of May 9, 1901, there were eleven substitutions in one loan.1 The banks prefer to loan on mixed collateral rather than on one kind of stock or bond, for if they are compelled to sell the collateral they can get better returns on selling small lots of several securities than on a large block of one kind of security. The broker who wants to borrow $100,000 will be required to put up about $120,000 in perhaps five or seven kinds of stock. The best collateral are the stocks and bonds of standard railway companies. The stocks of some industrial companies are equally acceptable. Generally, however, banks will not make a loan on industrial collateral alone. Government bonds, of course, are the very highest class of collateral, requiring little or no margin, and the securities of most states and municipalities have very high rank as collateral.