The sun. [volume] (New York [N.Y.]) 1916-1920, 1918-10-31
LOAN RESTRICTIONS
CUT STOCK VALUES
Brokers Dissatisfied With
Manner in Which Situation
Has Been Handled.
FOR NORMAL BORROWINGS
Believed That Curtailment Is
More Drastic Than
Necessary.

Stock Exchange and banking circles
were all aquiver yesterday with renewed
discussion of the money situation and or
the question of responsibility for the
marked contraction In loans, which re-
suited in continued liquidation and de-
clines Of 2 to points in the more inn
portant Issues In a market conspicuous
for weakness rather than OF volume In
trading. The traders who received the
order from the Stock Exchange author
tiles to get loans back to the basis OF
September 20 asked WHO killed Cock
Robin? Who Is responsible for the con-
traction in the loan account?" And as
the day came to q close both sides were
making efforts to minimize the effect or
the drastic curtailment OF speculation
which has resulted in losses In market
values
A spokesman for the money committee
said the stock Exchange authorities
have received no orders other than those
contained in the letter written by Ben
jamin Strong, Jr., governor OF the Fed
eral Reserve Bank and chairman OF the
money committee, to II. q. s. Noble,
president of the New York Stock En-
change. This letter. which wac made
public, in announcing the requirement or
vember 4, said in part: THE money
committee deems 1t necessary now to
take steps to prevent further expan-
sion Of such loans"
Declines in Market Values.
The continued liquidation by certain
houses and the statement that the Stock
Exchange authorities had communicated
with certain houses that had extended
their loans since September &c requesttpg
them to get their loans back to the
earlier figure indicated that a more dras-
tic step had been taken than the Street
| felt was warranted by the money com
| mittees pronouncement. The latter
| statement. II was said. showed that the
money committee was satisfied with the
aggregate loans OF $685.. 100000 to $3.50
| 600 900, but the curtailment of credit as
| a result of the action of the Stock Ex-
change authorities. II was estimated yes
| terday, ran close to 500 900, 900. and at
| the same time the declines In market
| values have further operated to aggra-
| waite the situation.
The board OF governors of the New
| York Stock Exchange held a special
! meeting yesterday, ostensibly to list
some American Writing Paper bonds but
| II was learned there was also a discus
| sion Of the money situation. At the con-
cluSlon or the n1cetlnS a governor OF u1e
| exchange said the Stock Exchange is not
going to do anything in the way of cur
| tailment OF credit that has not been
ordered. You can bet" he said. your
| last dollar on that"
| Difficulty was found in reconcilng the
statement OF the governor of the Stock
| Exchange with that OF the member OF
the money committee. but this is an
| authoritative explanation: Last Thurs
day the money committee. prior to the
despatch of the letter to tile president
| of the New York Stock Exchange. called
into the conference II. G. 8 Noble, pres
ident Of the exchangn Winthrop Burr,
| vice-president OF the exchange James
g. Mabon. former president. and
| Henry X. Pomroy. The meeting was a
long one. and the bankers expressed
their opinion unreserved'y OF the danger
| OF imitation as a result of the undue
| speculation on the Stock Exchange. the
| guilt OF the Stock Exchange In per-
hitting such speculative expansion
! with the increase of more than $780,
! 100000 in loans and the necessity Of
cCrtailment of speculative activity
Liquidation of Loans.
| Much was said verbally which the
| bankers were unable or unwilling to re-
! duce to writing. and man In the inner
| ,rrClp said yesterday that the Stock EN-