The Washington herald., 1917-10-06
Big MONEY POOL
GUARDS MARKET
Holland Tells of $500, 900,
600 Reserve Revealed
! b. Strong.

When Benjamin Strong, jr.. COVER
nor Of the Federal Reserve bank Of
New York, announced early in the
week that a money pool has been or
yanized OF which 500. .0oo. 900 were i'm
mediately available. the intent being
TO protect the money market from
serious stress. he made revelation OF
the purpose Of one of the many dis
cussions which have Of late been prt-
yately and secretly held at the Fed
eral Reserve Bank. Every one in the
financial district knew that some very
Important matter was under discus
sion It was also the surnlise that
the New York Bankers represented by
the so-called money committee, were
In close touch with the Washington
authorities. and particularly through
Frank A Vanderlip. The surmise was
that financial subjects of the greatest
Importance were under discussion, out
there was little or no inlxling respect
ing the nature Of these discussions
Gov. strong's announcement pleased
the entire financial district. 1t was
especially gratifying in view OF the
fact that he intimated that s2oo,OOo.Ooo
was not the limit of the pool. but was
no more than the amount that would
be Immediately available for protecting
the money market.
May Increase Pool.
As the days have passed since the
announcement was made II has been
strongly suspected that this money
pool would be increased. If any
emergency makes II necessary, 10
an amount suficient always to pro-
tect the money market.
There are some interesting fea-
lures associated with the creation
Of this greatest of money pools ever
organized in the United States or,
so far as We know. anywhere else
First of all II makes 1t clear that
Notwithstanding the extraordinary
strain occasioned by the necessity
of persuading the American people
to buy at least $4,000. 10000 worth
OF government bonds, the banks all
over the United States being relied
upon for the greatest assistance
perhaps in facilitating the market
ing of this loan in four weeks time,
yet the banks of New York have
pledged themselves to supply at the
same time at least 5000. 900, 900 in
money and inferentially as much
as may be needed so that the money
market may not break under the
strain.
Greatest of Pools.
Another feature associated with the
establishment of this pool is fur
nished by comparison OF IL with other
bankers pools which have now be-
come traditional. In 1900 at a time
when there was grievous apprehen-
sion lest the campaign which Col.
Bryan was making for the Presidency
upon the so-called Free Silver plat
form might cause panic in the Sc
curities and mo ley ularkels, the late
Frederick D. Tappan. chairman OK
the Clearing House Con.itIee, was
summoned from MS summer home in
the JRerkshires. one Sunday. to New
York. The perI'ous outlook was set
forth to him. The next day Mr..
Tappan, within two hours, organized
a gold pool. but IL was only for S25,-
90. 600. That sum was regarded as suf-
ficient to protect the markets and
the mere announcement that this pool
had been established furnished a NOR
al influence which served abundantly
to protect the markets.
Al the beginning of the war it be-
came necessary upon the instant to
establish pool for as much as $780,
COO. COO all of it consisting of gold
or its equivalent. The banks of New
York within a few hours contributed
their proportionate parts to this pool.
It was organized by ]. P. Morgan
and was one Of the first works, II
not the very first work, of financial
magnitude and importance which he
undertook after he succeeded his
father as the head Of the firm of J.
P. Morgan and Company. 1t enabled
New York City to escape the protest