CHAPTER III

The first effect of furnishing this means for establishing a restricted market was very encouraging. A very considerable amount of business began at once to be entered into. Many people with ready money, who felt that securities had fallen to bargain prices, appeared as purchasers and relieved the necessities of those who had been embarrassed by the war crisis. A little later, however, when the progress of the war took on a more discouraging aspect, this "Clearing House Market" fell to the arbitrary minimum of the closing prices with a large excess of selling as compared to buying orders, and the "New Street Market" grew in proportion. During the darkest days of depression the prices of a few leading stocks such as U. S. Steel and Amalgamated Copper dropped in the Street ten points or more below their July 30th closings, and business in the Clearing House almost ceased, but in the later Autumn, when the rapid rise in the volume of American exports began to foreshadow a readjustment in foreign exchange, the New Street prices rose again to the Clearing House level and a relatively small business in the "outlaw" market was transformed into a relatively large business conducted under the supervision of the Exchange.

It is an interesting detail, worth mentioning, that the ruling of the Committee quoted above, which establisheda market in the Clearing House, used the permissive word "may" in stating that orders to buy and sell might be sent to that institution. This was soon taken advantage of by a few individuals who proceeded to conduct private transactions among themselves. Their excuse was that if transactions were merely permitted in the Clearing House it became optional as to whether they should take place there or elsewhere. Within a few days thereafter the Committee amended the ruling by substituting the word "must" for the word "may." The great responsibility attached to promulgating rulings, which were to be the law during this critical period, is made more apparent when it is realized that the ill considered use of a single word might bring on unforeseen and perhaps dangerous consequences.

During the month of August a constantly increasing pressure from every conceivable direction was exerted to break down the dam with which the Committee was striving to hold back the natural flow of dealings in securities. By letter and by personal appearance before the Committee individuals, in and out of the Exchange, strove to induce them to countenance transactions at prices below the arbitrary level of the closing. In addition to this agitation among individuals and firms, restlessness began to show itself in some of the other Exchanges. At one time the Stock Exchange of a great neighboring city, which had permitted restricted dealings exactly similar to those carried on in New York, wished to have those dealings regularly quoted in the newspapers; at another time a movement developedon the Consolidated Stock Exchange to establish some kind of restricted public dealing on their floor. The Committee of Five were obliged to labor hard and assiduously to hold this pressure back and keep the dam intact, and its efforts were ably and loyally seconded by the Committee of the Bank Clearing House whose great influence was unremittingly exerted to prevent the danger of premature action of any kind.

On September 1st the Clearing House banks were anxious to determine what was the amount, measured in money, of securities sold in New York by Europe and not yet received. The object of obtaining this information was to know what demand would be made upon the loan market if, at any time, these securities should be shipped. At the suggestions of the bankers the Committee of Five summoned before them representatives of all the houses doing a foreign business and requested them to send answers, as promptly as possible, to the following two questions:

First:"Amount due Europe for securities received to date and not yet paid."Second:"Amount due Europe for securities already sold but not received from Europe."

First:"Amount due Europe for securities received to date and not yet paid."

Second:"Amount due Europe for securities already sold but not received from Europe."

On the following morning answers were handed in showing that the amount received and not yet paid for was $699,576.11, and that the amount due Europe on securities sold but not yet received was $18,236,614.15. The rapidity and accuracy with which this important information was obtained, without any publicity or disturbance of confidence, is interesting as showing theefficiency of the intimate coöperation between the banks and the Stock Exchange.

Among the many agencies for dealing in securities, whose activities were suddenly cut off on July 31st, the first in importance next to the Stock Exchanges themselves were the so-called bond houses. These firms, which included in their number many prominent private bankers, were dealers on a great scale in investment bonds, and when the thunderbolt of war struck they were carrying large lines of those bonds on borrowed money which, in the ordinary course of events, would have been placed among their numerous clients. When the crisis of early August had developed, all these houses (some of them not being members of the Stock Exchange) loyally coöperated in closing up the market, and abstained from negotiating their securities even in the most private manner. By the middle of August, however, a number of them began to show decided restlessness over the embargo upon their business. The cutting off of their accustomed income, while expenses continued as usual, was not what influenced them, for this hardship was shared by all Wall Street, but the enforced carrying of securities in bank loans at so critical a time when they felt that these securities might be disposed of became a grievance.

It was urged by many of them that the careful placing of these securities would be a great aid to the situation because every investor who made a purchase would facilitate the liquidation of their loans, ease the strain on the money market, and diminish the volumeof securities for sale. There was undoubtedly much to be said in favor of this view when looked at from the standpoint of the effect upon the bond houses themselves or upon the loan market, but there was another aspect of the question which was less reassuring. If these houses started, at this terribly critical time, to place their securities among their clients at declining prices, and if these prices became known, which they certainly would, no one could foretell what the consequences might be. Many large institutions, such as Insurance Companies and Savings Banks, had funds invested in bonds, and many money lenders held loans upon bonds as security; what would be the effect upon these interests if a declining market even in unlisted bonds should be publicly quoted?

Influenced by this grave uncertainty the Committee of Five resisted the pressure brought upon them by certain representatives of the bond dealers who raised this question first on the nineteenth of August. Several of these gentlemen represented important firms and institutions which were not members of the Exchange, and their freedom from any obligation to be controlled by the Committee created a situation which threatened to become strained. In all cases of this kind, where an independent outsider and the Committee could not come to an understanding, the practice had become established of appealing to the Clearing House Bankers to act as a court of last resort. The banks, with their power to call loans, exerted an influence which could reach every nook and corner of the business world, and, at the same time, their immense facilities for feelingthe financial pulse made them the best judges of what risks it was as yet safe to take. A series of meetings consequently took place between the Bank Clearing House Committee, the representatives of the bond houses, and the Committee of Five. At the first of these meetings the bank Presidents leaned very decidedly to the views of the Stock Exchange, and it was decided to postpone any consideration of a departure from the status quo for at least a fortnight.

The general situation remaining very critical all through August, no further steps were taken until September 8th. By that date a new factor had intruded itself into the situation. Certain corporate obligations were about to come due and the refunding of these obligations, whether in fresh issues of bonds or in short term notes, was going to make it necessary to withdraw the prohibition against placing investment securities upon the market. When this necessity became clear it was decided that some strict supervision and safeguarding of the sale of bonds and notes was necessary and the so-called "Committee of Seven," appointed by the bond dealers, were requested to formulate a plan for this purpose. This Committee of Seven consisted of members of the firms of: Brown Brothers & Co.; Guaranty Trust Co.; Harris, Forbes & Co.; Kissel, Kinnicutt & Co.; Wm. A. Read & Co.; Remick, Hodges & Co., and White, Weld & Co.

On September 9th, this Committee issued the following notice to bond dealers:

"Your Committee is pleased to report that New York City's financial needs have been taken care of satisfactorily, therebyconsiderably clearing the foreign exchange situation which existed when our communication of September 3d was sent out."The Committee is therefore of the opinion that the placing of securities owned by dealers with their private customers should be approved where the securities can be sold without disturbing the collateral loan situation and your Committee will be glad to continue to advise whenever such opportunities arise. Anything tending toward public quotations or the creating of the impression of an active or even semi-active market would unquestionably seriously disturb the loan situation."Transactions with bargain hunters should not be countenanced and your Committee will not approve the closing of transactions coming under this head. Prices should conform to the spirit which has prevailed during the past few weeks."Recognizing the support which banks and other lenders of money have given to dealers in securities, it should be the policy of such dealers when securities are sold to apply the proceeds toward the liquidation of loans."The Committee has considered questions of maturing obligations of cities and corporations and believes that the present situation does not warrant any attempt to issue long time bonds, but that such refunding should be accomplished through short time financing."The Clearing House Committee and the Stock Exchange Committee have expressed appreciation of the coöperation shown by the dealers in listed and unlisted securities and if all will endeavor to live up to the spirit of the policy thus far adhered to we are sure there will be no cause for criticisms on the part of the banks or the Stock Exchange Committee."Your Committee of Seven will continue to meet in the Directors' Room of the Chase National Bank daily, from 11a.m.to 12m., for advice on any cases where we can be of any assistance whatever."

"The Committee is therefore of the opinion that the placing of securities owned by dealers with their private customers should be approved where the securities can be sold without disturbing the collateral loan situation and your Committee will be glad to continue to advise whenever such opportunities arise. Anything tending toward public quotations or the creating of the impression of an active or even semi-active market would unquestionably seriously disturb the loan situation.

"Transactions with bargain hunters should not be countenanced and your Committee will not approve the closing of transactions coming under this head. Prices should conform to the spirit which has prevailed during the past few weeks.

"Recognizing the support which banks and other lenders of money have given to dealers in securities, it should be the policy of such dealers when securities are sold to apply the proceeds toward the liquidation of loans.

"The Committee has considered questions of maturing obligations of cities and corporations and believes that the present situation does not warrant any attempt to issue long time bonds, but that such refunding should be accomplished through short time financing.

"The Clearing House Committee and the Stock Exchange Committee have expressed appreciation of the coöperation shown by the dealers in listed and unlisted securities and if all will endeavor to live up to the spirit of the policy thus far adhered to we are sure there will be no cause for criticisms on the part of the banks or the Stock Exchange Committee.

"Your Committee of Seven will continue to meet in the Directors' Room of the Chase National Bank daily, from 11a.m.to 12m., for advice on any cases where we can be of any assistance whatever."

The practical plan adopted was as follows:

Bond houses having securities of their own for sale could place them with their clients at prices approved by the Committee of Seven. All purchasers and sellers of bonds, acting as brokers only, were required to file their orders with the Committee of Seven when dealing in unlistedbonds, and with the Stock Exchange Clearing House when dealing in listed bonds, and these two agencies were empowered to determine minimum prices below which sales could not be made.

It will be seen that a very important step in the direction of relaxation of restraints was here taken. Not only was the prohibition of all dealings which had marked the beginning of the crisis withdrawn, but prices below the closing sales of July 30th were to be permitted subject to the supervision of a Committee.

As has already been stated, the Committee on Clearing House had their hands full from the time the Exchange closed, first with bringing about the settlement of the contracts of July 30th, and secondly with carrying on the business of making new contracts for members wishing to trade in securities at or above the closing prices. It was impossible, therefore, for the members of that Committee to give personal attention to the difficult problem of determining the prices below which listed bonds should not be sold. To meet this difficulty it was decided that a small additional Committee of men known to be thoroughly familiar with the bond business should be organized, and that it should be their duty to control the liquidation of listed bonds.

The carrying out of this plan at first met with a technical obstacle. The power to appoint a Special Committee rested exclusively with the Governing Committee of the Exchange; in order to secure action a special meeting of that body would have to be called; in the early weeks of September sentiment was still in socritical a state and every act of the Exchange was so keenly watched that it was feared the holding of an extraordinary meeting might start rumors and cause alarm. In view of these considerations the Committee of Five hit upon the makeshift of inviting three members of the Governing Committee, who possessed the desired qualifications, to volunteer their services as an advisory body in the matter of fixing prices for listed bonds. The three members selected were Messrs. C. M. Newcombe, Vice President of the Exchange, W. H. Remick, and W. D. Wood.

On the 19th of September these three gentlemen cheerfully undertook the difficult and onerous task urged upon them, and for three months they abandoned their own private interests and devoted their entire time to it. Owing to the intelligent and judicious manner in which they handled the delicate problem of conducting a liquidation in listed bonds that should at once be effective and yet not lead to demoralization, they placed themselves among the foremost of those to whom the financial community owes a debt of gratitude.

By the latter part of September methods, as described above, had been found for facilitating a restricted liquidation of listed stocks, and of listed and unlisted bonds. Nothing, however, had been done to make an outlet for unlisted stocks. The "Curb" market and certain prominent unaffiliated houses dealing in these securities had loyally played their part in suspending dealings, but symptoms began to show themselves of possible revolt, and the Committee of Five set to workto find a safety valve for this department also. The device of a supervisory Committee had proven so efficacious in other directions, that it was naturally turned to in this instance. The circumstances differed, however, in one particular. The bond dealers had spontaneously created for themselves the very efficient Committee of Seven who took their affairs in hand, but the interests involved in unlisted stocks did not show the same solidarity, and it was necessary for the Committee of Five to take a hand in initiating action.

With this end in view they consulted Mr. Herbert B. Smithers, of the firm of F. S. Smithers & Co., concerning the feasibility of having a committee formed to pass upon and control a resumption of dealings in unlisted stocks. Mr. Smithers was singled out for the reason that he was a member of the Stock Exchange whose firm was among the most prominent dealers in these securities, and the prompt and energetic way in which he undertook the task proposed to him soon convinced the Committee that they had not erred in resorting to him. He set about organizing a Committee at once and on September 24th he appeared before the Committee of Five accompanied by Messrs. A. C. Gwynne, F. H. Hatch, A. H. Lockett, and E. K. McCormick. These gentlemen announced that they were willing to act, with Mr. Smithers as their Chairman, and a plan for the control of the market in unlisted stocks was agreed upon.

In order to clothe this Committee (which included two Stock Exchange members, two representatives of prominent outside dealers, and the President of theCurb Association) with authority, the Committee of Five directed members of the Exchange to submit proposed dealings in unlisted stocks to them and abide by their rulings. The Stock Exchange Committee could, of course, only control its own members, but it being a fact that a very large part of the unlisted business emanated from Stock Exchange houses, it was probable that their action would determine that of unattached dealers. This expectation was, in the main, borne out, and business in unlisted stocks began to be carried on actively under the jurisdiction above described.

It is necessary to record, however, in the interest of preserving a correct picture of the happenings of this momentous time, that the smooth and gratifying operation of the various other Committees, which sprang into being to handle the numerous problems presented, was not entirely repeated in this case.

The conditions surrounding unlisted stocks seemed on the surface to be identical with those pertaining to unlisted bonds. In both cases a business that was partly in the hands of Stock Exchange members and partly in those of outside concerns was to be presided over by a mixed Committee representing both interests. In the case of the Bond Committee of Seven this supervision was accepted and cheerfully lived up to by practically all concerned. A different situation soon developed in unlisted stocks. Almost immediately certain individuals in the business began to assert that the unlisted Committee was a self appointed body which did not represent the people most concerned, and that being themselves dealers in the properties the trades in which were undertheir supervision, these gentlemen could not be trusted to act fairly in making their rulings. After much preliminary growling which vented itself in interviews with the Committee of Five, this antagonistic sentiment crystallized into a written protest.

On October 1st, the following statement was presented to the Committee of Five.

"Gentlemen:"Owing to a general feeling of dissatisfaction amongst members and non-members of the New York Stock Exchange resulting from the formation of a Committee of Five to supervise dealings in Unlisted Securities, we, the undersigned, desire to suggest the following recommendations for your consideration:"First: The personnel of the Committee be changed to the effect that same be composed of parties not identified as dealers."Second: That in stocks which have an open or active market, transactions may be made without restriction or necessity of report to the Committee, when at or above the closing prices of July 30, 1914."Third: That where securities have not had an active or open market the bid prices as published in theChronicleof August 1st, be accepted as the closing prices."Fourth: That in the case of securities where the Committee may deem it possible to trade at prices below those prevailing on July 30th, they establish minimum prices good for as long a time as the Committee deems practical, and that a list of these prices be furnished to those making application for same.""We think that if the above recommendations are put into force, it will do away with the criticism which has been made as to the Committee as at present constituted, and by so doing increase the efficiency of this Committee on Unlisted Securities, by securing thorough and hearty coöperation on the part of all brokers and dealers in these issues."

"Gentlemen:

"Owing to a general feeling of dissatisfaction amongst members and non-members of the New York Stock Exchange resulting from the formation of a Committee of Five to supervise dealings in Unlisted Securities, we, the undersigned, desire to suggest the following recommendations for your consideration:

"First: The personnel of the Committee be changed to the effect that same be composed of parties not identified as dealers.

"Second: That in stocks which have an open or active market, transactions may be made without restriction or necessity of report to the Committee, when at or above the closing prices of July 30, 1914.

"Third: That where securities have not had an active or open market the bid prices as published in theChronicleof August 1st, be accepted as the closing prices.

"Fourth: That in the case of securities where the Committee may deem it possible to trade at prices below those prevailing on July 30th, they establish minimum prices good for as long a time as the Committee deems practical, and that a list of these prices be furnished to those making application for same."

"We think that if the above recommendations are put into force, it will do away with the criticism which has been made as to the Committee as at present constituted, and by so doing increase the efficiency of this Committee on Unlisted Securities, by securing thorough and hearty coöperation on the part of all brokers and dealers in these issues."

In reply to this appeal the Committee of Five pointed out that whenever, in other cases, the action of a Committee had been invoked to supervise the transactionof business, confidence in the integrity of that Committee had been general and unquestioned. The Committee of Seven, the Committee on Clearing House, the Committee of Three, and the Committee of Five themselves had all been vested with dictatorial powers over a business in which their members were personally engaged. In order to render trading in unlisted stocks a possibility, at the time, similar powers must be granted and similar confidence must be given to some one. The Unlisted Stock Committee were not self-appointed because they came into being at the instigation and suggestion of the Committee of Five, and to disband them after they had started upon their work, substituting other individuals in their places, would merely stimulate fresh antagonism that might wreck the entire project. The fact that these men were dealers in outside properties especially fitted them to pass upon the reasonableness of the prices that were to be made, and there was no more reason to question their integrity of purpose than there would be to doubt that of any individuals who might take their place.

A firm stand was thus taken in defence of this new Committee, and they succeeded in carrying on their work successfully up to the time when the amelioration of conditions enabled them to disband. It must be regretfully recorded, however, that the petty jealousy and distrust which had appeared in connection with this episode continued to show themselves in a desultory way until the end. A few individuals threw what impediments they could in the path of this Committee, and thereby furnished the only exception to the wonderfulexhibition of loyalty and self effacement that manifested itself in every other department.

When the Exchange suddenly closed its doors, an immense number of people, consisting of employees of the Exchange itself and the clerical forces of all the many brokerage houses, were rendered idle. As soon as it became evident that the suspension of business was going to be indefinitely prolonged, the grave question arose as to the extent to which these people would be thrown out of employment. The Stock Exchange at once set the generous example of deciding to retain its entire force without reduction of wages, and this decision was carried through for the entire four and one half months of suspension. A more difficult problem, however, confronted the brokerage houses. Many of these firms had very heavy office rents and fixed charges of various kinds; their business had been showing meager profits and even losses for some years and, the length of the period of closing being impossible to forecast, they did not dare to undertake burdens that might get them into difficulties. The result was that a few strong houses, with philanthropic proclivities, carried their clerical forces through on full pay, but the majority were obliged to cut them down in various ways. In some cases the full force was retained on greatly reduced salaries, in others salaries were reduced and part of the force discharged, and the net result was that a great number of unfortunates were either thrown into unemployment altogether or placed in very straightened circumstances.

It is an interesting fact, bearing on the popular superstition that Wall Street is peopled by unprincipled worshippers of the dollar who are incapable of those finer qualities of character which are confined exclusively to other walks of life, that there is no region in which a quicker response to the call of the needy can be obtained than on the floor of the Stock Exchange. Even though the brokers were facing an indefinite period of starvation themselves, with expenses running on one side and receipts cut off on the other, the moment it became clear that severe suffering had come upon the clerical forces of the Street a movement was at once set on foot to start measures of relief and assistance. Perhaps the best way to convey an idea of the form which this assistance took is to quote from a report on the subject made by one of those who generously gave his time to the work. What follows is in his own words.

"A phase of the extraordinary and unprecedented conditions prevailing in the Financial District, commonly known as 'Wall Street,' was the necessity for cutting down office expenses, and though many firms carried their salary list intact, a considerable number laid off from one half to two thirds of their employees, and subsequent events developed the fact that some of them discharged practically their entire force.

"About the middle of September, the distress said to exist among the Wall Street employees, who had lost their positions as a result of the war in Europe, prompted Mr. C. E. Knoblauch to suggest that some concerted action be taken to meet this emergency, if only as atemporary expedient. A number of informal discussions of the subject with fellow members of the Exchange, and further evidences of the existence of a wider field for the work than was at first realized, culminated in a call for a meeting in the office of Tefft & Company and immediate organization.

"Officers having been duly elected, the personnel of the Committee was declared to be as follows:—James B. Mabon, W. H. Remick, Graham F. Blandy, R. H. Thomas, W. W. Price, G. V. Hollins, C. E. Knoblauch, C. J. Housman, G. M. Sidenberg, Townsend Lawrence, T. F. Wilcox, Erastus T. Tefft, Chairman; Charles L. Burnham, Secretary; Edward Roesler, Treasurer.

"The title of the Committee was formally agreed upon as 'The Wall Street Employees' Relief Committee.'

"Through the courtesy of Mr. Clarence Mackey, the offer of a suite of rooms on the second floor of the Commercial Cable Building, 20 Broad Street, for the use of the Committee, at no charge for rent, was gratefully accepted, and arrangements for occupation were made at once. Mr. Oswald Villard, through a member of the Committee, evidenced his interest by offering temporary use of rooms in theEvening PostBuilding for the purposes of the Committee.

"It was determined that the principal object of the Committee would be to act as an Employment Bureau, to find positions for unemployed and to relieve distress where it was found to exist. It was understood and arranged for, that any Wall Street employee who had lost a position as a result of the war was eligible, andthat no fees whatever be charged. A circular letter was sent to Stock Exchange members and firms appealing for subscriptions, and the matter of selection of a depository of the funds was referred to the Treasurer with power. The work of receiving and recording registration blanks commenced with a rush, over one hundred and fifty were filed the first day, and in a few weeks they numbered over one thousand.

"A very pleasant feature of the work was the cordial coöperation encountered on all sides. Helping hands were extended everywhere. The newspapers gave many 'reading notices,' and special advertising rates, and the news bureaus printed any and all notices as and when requested. The Stock Exchange Library Committee and the Secretary's Office placed their typewriting, multigraph and circular printing facilities at the Committee's disposal, furnished the rooms with desks, chairs, etc., and supplied all necessary stationery. The Stock Exchange force of telegraphers and other employees practically in a body volunteered their services, and those selected were of great assistance in preparing the card index system, which was used and found to be practical and eminently satisfactory. Appreciated assistance was promptly tendered by The Telephone Clerks' Association, The Association of Wall Street Employees, and The Wall Street Telegraphers' Association.

"Several cases of sickness, some very serious, were taken care of by Dr. L. A. Dessar, who gave free medical service to all applicants recommended by the Committee, and provided hospital treatment when required.The declarations made by the applicants demonstrated beyond any question that the number of men, women, girls and boys for whom prompt assistance in procuring employment was imperatively necessary had been greatly under-estimated, and evidenced an absolute argument endorsing the reasons for the Committee's existence.

"Many who applied were not in immediate need of money, but wanted employment, which the members of the Committee sought for them by individual solicitation of everyone they knew, or knew of, who were employers, and also by careful, judicious and timely advertising in the daily papers. Such satisfactory results were attained, that up to date of this writing, (May 15, 1915), of over seventeen hundred applications received, permanent positions were secured for about seven hundred at rates of compensation that were distinctly gratifying, all conditions considered. Two hundred and thirty were placed in temporary jobs for periods ranging from a few days to several weeks, a number of them being re-employed two or three times. Four hundred and ninety, having been taken back by their former employers, withdrew their applications.

"Numerous positions obtained for applicants while the Exchange was closed were in lines other than Stock Exchange business, and Wall Street clerks notwithstanding their recognized efficiency being, so to speak, specially trained, it was often found to be difficult, even impossible to make them fit the kind of work to which they were more or less strangers. In view of the factthat this circumstance made the accomplishment desired necessarily slow, the outcome demonstrated that it was reasonably sure.

"The request for subscriptions to the fund met with a hearty and generous response. Some apprehension was felt in this regard, but the splendid result proved to be an agreeable surprise. Appeals for subscriptions to the fund were made only to Stock Exchange members and firms, nevertheless, thanks to the general interest manifested, and the widespread advertising consequent thereto, contributions were received from generous friends outside of Wall Street, to an extent that was simply astonishing. Checks for $1,000 each were not unusual items, and as a rule the request was made, 'please do not publish my name.' A well known artist, in addition to a cash subscription, presented one of his paintings to the Committee. Through the kind assistance of the Chairman of The Stock Exchange Luncheon Club, the picture was sold for the substantial sum of $500.

"The Treasurer, with ample funds at his disposal, was able to meet calls for financial help that were frequent and pressing, and recognizing the desirability of experienced and competent assistance in making the necessarily intimate inquiries, to determine if applicants for relief were worthy, he applied to Mr. Robert W. DeForest, President of The Charity Organization Society, for expert advice in the matter, and was referred by Mr. DeForest to Mr. Frank Persons, Manager of the New York Bureau, and Miss Byington, in charge of the Brooklyn Branch, who rendered invaluable servicesin connection with many of the applications, all of which were carefully investigated. Much suffering and distress, and some cases of actual destitution were found to exist, and while a detailed statistical statement would seem uncalled for and not desired at this time, the following brief résumé of the Committee's 'relief work' will undoubtedly prove to be of interest.

"Financial assistance was extended to about one hundred individuals and families; rent was paid for thirty-nine; food purchased for forty-six; clothing was furnished in seven instances; five persons were placed in hospitals; there were a considerable number of cases where the Committee in whole or in part took care of funeral expenses; old debts for medical attendance and drugs; agency fees and surety bonds; life insurance premiums, board and lodging, etc., etc. Many applicants for assistance proved to be merely temporarily embarrassed, they were willing and anxious to be helped but did not want charity, so to meet that emergency a form of voucher was used, which acknowledged the receipt of a 'loan' without interest, to be repaid at the convenience of the 'borrower.' That applied tocashof course, payments for groceries, rent, etc., were simply receipted for.

"The results achieved, in the opinion of many, would seem to warrant an amendment to the original idea that a return to normal conditions would involve the dissolution of the Committee, and the proposition that it be made a permanent organization is being seriously considered."

This record is deeply gratifying to the brokerage fraternity because it discloses the fact that, even in the midst of a calamity so great that no individual could feel himself beyond the reach of insolvency, the impulse to succor the unfortunate remained as strong as ever among them.

The fact that the Stock Exchange closed on July 31st and did not reopen fully until December 15th, might lead to the supposition that the question of reopening was not taken up before December. Far from this being the case, the truth is that reopening began to be discussed immediately after the institution was closed. Within twenty-four hours of the closing the minority, who had not been at first convinced of the wisdom of that action, joined with the majority in urgently advising that the Exchange be not reopened soon. All through the month of August a growing anxiety over the possibility of some hasty action by the Exchange authorities showed itself among brokers, bankers, and even some government officials. For this anxiety there was never any basis, because the officers of the Exchange having exceptional means of knowing what the dangers were, had no intention of assuming the immense responsibilities of re-establishing the market without the backing and approval of the entire banking fraternity. Gradually the excited solicitude about a premature reopening subsided as the ultra-conservative attitude of the Exchange was understood, and this was followed ere long by the first symptoms of agitation for the establishment of some form of restricted market.

As we have already shown the restraints of July 31st were relaxed one by one with the lapse of time. First a market at or above the closing prices was organized under the Committee on Clearing House; then Committees to facilitate trading in listed and unlisted bonds were formed; and finally a market was provided for unlisted stocks. All these devices, however, while they brought about readjustment and diminution of strain, did not constitute a reopening of the Stock Exchange, and the restoration of that great primary market, in some restricted way, became more and more a subject of public interest and concern.

As we have seen, the fundamental reason for closing the Exchange was that America, when the war broke out, was in debt to Europe, and that Europe was sure to enforce the immediate payment of that debt in order to put herself in funds to prosecute this greatest of all wars. To use an illustration popular in Wall Street at the time, there was to be an unexpected run on Uncle Sam's Bank and the Stock Exchange was the paying teller's window through which the money was to be drawn out, so the window was closed to gain time. How to reopen this window in such a way as not to pay out any more money to the foreign creditor than would suit our own convenience was the problem which soon began to agitate many ingenious minds. As time went on plans for performing this difficult feat poured in upon the Committee of Five in constantly increasing volume, and they were frequently accompanied by a request on the part of their authors that, when adopted, the credit for their success be publicly attributed to them. Anedifying confidence was thus shown in what were usually the most visionary of these schemes.

Space does not permit the presentation of all these multitudinous suggestions, but as a matter of information we shall quote extracts from some of them. In point of time, the first communication to the Committee on this subject came on August 4th when a prominent banker appeared in person, and gave vent to the following oracular utterance: "When the Exchange reopens it should not do business from ten till three, but should open from ten o'clock to one. All transactions should be for cash, and must be delivered and paid for the same day, no contract to be allowed to stand over night." He also made the prediction, which was amply verified, that many weeks would elapse before the Exchange could be reopened at all. Some little time elapsed before anything further was presented on the subject, but by the end of August the flood of plans began and went on increasing until the Exchange resumed business.

On August 31st a communication was received from a well known "Statistical Organization" for "Merchants, Bankers and Investors" which said, in part: "In behalf of my clients, who are exceedingly interested in making it possible for the Stock Exchanges to open safely, I am getting the opinion of important bodies relative to the proposed legislation suggested on the enclosed slip, or any other which you think would serve the purpose." On the enclosed slip was the following proposed legislation "to enable the Stock Exchanges to open."

"Be it enacted: That until the President considers European conditions fairly normal it shall be a misdemeanor in this country to buy, sell, transfer, give, or accept as collateral, shares of stock or evidences of indebtedness extending over one year, unless accompanied by a certificate showing that the owner is a United States citizen, together with such evidence as the Secretary of the Treasury may require that the securities have been owned by United States citizens since July 30th, 1914."

In answer to this proposition the Secretary of the Stock Exchange sent the following reply:

"Answering your letter of August 29th, 1914, I am instructed by the Special Committee of Five appointed by the Governing Committee to say that in its opinion such legislation as referred to would be ruinous to the credit of the United States throughout the world for many years to come."

In September a letter was received from a Western banker suggesting that the slogan "Buy a share of stock" if started "would achieve success, and by so doing would greatly benefit the stock market situation. This movement would have to be started so as not to create the impression among the many thousands of people it would reach, that it was merely a movement for the purpose of benefiting the stock brokers, but that it would be instrumental in relieving the strain on every conceivable business. Were such a movement accepted, and should it meet with results worthy of the plan it would be found out when the smoke clears away that American people would own American railway and industrial shares. This could be only for the great benefit of this country but for Europe as well, for the reason that if Europe knew that there was a good absorbingpower here it necessarily would not dump its stocks at frightful sacrifices."

In October a junior member of one of the big private banking houses appeared personally and stated that, in his opinion, both domestic and foreign security holders should be treated alike; that sales should be conducted as usual; that on reopening transactions should be restricted and only sales be published and no bids or offers. His idea of restriction at the start was that all stock purchased should be paid for on the basis of 10% cash and the balance in certificates of deposit for cash, which certificates were to be non-negotiable except between banks. A Committee could, from time to time, remove the restrictions from such securities as seemed no longer to require them. The banks should be asked to agree not to call any present loans and to be very sparing in calling for margins.

Close upon the heels of this plan came a letter signed "A Friend of the People" which said "Let the Stock Exchange be opened strictly for the sale of American securities held by foreign stock holders. If they wish to throw their stocks over we can buy them at our own price. After six or eight days' selling from Europe the Exchange could be open to the world. By that time the market should be on a rising scale and safe for all."

This gentleman showed some originality in his view that the foreigner should be invited to sell at once, instead of being legislated out of the market as so many other advisers proposed. He seemed to be quite oblivious of the difficulties, however, that would havebeen encountered in inducing American security holders to stand by in pensive calm while the foreigners unloaded to their heart's content.

Early in November a Philadelphia banker wrote a long and intricate letter the full details of which we have not space to reproduce, but it contained the following fragment which is interesting in its way:

"Could not a plan be formulated between the Stock Exchanges, investment bankers and Federal Reserve Banks, by which the securities could be valued on their intrinsic and market values at such prices that would be considered reasonable to be obtained in the next two or three years; that the lenders be guaranteed against any losses from recession below the stipulated point at which the securities might later be liquidated, say sometime during the year 1917, if it had not been voluntarily liquidated without loss before. Loans so insured would have to be in force on securities carried prior to a certain date, probably before the Exchange opened, if not last July 30th, and that an insurance premium would be charged which would be considered slightly more than adequate. Any surplus could be eventually pro-rated to the policy holders. There would need to be no obligation to take out such insurance unless the borrowers preferred. The banks might, however, force them to do so in many cases or pay off loans."

At about this time many letters and suggestions were received centering round the main idea that the market be opened exclusively for such stocks as were not much held in Europe. Just as a correspondent cited above seemed to believe that American security holders could be compelled to remain inactive while foreigners sold their holdings, so these people imagined that holders of one class of securities could be kept quiet while the prices of some other class were declining in a free market.

With the above came a letter from a correspondent whose thoughts carried him back to the old days of buyers' and sellers' options, when most of the security business was done on 30 or 60 day contracts. He proposed that the Exchange be reopened so that "all trades made be 'buyer 60'. No other bids or offers to be valid." This would postpone for two months the settling day for the expected liquidation, and he felt certain that by that time there could be no trouble in meeting obligations. Unfortunately at the time he wrote there was no way of obtaining assurance of this happy outcome. The same idea in a somewhat different form came from another correspondent who, instead of deferring payment by a buyer's option, proposed that stocks and bonds be sold on a 10 per cent. basis "That is, the seller of 100 shares of Union Pacific at 112 will deliver to buyer 10 per cent. of amount sold, and receive a check for $1,120, together with a contract in which the buyer agrees to take 10 per cent. more, or say 10 shares at the end of six months, 10 shares in 9 months, 10 shares in 12 months, 10 shares in 15 months," etc., etc., at the original price of $112 per share. This plan seemed to contemplate a bequest of unsettled contracts to future generations of unsuspecting brokers. The author of it was particularly solicitous that, in the event of its adoption, his name should be handed down to posterity along with the unfulfilled contracts.

An idea of very wide prevalence, which was touched upon in nearly all communications to the Committee and which even some bankers approved, was that a preliminary step to reopening should be an agreementby the banks not to call loans made prior to July 31st, 1914, for some specified period of time. This idea was very thoroughly discussed and looked into by the Committee. It was found to present great practical difficulties, but was never definitely abandoned until the resumption of business was shown to be possible without it.

The advice which was received by the Committee of Five with regard to reopening was divided into two classes. There was that large body of suggestions, some of which we have described above, which were volunteered either in letters or in interviews, and there was the advice of well known bankers and men of financial prominence which the Committee itself solicited. In the latter class figured a member of one of the largest private banking houses in New York whose opinions and counsel were of inestimable value. This gentleman, gifted with clear insight and a thorough grasp of the situation, and generously anxious to be of service to the Committee, pointed out from the start that the reopening of the Exchange hung upon a favorable swing in the balance of trade. When the indebtedness of the United States to Europe could be offset by our exports the danger of reëstablishing our market would become negligible, and this shrewd adviser predicted that the desired reaction in foreign exchange was much closer at hand than was generally supposed. The most valuable of his admonitions, and the words which did most to strengthen the courage and resolve of the Committee were these: "You will be given all kinds of adviceby all kinds of people, but remember that in the end the responsibility will fall upon you, therefore listen attentively to everything you are told but act on your own independent judgment." This wise course was successfully followed, and the change in the trend of foreign exchange came, as he predicted, much sooner than was expected.

Numerous other prominent men who were turned to for assistance showed the greatest willingness to render every service within their power, and placed the Committee under heavy obligations. There was one case where the zealous desire to work out a very detailed solution of the reopening problem brought a ray of humor into these otherwise serious and anxious discussions. A certain private banker presented his scheme in approximately the following words: "Before you can reopen the Exchange you must be in a position to know to what extent Europe is going to throw our securities upon this market, and the only way to obtain this information is to send some members of your Committee abroad. This delegation should go first to London and settle there for a long enough time to get intimately acquainted with leading persons in the financial world. This could be done by cultivating social intercourse, dining and consorting with these people until a frank statement from them could be obtained concerning the probable volume of American securities for sale."

As this statement proceeded visible signs of painful emotions manifested themselves among the Committee. The Exchange had already been closed three months,and they were being informed that a plan requiring a lapse of some six months more must be carried out before the happy day of resumption would be in sight. The banker having paused for a few minutes' reflection, resumed: "Then there is France. Many American securities are held there, and as under their system the action of individual investors is largely controlled by the financial institutions, it will be quite feasible to determine the probable selling of French investors when you have got in intimate touch with these institutions." Another additional six months' delay loomed to the vision of the demoralized Committee, and sad words of reproachful protest were about to burst from some of them when their mentor again broke the chilly silence of the meeting room. "Now that I think of it there is Switzerland. The Swiss are a thrifty and saving people and undoubtedly have much money in our properties. In spite of her neutrality Switzerland will feel the economic pinch of this war and her people will have to liquidate many of their foreign holdings. It will be wise, therefore, for you to extend your inquiries from France into Switzerland."

Here the reaction came, the heart-sick feeling which had plunged the respectfully attentive Committee into gloom vanished, and mirthful emotions so possessed them that it was a hard task to maintain proper dignity and decorum. The temptation to inquire whether this contemplated trip around the globe was to include an effort to trace some American railroad bond into the sacred precincts of Thibet, or a dash to the South Pole to search the abandoned luggage of some deceasedexplorer, was resisted, and the worthy banker whose imagination had taken such distant flights retired unconscious of the very mixed emotions he had aroused. In the light of the actual reopening that took place only six weeks later this interview becomes a curiosity worth preserving.

Along with other prominent men who consented to meet and consult with the Committee there came Sir George Paish and Mr. Basil G. Blackett. These two gentlemen had come over from England to consult our government and our banking fraternity with regard to the abnormal exchange situation created by the outbreak of war. Before the Committee of Five they, of course, dwelt mainly upon the question of reopening the market. Sir George Paish, being by nature an optimist, took a very roseate view of the outlook, so much so that some members of the Committee were at first disposed to fear (his mission being that of a collector of debts who sought prompt payment) that his diagnosis of the situation was prompted more by his hopes than by his convictions. He proceeded to Washington, where he spent a considerable time negotiating with the national authorities, and on his way home he again appeared before the Committee, on November 23rd, and stated his belief that the Exchange could be reopened at once.

In the light of what followed it is plain that Sir George Paish's views were very nearly correct and not by any means over-optimistic. The rapidity with which the readjustment of exchange solved the problem presentedto the American market was entirely in harmony with his predictions and very flattering to his judgment. His companion, Mr. Basil G. Blackett, was a reticent young man who seldom intruded himself into the discussion, but it was noticeable that whenever he was asked for an expression of opinion he showed himself to be thoroughly informed as to facts and sound in judgment. The Committee was certainly under an obligation to these gentlemen for the time they were willing to give to its deliberations. In this connection it is a pleasure to record that the authorities of the London Stock Exchange showed a similarly friendly disposition. All through the period of crisis communications passed between the London and New York Exchanges and were accompanied by a most friendly spirit of mutual assistance.

While plans for reopening the Exchange were discussed from an early date, nothing definite took shape up to the end of October, and at that time the Committee of Five were still in the dark as to how long business would continue to be suspended. Whether the New Year would find Wall Street still bound and muzzled was an open question on November 1st. As the month advanced, however, a very rapid change in conditions began to manifest itself. On November 10th two significant steps were taken. Mr. Smithers, Chairman of the Unlisted Stocks Committee, appeared and stated that his Committee intended making a report recommending their own discontinuance. He was followed, on the same day, by Mr. E. R. McCormick,Chairman of the Board of Representatives of the Curb Market Association, who urged that the time for a formal reopening of the Curb was at hand. On the following day the Committee on Unlisted Stocks, having submitted a proposed circular which they wished to issue in announcement of their dissolution, the Committee of Five adopted the following rule:

"The Special Committee of Five being of the opinion that the market for unlisted stocks has arrived at a condition that makes supervision of dealings no longer necessary, hereby approve the act of the Committee on Unlisted Stocks in dissolving their organization."Ruling No. 23, dated September 24, 1914, is hereby rescinded."

"Ruling No. 23, dated September 24, 1914, is hereby rescinded."

It is needless to say that this action, together with its ratification by the Committee of Five, was first submitted to and approved by the Clearing House banks. Unlisted stocks comprised a group of properties which were practically not held abroad, and the reason for holding them under close restraint at first was the danger of the sentimental effect on a panicky situation in case their prices should undergo a violent decline. It having been demonstrated that such a decline was not to be feared, the Committee in charge were only too glad to relinquish the difficult duty of supervising the trading and open a free market. It was further decided that the restraint upon free quotation and publication of prices be simultaneously removed from the unlisted dealings.

As a natural sequence to the above action, on November 12th, the Curb Association issued the following notice:

"To the Members of the New York Curb Market Association:"Gentlemen:"It has been decided that the improvement in the general financial situation has removed the necessity for restrictions over trading in unlisted stocks, therefore you are hereby notified that the New York Curb Market will officially resume business on Monday, November 16th, 1914, at 10 o'clocka.m."This action on the part of the Chairman of the New York Curb Market Association has received the approval and sanction of the Committee of Five of the New York Stock Exchange."E. R. McCormick,"Chairman."

"To the Members of the New York Curb Market Association:

"Gentlemen:

"It has been decided that the improvement in the general financial situation has removed the necessity for restrictions over trading in unlisted stocks, therefore you are hereby notified that the New York Curb Market will officially resume business on Monday, November 16th, 1914, at 10 o'clocka.m.

"This action on the part of the Chairman of the New York Curb Market Association has received the approval and sanction of the Committee of Five of the New York Stock Exchange.

"E. R. McCormick,"Chairman."

On November 13th, the Committee of Five ruled that:

"Unrestricted trading in Listed Municipal and State Bonds for domestic account may now be resumed, but that all transactions for future delivery must be submitted for approval, as heretofore, to the Sub-Committee of Three on Bonds at the Clearing House of the New York Stock Exchange."

On November 16th, Mr. Frank W. Thomas, Vice-President of the Chicago Stock Exchange and also Chairman of their "Trading Committee," appeared before the Committee of Five and stated that it was the intention of the authorities of their Exchange to meet on the coming Wednesday to discuss the advisability of opening on Monday, November 23rd. He asked for information regarding the attitude of the New York Stock Exchange in the matter of securities listed on both exchanges. The Committee requested him not to permit dealings in Chicago, in such securities, at prices below the minimum prices established in New York.

Thus one after another came the evidences of a sudden transformation in the financial conditions and of a consequent movement toward the resumption of business, all of which rested fundamentally on an immense increase of our exports and the resulting favorable movement of foreign exchange.

Encouraged by these happenings the Committee of Five actively took up numerous plans for letting down the bars. There had been for some time considerable pressure exerted by those members of the Exchange who were distinctively bond brokers, to have the bond business transferred from the Clearing House to the floor of the Exchange. They thought that this step would make a wider and more satisfactory market for bonds and that the supervision of the Committee of Three could be exerted in one locality as well as in the other. In view of the rapid improvement in conditions, and the fact that unlisted bonds had been given an unrestrained market by the dissolution of the Committee of Seven, it was thought that the moment had come for taking this step in advance. Preparations were at once set on foot to restore the restricted bond market to the floor and thereby insure that partial opening of the doors of the Exchange which would be the entering wedge to ultimate resumption.

Unfortunately the plans of the Committee in this regard were not sufficiently safeguarded. Through some unforeseen leak the news of their intentions got abroad, and brought on some awkward consequences. The first of these was the appearance of a private banker, thesame one who early in August had predicted a long period of suspension, to protest against greater freedom in bond dealings. He foresaw terrible results if this rash act were permitted and claimed to have information that European holders of bonds were awaiting this chance to swamp the market. The Committee were not much alarmed by this gentleman's warnings and were proceeding with their nefarious scheme when a further warning was addressed to them. There was a certain member of a Stock Exchange firm who was on friendly terms with some of the Washington authorities, and who seems to have felt it his duty to see that the Exchange did nothing to give offense in these high quarters. When this individual learned what the Committee had in mind he sent word that it would be prudent for them to let a particular government officer know their plans before putting them into execution. Thinking that this warning must be based on some special information the Committee at once authorized this gentleman to inform his friend in the Government of their plan. This was on Wednesday, November 18th, and the intention of the Committee was to place the bond market upon the floor of the Exchange on the following Monday. On Thursday this well meaning but somewhat misguided go-between reported that he had communicated with Washington and that his friend there had expressed the desire to see some member of the Committee before any further steps were taken.

This news hit the plans of the Committee somewhat after the manner of a submarine torpedo. They had everything in readiness for Monday, and the newspapers,which had also got wind of their intentions, had already announced to the public unequivocally that a restricted bond market would be started on that day. With such limited time to act in there was nothing to resort to but postponement and a notice was immediately given to the press in the following words:

"The Special Committee of Five states that while the plan outlined by the newspapers concerning a further extension of the present method of dealing in bonds was substantially that under consideration by the Committee, the magnitude of the interests affected has led to unforeseen difficulties which will necessitate further consideration. When a decision is reached ample notice will be given to the public officially."

A letter was at once sent to the Government official notifying him of the readiness of the Committee to visit him at his convenience, and the following day, Saturday, he very courteously sent them a telegram explaining that the suggestion of an interview had in no way emanated from him but that he had misunderstood the intermediary (who had communicated by telephone) and supposed that the interview was being sought by the Exchange. So this mighty tempest in a tea pot resulted from the excessive zeal of an outsider who while trying to pilot the Committee into safe waters succeeded in running it on a reef of his own creation.

Immediately on ascertaining the true situation the following notice was sent out on Saturday:

"The Special Committee of Five announces that having consummated its plan for bond transactions on the Exchange under certain specified restrictions, the same will, in accordance with the Constitution of the Exchange, be submitted to the GoverningCommittee at the regular meeting to be held on the 24th inst. If the recommendations of the Special Committee are adopted by the Governing Committee the plan will go into operation at an early date."

Some of the newspapers having announced positively that this new move with regard to bonds would take place on Monday, the 23rd, they were very indignant that it should be postponed without supplying them with a good and sufficient reason. The Committee, on its part, feeling that it was undesirable to publish the details of an awkward misunderstanding with a public official, who would not want his name dragged into a matter that he had in no way concerned himself with, refused to furnish the reason. This at once let loose upon them those vials of reportorial wrath which, up to that time, they had been fortunate in escaping. One journal amicably stated that this incident merely emphasized a fact which had all along been obvious, namely that the Committee were, and had been from the start, totally incompetent to perform the task intrusted to them.

While a gentle shower of epithets fell upon their devoted heads the Committee proceeded with their work and, having obtained the necessary authority from the Governing Committee, they sent out the following ruling on November 24th:

"That so much of rule No. 21 as applies to dealings in listed bonds through the Clearing House be rescinded, to take effect at the close of business on Friday, November 27th, 1914. Beginning on Saturday, November 28, 1914, dealings in bonds listed on the Exchange will be permitted on the floor of the Exchangebetween the hours of ten and three o'clock each day except Saturday, when dealings shall cease at twelve o'clock noon. Such dealings to be under the supervision and regulation of the Committee, and to be for 'cash' or 'regular way' only and not below the minimum prices as authorized by the Committee from time to time. Transactions at prices other than those allowed by the Committee, or in evasion of the Committee's rules, are prohibited. All rules of the Exchange governing delivery and default on contracts covered by this resolution shall be in force on and after Saturday, November 28th, 1914, but the closing of contracts 'under the rule' shall be subject to the foregoing provisions."

Thus on Saturday, November 28th, the doors of the Stock Exchange were once more thrown open and a restricted market in listed bonds was established on the floor under the watchful eye of the Committee of Three. There was some hesitancy at first as to whether these bond transactions should be quoted on the ticker in the accustomed way, but before the day of opening came it was decided to report them as usual. By requiring that all trades should be for "cash" or "regular way" and, in a subsequent ruling, by instructing all purchasers of bonds to report to the Committee when such bonds were not delivered by 2.15p.m.on the day following the purchase, it was hoped to impede any sudden or violent liquidation of foreign securities.

The restoration of the bond market to the floor was a complete success, and at about the same time a general revival of public confidence showed itself in a rise in prices first in the street market and then in the Stock Exchange Clearing House itself. Encouraged by these symptoms the Committee of Five at once formulateda plan for carrying the reopening a step farther. A list of stocks which were not international in character was made out and submitted to the Bank Clearing House Committee, and with their concurrence it was decided to place these upon the floor of the Exchange to be traded in at or above certain prescribed minimum prices.

At a meeting of the Governing Committee on December 7th the following resolution was adopted: "That the Committee of Five is hereby empowered to permit dealings on the floor of the Exchange in such stocks as it may designate under restrictions prescribed by it. That the Committee of Five is hereby authorized to enforce stock loan contracts whenever in its judgment it may deem best so to do, and that the resolution of July 31st, 1914, be modified in this respect."

A list of minimum prices was fixed upon that averaged some two or three points below the closing prices of July 31st, and on December 11th the Committee issued a ruling prescribing the conditions for the partial resumption of stock dealings on the Exchange. We here present it in full:

"The Special Committee of Five rules that Rule 13 be rescinded, in so far as it applies to stocks admitted to dealings in the Exchange from time to time by the Committee of Five, said rescission to take effect at the close of business on Friday, December 11, 1914."Beginning on Saturday, December 12, 1914, dealings in certain specified stocks listed on the Exchange will be permitted on the floor of the Exchange between the hours of ten and three o'clock each day except Saturday, when dealings shall cease at twelve o'clock noon."Dealings in such stocks as shall be specified by, and be under the supervision and regulation of the Committee, shall be for'cash' or 'regular way'onlyand not below the minimum prices authorized by the Committee from time to time. Transactions at prices below those allowed by the Committee, or in evasion of its rules are prohibited."A list of stocks to be admitted to dealings on the Exchange accompanies these rulings. Minimum prices on same will be announced on December 11, 1914."All stocks quoted on July 30th at or below 15 per cent., or $15 per share, may be dealt in without restriction as to price, but are included in the list for your guidance, and will be marked 'Free' in the price column."All stocks admitted to dealings as above, which were being cleared through the Stock Exchange Clearing House at the close of business on July 30, 1914, will be similarly cleared from the opening of business on the 12th day of December, 1914."All stocks admitted to dealings, which were being dealt in 'Ex-Clearing House' at the close of business on July 30, 1914, will be similarly dealt in from the opening of business on the 12th day of December, 1914."Stocks admitted to dealings on the Exchange will cease to be dealt in through the Stock Exchange Committee on Clearing House. Stocks not so admitted will continue to be dealt in through the Committee on Clearing House until further notice."All rules of the Exchange governing delivery and default on contracts covered by these rules shall be in force on and after the 12th day of December, 1914, but the closing of contracts 'Under the Rule' shall be subject to the foregoing provisions.STOCKS LOANED"The Loan Market for stocks will reopen at ten o'clock,a.m.on the 12th day of December, 1914, for such stocksonlyas are admitted to dealings on the Exchange, from and after which date all rules of the Exchange governing the borrowing and loaning of such stocks shall be in force, but the closing of contracts 'Under the Rule' shall be subject to the foregoing provisions."The above rule shall apply to stocks borrowed and loaned prior to and since July 30, 1914."Borrowed and loaned stocks will be cleared as before July 30th last, but only in cases where such stocks are admitted to dealings on the Exchange."Loans of stocksnotadmitted to dealings on the Exchange will continue to stand until further notice, unless otherwise agreed to by both parties to the contract."

"Beginning on Saturday, December 12, 1914, dealings in certain specified stocks listed on the Exchange will be permitted on the floor of the Exchange between the hours of ten and three o'clock each day except Saturday, when dealings shall cease at twelve o'clock noon.

"Dealings in such stocks as shall be specified by, and be under the supervision and regulation of the Committee, shall be for'cash' or 'regular way'onlyand not below the minimum prices authorized by the Committee from time to time. Transactions at prices below those allowed by the Committee, or in evasion of its rules are prohibited.

"A list of stocks to be admitted to dealings on the Exchange accompanies these rulings. Minimum prices on same will be announced on December 11, 1914.

"All stocks quoted on July 30th at or below 15 per cent., or $15 per share, may be dealt in without restriction as to price, but are included in the list for your guidance, and will be marked 'Free' in the price column.

"All stocks admitted to dealings as above, which were being cleared through the Stock Exchange Clearing House at the close of business on July 30, 1914, will be similarly cleared from the opening of business on the 12th day of December, 1914.

"All stocks admitted to dealings, which were being dealt in 'Ex-Clearing House' at the close of business on July 30, 1914, will be similarly dealt in from the opening of business on the 12th day of December, 1914.

"Stocks admitted to dealings on the Exchange will cease to be dealt in through the Stock Exchange Committee on Clearing House. Stocks not so admitted will continue to be dealt in through the Committee on Clearing House until further notice.

"All rules of the Exchange governing delivery and default on contracts covered by these rules shall be in force on and after the 12th day of December, 1914, but the closing of contracts 'Under the Rule' shall be subject to the foregoing provisions.

STOCKS LOANED

"The Loan Market for stocks will reopen at ten o'clock,a.m.on the 12th day of December, 1914, for such stocksonlyas are admitted to dealings on the Exchange, from and after which date all rules of the Exchange governing the borrowing and loaning of such stocks shall be in force, but the closing of contracts 'Under the Rule' shall be subject to the foregoing provisions.

"The above rule shall apply to stocks borrowed and loaned prior to and since July 30, 1914.

"Borrowed and loaned stocks will be cleared as before July 30th last, but only in cases where such stocks are admitted to dealings on the Exchange.

"Loans of stocksnotadmitted to dealings on the Exchange will continue to stand until further notice, unless otherwise agreed to by both parties to the contract."

On Monday, December 14th, the next business day after the limited list of stocks had been placed upon the floor of the Exchange, it was reported to the Committee that the volume of transactions taking place in the Stock Exchange Clearing House, in the stocks not yet admitted to the floor, had risen to such proportions as seriously to embarrass that institution. As this activity was taking place on a rising market and signs of increasing confidence were constantly multiplying, the Committee quickly resolved, on the same day, to transfer all stocks to the floor on the following morning, and notice to that effect was at once sent out. The unexpected appearance of this notice on the tape was greeted with cheers of approbation in the Exchange, and on December 15th the long hoped for reopening of the entire market had become a reality.

The Committee of Five by this act brought their own rule to a close. Arbitrary power had been put in their hands to be exercised while the Exchange remained closed, but now that it was reopened authority naturally returned to its legitimate channels. The Committee therefore presented the following report to the Governing Committee on December 15th:

"The Special Committee of Five beg leave to report that in as much as the crisis that existed on July 31st, 1914, has passed, and financial affairs in this country have resumed a practically normal condition, the necessity for the Committee's continuance no longer exists and hence they request to be discharged. Before being discharged they desire to express their appreciation of the trust and confidence placed in them by the Governing Committee. They also wish to express to the members of theExchange their appreciation of the manner in which their rulings have been respected, even though in many cases it involved great sacrifices.Resolved, That the report of the Special Committee of Five be received, and the Committee be discharged."

Resolved, That the report of the Special Committee of Five be received, and the Committee be discharged."

Thus, like the sudden and unexpected shifting of a dream, the Committee of Five who so recently had almost despaired of fixing a date for reopening the Exchange, found the Exchange open and themselves a memory of the past. The abruptness of their exit was tempered, however, in the following manner. As above described, the reopening was accompanied by the restraint of certain arbitrary minimum prices below which securities could not be sold. It was felt that, owing to the critical and indecisive state of the war, there was a continuing possibility of some news that might renew a crisis in the market. While this possibility lasted the maintenance of minimum prices furnished an automatic check upon sudden panic which would avoid raising the question of a second closing of the Exchange. In order to regulate these minimum prices and so change them from time to time as to keep in accord with normal supply and demand, it was necessary to appoint a Committee, and the original Five were continued in office with this sole regulative power. As bonds were similarly restricted, the Committee of Three also lingered on the scene for the same purpose. The two Committees performed this unusual function up to the first of April, 1915, when the very marked improvement in conditions led to the abandonment of this last vestige of artificial restraint.

It is instructive, as showing the workings of some minds, that although the Committee of Five, in its capacity of regulator of minimum prices, issued a public statement that they were under no circumstances going to valorize or sustain prices but merely expected to maintain a safeguard against some unforeseen shock to confidence, many people wrote them urgent letters asking that in certain properties a minimum should be maintained which would render selling impossible. It was quite futile to try to disabuse some of these correspondents of the idea that no decline should be allowed in properties that they were interested in.

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