It has been suggested that some of these money brokers are in reality agents of the banks--that, in short, they are the middlemen between the banks and those who want to borrow on the Stock Exchange, just as the bill broker is the middleman between the banks and those persons who possess bills. The bill broker deposits the bills he has discounted for his customers as security against a loan from the banker, and the money broker deposits the stocks and shares against which he has advanced to members of the Stock Exchange as security for a loan from the banker to himself. His profit, therefore, like that of the bill broker, would be the difference between the rate at which he borrows from the banker and the rate at which he lends in the House. When large sums are advanced in this manner the prices of stocks and shares are forced up to fictitious figures in the hope that the public will come in and buy. Yet the Stock Exchange Committee preaches about the iniquities of the outside broker! Far be it from me to defend the possibly questionable methods of the latter; but, to an unbiased observer, it sounds somewhat like the pot calling the kettle black. Huge sums of money are advanced every fortnight by the banks to the money brokers and jobbers, principally against sold stocks and shares, which are awaiting the arrival of _bonâ fide_ investors. The banks, of course, require a good margin in order to cover themselves against loss through any possible depreciation in the hypothecated securities, and when the settlement or day of reckoning arrives, fresh loans are made, or old advances are renewed, and the securities carried over to the end of the account. A high rate of interest naturally makes "carrying over" from account to account a very expensive operation, whilst an abnormally high rate renders the process prohibitive. When, therefore, the Bank rate is high and money is dear, a check is immediately given to speculation on the Stock Exchange, because those persons who have bought securities for a rise prefer to sell at a loss before the settlement rather than pay excessive contango rates. It follows, then, that dear money greatly reduces the dimensions of the accounts open for the rise. The banks, too, often become alarmed by the magnitude of the account, and having demands upon them for capital elsewhere, they grow nervous and lend less freely, at greatly enhanced rates, and then jobbers and money brokers have to refuse a large number of applicants. The result may be either a fall in the securities dealt in by a particular market or a general depression throughout the House. Then the "bears" come in and buy, take their profits, and are jubilant.