The Birmingham age-herald., 1917-10-06
TO PROTECT MONEY MARKET
-Bv HOLLAND

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 New York, October 5.-(special. When Benjamin Strong Jr.. governor 1 of the federal reserve bank of New York, announced early in the week that a money pool had been organized o1 which s2,o00,o0o were immediately avail able, the intent being to protect the made revelation of the purpose of one of the many discussions which have oi late been privately and secretly held al I the federal reserve bank. Every one ir I the financial district knew that some very important matter was under dis l the New York bankers represented by l the so-called money committee, were in close touch with the Washington author tiles, and particularly through Frank A. vanderlip. The surmise was that finan- cial subjects of the greatest importance were under discussion, but there was little or no inkling respecting the na- ture of these discussions.
 Governor Strong's announcement pleased the entire financial district It was especially gratifying In view Of the fact that he intimated that $20o- 000,0 GOO was not the limit of the pool. but was no more than the amount that would be immediately available for pro- tecting the money market.
 As the days have passed since the an-
 
 strongly suspected that this money pool would be increased, if any emergency makes 1t necessary. to an amount suf- ficient always to protect the money mar ket.
 There are some interesting features as- sociated with the creation of this great est of money pools ever organized in the United States or so far as we know anywhere else First of. all, 1t makes 1t clear that notwithstanding the extra sity of persuading the American people to buy at least Ss, ,O0O,o 100000 worth of government bonds, the banks all over the United States being relied upon for the greatest assistance perhaps in fa- cilitating the marketing of this loan in four weeks time. yet the banks of New York have pledged themselves to supply at the same time, at least $2o0,0O0,000 in money and inferentially as much more as may be needed so that the money
 Another feature associated with the establishment of this pool Is furnished by comparison of it with other bankers pools which have now become tradi- tional. In 1900 at time when there was grievous apprehension lest the campaign which Colonel Bryan was making for the presidency upon the so-called free silver platform, might cause panic in the securities and money markets the late Frederick D. Tappan, chairman Of the clearing house committee, was sum moned from his summei home In the Berkshires one Sunday to New York The perilous outlook was set forth to hifh. The next day MT. Tappan, within two hours, organized a gold pool but it was only for s25ooo,ooo. That sum was | markets and the mere announcement that this pool had been established fur nished a moral influence which served abundantly to protect the markets.
 At the beginning of the war 1t became necessary upon the instant to establish a consisting of gold or it's equivalent The banks of New York within few hours contributed their proportionate parts to this pool. It was organized by J. P. Nor gan and was one of the first works, if not the very first work, of financial mag took after he succeeded his father as the head of the firm of J. F. Morgan & Co. It enabled New York city to escape the protest of its notes which were held in large amounts in London and about to become due
 Then again there was a second pool or ganized for $l0O 0,O00 in gold for the pur- pose of enabling merchants and importers to secure the means whereby they could make payment for their obligations then maturing in London and elsewhere in Flu rope. Tn that pool many of the banks of the United States participated.
 The $5O0000.000 loan made by the bankers of the United States to England and France jointly did not invoive the or. ganization of pool. It was practically underwritten by the American banks. Now it is deemed the part of prudence for the banks of New York to contribute their proportionate parts to money pool. of which s20o, 100000 Is to be immediately available with more to come if that be found necessary. The management of