The regulation of brokers' loans

Marginal trading is made possivle by the borrowings of a brokers from costumers as well as from banks. The difference between a figure in a brokerage account standing to the credit of a costumer and one standing to the credit of a bank is a distinction without economic significance. Thus , if it is desiderable to regulate the one, it is equally desiderable to regulate the other. But a scheme which seeks to regulate succesfully the use of credit by speculators must recognize the fact that speculation performs an economic fuunction and that the notion of what constitutes a sufficient supply of credit must vary with time and conditions.