financial "haircut" (1955)

[Benjamin Zimmer]

Safire's latest column is on "haircut" in the financial sense:

http://www.nytimes.com/2009/01/11/magazine/11wwln-safire-t.html

Since he mentions my research on the term, I wanted to share the cites I
found from the '50s:

1955 J. Sinclair Armstrong [SEC chairman], Dallas Security Dealers
Association, 1 Nov. 5 For another example, the Commission recently revised
the 'net capital' rules applicable to brokers and dealers so as to provide
more stringent standards in valuing the broker's assets for purposes of
complying with the capital ratios specified in the statute. These are the
so-called 'haircut' provisions, which now call for a 30% deduction from
market value of common stock commitments or inventory in computing the
broker-dealer's net capital.
http://www.sec.gov/news/speech/1955/110155armstrong.pdf

1955 Andrew Downey Orrick [SEC commissioner], Salt Lake City, Utah 30 Nov. 5
The net capital rule applicable to broker-dealers has been tightened to
provide that in computing net capital a 30% deduction from the market value
of common stock commitments or inventory must be made. This so-called
"haircut" of 30%, as compared with the former 10% deduction, establishes a
more stringent standard for broker-dealer financial responsibility.
http://www.sec.gov/news/speech/1955/113055orrick.pdf
[Also given in this later address:
http://www.sec.gov/news/speech/1955/120555orrick.pdf]

1957 J. Sinclair Armstrong, Testimony before the Committee on Interstate and
Foreign Commerce 27 Feb. 112 We have the so-called haircut which was
strengthened, which reduces the admissibility for valuation purposes under
the net capital rule of stock by 30 percent of the market value.

1957 J. Sinclair Armstrong, Testimony before the Committee on Interstate and
Foreign Commerce 27 Feb. 113 We are not presently considering recommending
to the Congress a change in the net capital provisions of the statute
because, under the rule, particularly with the haircut which we supply, we
have pretty good control over it.

1958 Allen D. Choka _An Introduction to Securities Regulation_ 165 The "
haircut" is an arbitrary discount from the value of the broker/dealer's
securities to allow for shrinkage in market value.
http://books.google.com/books?id=wtsMAAAAIAAJ


--Ben Zimmer

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