New-York tribune., 1918-11-30
Money Restrictions
Affecting Bond and
Note Buying Lifted
Brakes on Speculation Will
Continue, Brokers' Com
mittee Announces

Announcement Of the first easing OF
the policy of the money committee to
prevent any further expansion" OF
loans, which was made public on Octo-
ber "a, was made yesterday by the
Stock Exchange. Beginning to-day re-
strictions covering borrowings by
members of the exchange to finance
for purposes of distribution, the pur-
chase of bonds and notes for their
own account, will be removed. Hither-
to the only exception to the embargo
on loan increases affected loans
against United States government Sc
curitics.
The modification, which was recon-
mended to the money committee by the
Stock Exchange Committee of Five,
was approved by the bankers last Tues
day at their regular weekly meeting.
The change applies only to the invest
ment market and, in the opinion Of a
member Of the money committee, it
will not lead directly to any great ex-
pansion Of loans secured by Stock Ex-
change collateral. 1t was not regarded
by observers of the money situation
as in any way relaxing the restraints
on speculation, although in some
quarters it was looked upon as the
first of a series of notifications, which
in the aggregate would set the stock
market free again.
A member Of the Stock Exchange
Committee of Five pointed out that the
new ruling does not relate to the buy
ing of bonds on the exchange, but
applies to new issues of bonds and
notes and to blocks of notes and bonds,
which, though not new, have been held
by one house and are now TO be re-
leased to the investment public. The
fact that the change referred to
temporary" borrowings wae said 70
mean that it necessitated sales for
cash to the buying public. The form
on which the Stock Exchange firms arc
loans, as amended, says that loans
against bonds and notes purchased for
distribution after November 30 are to
be excluded from the aggregate Of
loans which must show no expansion.
The Committee's Letter
" In o letter to members Of the Stock
Exchange, the committee of that in
stltution, IN announcing the change.
says:
"The special committee appointed by
the governing committee on November r
70 consider the money situation with
relation to borrowings by members of
the New York Stock Exchange end
their firms, believing that it will
prove Of benefit to the financial!
situation, has recommended to the
money committee that restrictions
covering temporary borrowings bv
members Of the exchange to finance
1or purposes Of distribution the pur-
chase of bonds and notes for their own
account be removed
The money committee of the banks
has acquiesced in this request. Hhe
necessity. however, for continuing for
mer restrictions in regard to other
securities still exists.
The money committee OF the banks
and this committee expect that no
member of the exchange will by reason
OF the removal OF tbs above restric-
tons unduly increase the loan account
OF the banks. Should this expectation
not be fulfilled it might become neces-
s0ry to reimpose the restrictions. In
accordance with the above arrange
ments. and in addition to the present
required information, members must
daily report to the secretary's office
the amount Of money borrowed against
purchases of bonds and notes made on
and after November 80, 1918"
Expect Further Notifications
Although the letter says "the neces-
slty for continuing restrictions ir re-
gard to other securities still EXISTS ,,
we'll informed brokers expressed the
opinion that changing conditions nigh t
soon force another readiustmcnt. In
this connection it was pointed out that
IN business concerns all over tie conn
try Inventories are being reduced. and
thus the demand on the banks for
funds is decreasing, releasing ]arre,,
quantities for Stock EXCHANGE mir
poses. A reflection Of this, it is held.
is shown in the easing of the money
rates, which ruled at per cent on
mixed collateral yesterday and 5ls on
industrial collateral. Funds in increas-
ing volume arc said to be flowing here
from interior banks, and these facts
lead many brokers to conclude that
further relaxations are soon coming.