The Washington herald., 1918-10-29
lure FOR PANIC
| IN MONEY POOL
peculative Impulse Gives
s Bankers no Alarm,
Holland Says.


e floor of the stock exchange, not
stricting the price, for he was
rsuaded that the flow OF money
large, amounts would speedily
nd TO bring the price down to nor
hl figures because supply would
in excess of demand. Mr.. Tap
IN demonstrated the accuracy Of
Is view upon several occasions,
he came to the rescue in panic
hergencies, having raised a money
Rol and then offered these funds
the open market. Speedily the
ice reacted to normal figures.
At- one time when money panic
evailed and some OF the COVER
rs OF the stock exchange for that
Rson called upon ]. Pierpont Nor
n to explain to him the dangerous
ID desperate situation. Mr.. Nor
IN said no more than this:
'Go back to the exchange and let
nouncement be made that imme-
htely a large amount of money
II be offered, and let that be mar
ted at whatever price il will
fch- The effect will soon be per-
Ived in a reduction OF bids for
Pney until in a little while it will
mmand no more than the normal
Dee"
Il was exactly as Mr.. Morgan
ID void be the fact. Making use
the telephone he secured in a lit
while from various banks con-
buttons to a money pool, the ag-
gate amount of which. was large.
at money was at once offered in
exchange and speedily there
lowed a rapid decline in quota
ms. until before the end of the
siness day money was at normal
lrket rates.
Money Committee Meets.
may be that some reference
made to these earlier expert
fes at the meeting OF the So
led New York bankers money
nmittee. which undoubtedly had
per consideration the prevailing
strong impulse toward specula-
n and investment If the condi-
ms which were associated with
Rney difficulties in the days OF
Tappan and Mr.. Morgan are
neWhat similar to those which
Titled the bankers money COM
tee in holding an all-day ses-
n then II may have been sug-
Fted by some of the bankers that
expedient way to overcome anv
hculries which might arise from
n movements in the exchange as
resulted in a million share
nsactlons day would be by fol-
ing Ihe precedent set by Mr.
gan and Mr.. Tappah. or in other
rus 10 permit call loan transac-
s 10 ADJUST themselves to the
patton, not being affected by ar
Fary artificial restriction.
Us one of the interesting faa-
1Aciated with the floating
ILlberty Loan for
Vat there then began
impulse and also a
OF buying by the public
ltles- This too in spite of
Kact that it was necessary for
serioers to the liberty loan who
ght upon the iustaIIment DIan
eoiIy to pay in 10 per cent This
ng an initial payment. Some
may pass before there is ac-
ate Information respecting the
puns in the aggregate Of these
ments. Many persons maid the
al lnstallment when thev bougbt
pOhds. but how many did this
country may not know until
al Gays pass. On the assunD-
that the New York district sub-
oeu Tor the full amount Of the
ia OF Sl.SOO.00O.OOO. there should
been paid as an initial install
ht SlS0.OOO.OOO on October % In
entire United States II was mo-
hry to receive on the dav evad
ene INITIAL payment $500. OOO, 900.
dr as the relation OF the member
Ks TO the Federal Reserve banks
concerned they were able TO
the initial payment and more
meet IL by turning in Treasury
'lncates OF Indebtedness. Rnt
scrloers were obliged to make
h payment.
Foreign Bonds in Demand
hat ocCasioned the specuIati,.o -,
- part the continuing vic
OF ne allied armies IN BeiSium
IN part the conviction
sual warfare will cease within
OF eignt months; in part also the
amount Of money which is held
oeposlt IN the banks by the oeonle
ne united states, and also the be-
tnat prevailing prices for ,e,.uri-
are low. Steady investment in
fisn government bonds has been
progress, as. for instance, the
Eio-French bonds, the French Re-
nc 54z per cent bonds. the bonds
bordeaux, Lyons. Marseilles and
Is and United Kingdom 5a per
bonds, as well as Canadian
ds. are finding enlarged markets
investment purposes in this coun-
nt there Is an interesting. even
pous, reverse point Of view: for
lie foreign bonds are being more
more absorbed by the American
pie. on the other hand people in
Fopean countries are now buying
cash, and therefore for invest
ht. American securities in very
Fe volume. Probably the fact that
enormous volume of exports in
month Of September was of the
hey value of approximately 800
Poo and the aggregate money value
pur exports for nine months was
round numbers 81, ,5OO, ,OO0.O 900. had
e influence in stimulating the spec
ting tendency. Our total exports
the current year are likely to be
the money value of 5000. 900. 900.
effect OF this enormous trade
be felt later on and is likely to
huiate further interest in securi-
Speculation and Investment.
Much Money In West.
her parts Of the United States
the New York district. especially
Mid West and. to some extent,
far West. have. been in receipt
normous amounts of money which
esent payments by the govern
I for munitions of war and for
plies This explains why st. Louis.
nespolis, Cincinnati. Toledo. and
n great centers of industry were
speedilY to slhscrtho fnr thair