The sun. [volume] (New York [N.Y.]) 1916-1920, 1918-11-05
LOAN SITUATION TO
Be THRESHED OUT
Stock Exchange Names Five to
Act Jointly With Money
Committee.
DUTIES NOT OUTLINED
Rule for Higher Margin on
Borrowings to Check Specu-
lation Now in Effect.

The governors OF the New York Stock
Exchange. following a special meeting
held yesterday, announced the appoint
ment OF q special committee to act
Jointly with the money committee In
new step to consider the present money
situation with relation to borrowing BY
members Of the New York Stock Elk
change.
The committee Is composed Of II. @. ..
Noble. president OF exchange; Winthrop
Burr. vice-president: Henry K Pom
| roy. chairman of law committee ard
! committee on admissions: Donald q.
Geddes Of Clark. Dodge & Co., mem
| her of Stock Exchange Partners Associs-
! ton. and william II. Remick OF Re
mick, Hodges & Co., chairman OF com.
mittee on commissions and chairman OF
committee on insolvencies. also repre-
, sentative OF Stock Exchange Partners
| Association.
In the appointment of this committee
| the governors adopted the following res
| olution: Resolved. That a committee OF
/ Ave, consisting of the president and
| Messrs. Burr. Pomroy. Geddes and Rem
| lex. be appointed to consider the present
| money situation with relation to borrow
| Ing Dy meTnDerS OI tHd E>tW tOIh clcSAN
Exchange and their firms and to confer
| with the loan committee OF the banks
with regard to same"
This formal statement contains no
mention of the widespread effect OF the
| action OF officials OF the exchange. in cur
| failing loans to the aggregate amount
| outstanding on September 16 as directed
| unofflciallyq by the money committee,
| which in turn was said to be directed by
| ha Dapn In Washing
| ton. II also contains no mention of the
| responsibility of certain officials of the
| exchange who were summoned by the
exchange and who without referring the
matter to the board OF governors put
into effect drastic curtailment orders.
The appointment Of the committee was
| greed to last week by the money com
mittee after the receipt of a letter from
a member of the Stock Exchange Part
| ners Association. acting either individu-
| ally or for the association, n fact an
| nounced exclusively in THE Sun on No
vember /. This letter. II was said, de-
| scribed the whole situation with relation
to credit for Stock Exchange purposes as
a mess" and urged a joint committee
| of bankers and Stock Exchange Part
| ners not only to thresh out the present
| situation and to find way to meet the
orders OF the Treasury Department with
out Gripping the business in the New
York Stock Exchange but to deal with
future readjustments that may be re-
auired by the surrender of Turkey and
Austria and the possibility OF even big
ger International Developments,
| The new committees first opportunity
! 10 discuss the situation with the money
Committee Is expected to come Thurs
day. when Benjamin Strong, Jr., returns
| from n vacation. although there may Le
| "A meeting tomorrow.
| The reo'iirpmenta hy tho money rom.
m!ttee of 80 per cent. of market value as
margin on any loans for Stock Exchange
| purposes went into effect for the first
time yesterday. This was an increase
from 100 per cent of market value to
1870, or Sl-3 per cent. There was no
appreciable effect on prices yesterday,
but during the entire preceding week
there was an abundance of liquidation of
! weakly margined accounts. Whether
the new committee will obtain or even
seek modification OF the new margin
requirements is problematical and - n
question, ne answer to which Will be
awaited with countrywide interest
The committee. however, will deal Wit,
the inconsistency of the Stock Exchange
officials ordering q curtailment of loans
to the arbitrary date September l6 at
the time the money committee in a pug-
lie letter to the president of the New
York Stock Exchange said: 18th )
money Deems II necessary
now to take steps to prevent a.. further
expansion OF loans"
| The Stock Exchange Partners Assoc!-
alton in the letter written to the money
committee made the point. II Is said, that
there Is a great deal OF difference be-
tween preventing further expansion and
J curtailing credit to that OF September l5
The new committee, It is expected. will
endeavor to place the responsibility for
| the curtailment order.
one Of the purposes for the formation
OF the committee, however. ii was ex-
planned yesterday. Is to take steps TO SEQ
10 1t that the money committees threat
TO recommend further increase in
margins IL necessity arises" will not
need to be carried outs The prompt COM
plance by the members OF the eXcha "gs
with the new 80 per cent. margin re-
quirements and the check In tine volume
or speculative transactions. IL is OK
pected. will go far to prevent the neces-
sity OF any further drastic action. In
the opinion OF one prominent banker II
will not be necessary for the money conf
| mitteo To take anv furthar antJon