The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1915-07-11

Today, with the whole world so
largely dependent upon the American
money markets, with the business Of
our exchanges in it's present stable
condition, with securities strongly held
and our supply of gold unprecedented.
1t is difficult to realize that a year
ago the New York State Exchange
was forced to close in order to avoid
| a nation wide panic with possible re-
suits that no one dared contemplate.
The story of the New York Stock Ex-
change in the Crisis of 1914" has been
written by it's president. H. G. S. No
BILE, and it's most dramatic chapter is
that which describes the events of
the morning on which it was decided
not to open the exchange.
| On the afternoon of July 80, writes
Mr.. Noble, the officers of the Stock
| Exchange met in consultation with a
number of prominent bankers ana
bank presidents, and the question of
| closing the exchange was anxiously
discussed. While the news from
abroad was most critical, and the
days decline in prices was alarming
it, was also true that no collapse had
taken place and no money panic had
yet appeared. The bankers opinion
was unanimous that while closing was
| q step that might become necessary
at any time, it was not clear that
1t would be wise to take it that aft
| ernoon, and il was agreed to await
the events of the following day. Mean
! while, several members of the gov
erning committee of the exchange had
| become convinced that closing was
, inevitable and. in opposition to the
| opinion of the bankers, urged thai
| imme steps be taken to bring IT
about.
Paralysis Became General.
During the evening of July 80 the
| conviction that closing was impera-
tive spread with great speed among
| the large brokerage firms. Up to a
late hour of the night the president
of the exchange was the recipient of
| many messages and kilograms from
houses not only in New York, but all
over the country, urging immediate
action. The paralysis of the worlds
| stock exchanges had meanwhile be-
| come general. The bourses at Mon
treal, Toronto and Madrid had closed
on July 2S; those at Vienna, Buda-
pest. Brussels, Antwerp. Berlin, and
Rome on July %: st. Petersburg and
all South American countries on July
80. and on this same day the Paris
bourse was likewise forced to sus-
pend dealings. first on the Coulisse
and then on the bourse itself On
Stock Exchange officially closed, SO
that the resumption of business on
that morning would have made New
York the only market in which a
world panic could vent itself
The governing committee of the ex-
change were called to meet at 9
o'clock Uhe earliest hour at which
they could all be reached, for it was
summer and many were out of town.
and that hour thew bIed in
the sceretary's Office ready to consider
what action should be taken. In ad-
ditiOn to the committee many mem
bers of prominent firms appeared in
the room to report that orders to sell
stocks at ruinous prices were pour
ing in upon them from all over the
world and that security holders
throughout the country were in a
state of panic. 1t would be hopeless
to try to describe the nervous ten
sion and excitement of the group of
perhaps fifty men who consulted to-
gether under the oppressive con-
seriousness that within forty-five min
utes lit was then a quarter past
nine) an unheard of disaster might
overtake them. 1t was determined that
the governing committee should go
into session at once there was
SO little time to spare. Just as they
started for their official meeting room
a telephone message was, received
from a prominent banking house stat
ing that the bankers and bank presi-
dents were holding a consultation and
suggesting that the exchange author
tiles await the conclusion of their de-
liberations.
Gong Ringer Warned.
There is an employee of the ex-
change whose duty it is to ring a
gong upon the floor of the big board
room at 10 o'clock in the morning.
Until that gong has rung the mar
ket is not open and contracts are not
recognized This employee was in
structed not to ring the gong until
he had received personal orders to do
SO from the president; a permanent
telephone connection was established
with the office in which the bankers
were comforting, and amid a horrible
suspense the outcome of their con-
ference was awaited. For twenty min
utes this strain continued. 1t was a
quarter before ten and only fifteen
minutes remained in which to act.
Meanwhile the brokers were fast as
sembling upon the board room floor, |
orders were piling in upon them to
sell at panic prices, 10 o'clock was
approaching. and although all felt
that the opening should not be per-
mltteu no one ndQ "OTu the
governing committee as to what was
going to be done. Il
At a quarter Of ten, no word hav-
ing come from the bankers. the re-
ceiver of the telephone which had
been connected with their meeting |
place was hung up. and the govern |
ing committee were called in ses- |
sion to take action. As they took |
their seats two messages reached \
them. One was brought by a prom |
inent member of their body who had |
gone to the office of the president |,
of the bank clearing house and had
been told by him. after consulting |
with some of his fellow Officers, I'VE |
concur; under no circumstances is it |
our suggestion, but if the exchange |
desires to close, we concur" The |
other was sent, through . member of !
the exchange, from one of the lead |
ing bank presidents who stated that |
closing would be a grave mistake and
that he was opposed to it.
The roll was called and thirty-six |
out of the forty-two members an
swered to their names. The chair hav-
ing announced the purpose of the |
meeting, Mr.. Ernest Groesbeck moved |
that the exchange be closed until |
further notice. This motion was car
ried, not unanimously but by a large |
Mr.. Groesbeck then moved /
that the delivery Of securities be sus-
pended until further notice. and. this
being carried unanimously. made a
third motion that a special commit
tna ~ four ,harc Of the