ABSTRACT
In order to alleviate the financial difficulties of the general business community the Government proclaimed a two-day extension of the Bank Holiday period. and on August 31 quickly passed the Postponement of Payment Act which postponed most commercial payments, including those involving stock exchange transactions for one month. a power which was later renewed for a further two months. Under the terms of the Royal proclamation stock exchange members were able to charge interest at Bank Rate where their principals took advantage of the moratorium and refused to make payments which were falling due.6 The problem remained however of firms holding securities on borrowed funds; brokers had loans from banks and other sources on behalf of clients who had bought stock and then carried it over in the usual way; jobbers of course depended largely on borrowed money to finance their holdings of stock. The London Stock Exchange quickly ascertained the extent of such borrowing. which came to £81 million (see Table below for details). The London Committee was also anxious to know the precise country position but the leading provincial markets declined to make such information available. claiming that the serious problem evident in London did not apply in their case.7 However. sometime later they were quite prepared to supply the relevant information when the Treasury requested a full statement as to the amount of loans outstanding so that they could assess what assistance could be offered to the stock exchanges. The total borrowing of the provincial exchanges came to nearly £11.0 million. The following are the detailed figures for Liverpool. Manchester. and London.8 This was not of course the entire loan position of the markets since large amounts of stocks and shares stood in the names of brokers and their clients who had taken in stock as a means of getting a good rate of interest.9
