The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1912-06-17

utilized SO as to relieve the ruinous
stringency of the money market. Call
money, so termed-that is to say,
money loaned to brokers upon COLA
teral security and subject to repay
ment upon call-was commanding
ruinous premium. Unless relief was
obtained many brokers would be COM
PEELED to suspend and the probab ilfty
was that the stock exchange itself,
as a matter of protection, would close
it's doors for a week. To do that
would involve serious and possibly
dangerous financial and business
complications throughout the coun-
try. 1t would mean a week of fast
days, so to speak. President Thomas
testified that in that emergency he
called upon James Stillman, president
of the National City bank, and said
to him that twenty-five million dol
lars, if it became Immediately avail
able, would probably relieve the sit
uation. Whereupon Mr.. Stillman adj
vised Mr.. Thomas to call upon J. P.
Morgan. When he did so, Mr. Nor
gan said that the twenty-five millions
would be Immediately available and
would be divided up into lots, so that
different brokers-those among the
brokers who made a business of lend
ing money-could have certain por-
tions of that vast sum.
Exactly what Mr.. Thomas predicted
would be the outcome in case this
money were secured happened. Coun-
he did not think that it was a very
dangerous power for any one indivi-|
dual to posseSs-the power which Mr..
Morgan had of securing and instantly
utilizing twenty-five million dollars.
How 1t Was Done.
On the face of this testimony it
would appear that Mr.. Morgan had
only to go to his own vaults and take
out twenty-five millions in cash so
that he might send this amount to
the stock exchange. Possibly counsel
for the Pujo committee will, during
the coming week, secure testimony
which will show exactly how this
money was raised. Those who were
well Informed at this time knew that
Mr.. Morgan was appealed to because
he was regarded as a leader. Some
man must have been appealed to in a
crisis of that time. There must have
been order, system and organization
in order to secure twenty-five mill |
lion dollars and lend that much mon |
ey Mr.. Morgan, as leader, sim ply |
called upon various banks of New
York for constructions to a proposed |
sum of twenty-five million dollars. |
by telephone. So far as is known, |
no bank declined to participate in |
this great loan. Mr.. Morgan himself |
participated. Some of the banks
were obliged to cut into their legal /
reserves The twenty-five million |
dollars was not Mr.. Morgan's money, |
but it was the aggregate subscription |
made by the banks of New Y DIRK for |
the purpose of relieving the money |
market of a very grave danger.
Not the Only One.
This was not the only large obliga-
ton or loan which bankers and men
Dc capital of New York made at that I
lime Across the street from Mr. Nor
sar's office in the office of the assis-
-ant treasurer of the United States.
sat George Cortelyou, then secretary
II the treasury. Mr.. Cortelyou an
bounced that the treasury depart
nent would put on deposit with the
,ationaI banks of the United States
many millions of money then held in
he treasury, but the law required Mr..
Iortelyou to exact from the banks as
for these deposits of govern
nent money certain high-grade bonds.
Many of the banks would have been
ma BILE to secure any of these deposits
/ it had not been for the leadership Of
dr. Morgan. He announced that he
would lend without charge in the form
J.: commission or interest to any ma
ional banks that wanted to borrow
,onds all the available bonds which
lie had in his own vaults. He simply
xacted an acknowledgment from the
ranks that they had received these
IRE deposits of government money.
Il also modified, so to speak, like
esources held by other private bank
rs and by banks. Under his leader
hip the savings banks of New York
ent many million of government and
ther high-grade bonds to the national
'anlss- Much the greater part of the
government deposits in the national
arks at that time was secured by bor-