New-York tribune., 1919-01-25
No Limit Now
On Money for
Stock Market
Continued from page l

eral points on heavy trading. The
freeing of the money market is viewed
with a high degree of satisfaction in
trading circles, where it is expected to
result IN a substantial expansion Of
business
Wall Street may now be said to have
free and open market in securities
for the first time in a great many
months. Since this country entered the
war and the government began to be a
heavy borrower in the money market
credit for stock trading purposes has
been greatly cprtailed, first gradually
and then more rapidly as the bankers
committee came into existence and
took up the matter Of money control
IN a forcibe manner. The committee
became very active last August when
1T issued a warning in the Street to
the effect that it would not countenance
any undue expansion in speculative
activity in the stock market From
that time on until after the signing of
the armlstice the committee was the
controlling factor in the money market,
and in October when the favorable war
news caused rising activity in stocks
which threatened to be ovcrdone Stock
Exchange houses were forced to re-
duce their outstanding loan accounts
tc the level of September 16. This
forced many houses to hquldate large
speculative. holdings of stocks.
Subsequently when that failed to
halt the speculative wave, the COM
mittce took action which resulted in
compelling Stock Exchange houses to
put up larger amounts of collateral on
loans obtained from the banks. After
the signing OF the armistice and the
danger of overspecuation subsidized,
the committee removed the restriction
pn loans so far as it affected borrow
ing by houses for the purpose of car
rylng bonds and notes which were in
process Of distribution. In December
the committee let the bars down fur
ther when the restrictions as to the
amount of collateral required against
pank loans we're modified. This left
as the only remaining restriction, the
most important Of all, that which linn
tied the loan account to the level of
September 16. 1t is this restriction
1reclng the market Of all restraints.
Committee Not Yet Disbanded
"he bankers committee, which is
particular to specify that it Is still
IN existence and in a position to again
assume control Of the money market
II 1T becomes necessary, consists of
benjamin Strong, chairman; Frank A.
Nanderlip, of the National City Bank;
a. II. Wiggin, Of the Chase National;
Charles II. Sabin, Of the Guaranty
Trust Comrany; Gates W. McGarrah,
OF the Mechanics and Metals National
Bank; Walter Z. Frew, of the Corn
Exchange Bank; James S. Alexander,
OF the National Bank of Commerce;
James N. Wallace, of the Central I'm
ION Trust Company; William Conway
Of the Guaranty Trust Company, and
jackson +. Reynolds, Of the First Ma
tional Bank.
With the disbanding of the money
pool the call. money market, through
which Wal Street is accustomed to
nnance large part Of its operations,
viii DC left to its own devices. II
Will mean that the call rate, which has
been held artificially for two years
from going above 6 per cent through
the operation Of the $200,0O0,0O0 money
pool, to which all the leading banks of
the city contributed fixed quotas, will
be allowed entire freedom of move
ment. This, the bankers point out,
VIII tend automatically to keep the
loan account within reasonable limits.
One OF the reasons for the action
of the committee in lifting the restric-
TONS on the money supply at this time
is said to be the unfavorable condi-
ton existing in the general investment
market. Since the signing Of the ar
misticc rumber Of corporations have
sold securities for refunding purposes
or in order to raise new capitalA and
1T is asserted that these offerings have
not been thoroughly digested owing
TO the restrictions upon the supply Of
credit.