The sun., 1919-01-25
Money COMMITTEE
LIFTS LID ON LOANS
psmoves All Restrictions on
Loans for Speculative
Uses at Once.
poo1r rs DISSOLVED
supends Functions Of Special
Stock Exchange Commit
tee Of Five.

IN known as the subcommittee on
money Of the Liberty Loan committee OF
IN. sscond Federal Reserve district, yes
.rday not only removed all restrictions
80 credit for speculative purposes. sus-
,.,dinr the functions OF the special Stock
rrhanee committee OF Eve. but dissolved
"a so-called money pool. The action
soss into immediate effect, and the
sanrers will receive official notification
AZ the termination OF the $500, 0o0, 900
pool In this mornings mail.
IN Official language. which was an
,ourced last night. the money committee
rscorted the following conclusions:
That control by the Stock Exchange
onnmttee may for the present be sus-
p@dsd.
b, requested to continue to receive from
members OF tho exchange daily reports
0, their borrowings until after the next
liberty Loan IL placed.
THAT the definite arrangements made
Nth large group of New York banks 10
,,n,sh funds for Stock Exchange loans
I and as required should now be termi-
aitsd."
Tho first information that credit re-
.,rston was imminent was printed In
Yesterdays SUN on receipt OF word that
he money committee itself earlier in tho
week by unanimous vote had appealed
20 secretary OF the Treasury Glass over
The long distance telephone to permit the
-smoval OF restrictions and to let the
market for securities and money take its
aatural course.
Money Had Piled Up Here.
Fur long time money has been pill
INC up in New York. flowing here as a
,esult OF liquidation OF Inventories by
7dustrial companies. the idle money
reduced by Government payments from
ppeeeds OF certificates OF Indebtedness.
which did not have to go into new cap
tal expenditures, and the natural con-
d.ions following the turn OF the year.
For several weeks local bankers have
Advocated the relaxation OF credit re-
strictione, but the approval OF the Sec
'etary OF the Treasury did not give his
approval until he WAS assured that the
Government could be amply supplied
with credit.
The certificates Of Indebtedness Of
'ered biweekly have been so well taken
ard the subscriptions 10 the Fourth Lib
sr,y Loan are SO nearly fully paid as
70 permit banks to extend ample credit
10 brokerage houses for speculative our
yoses
The money pool, under which the
rrcup Of local bankers pledged $500. o00.-
900. was extended indefinitely on jan
1ary TO- when the one year agreement
EXPIRED by Limitation. As a matter of
act, the call on the money pool at any
.!ns has been relatively small, and for
several weeks the fund has not been
made Use Of. In fact money to the ex-
:ent Of SIS 200. 900 to $25.000,00O went
cnloaned day after day.
The first sign that the Government
would need all available credit came
ste last summer when Gates w. Nc
1arrah. president OF the Mechanics and
Hetals National Bank, issued a warning
against undue speculation" The warn
ing proved ineffective and credit restric-
tons. mild at first, but later more
stringent, were put into effect The re-
s;1ctions since late in September have
he'd brokers' loans down TO q maximum
aggregate OF 100000.
The announcement OF tho so-called
money committee was given out last
night by Robert II. fireman, deputy gov
'rnor OF the Federal Reserve Bank of
Nev York. following several meetings
throughout the day by the full commit
t.s IN consultation with the Stock Ex-
-hsnge authorities. Tho statement fol-
.Jvs IN full
Statement Of Committee.
Lest December, when the arrange
rsnt whereby the New York banks have
Ssen furnishing funds to stabilize rates
e. iosrs on Stock Exchange collateral
vas about TO expire. the committee in
;uied whether the Treasury Depart
nent wished an extension OF the ar
nnsement then In force and were re-
suested by II 70 continue their opera
Ions In aid OF the Governments finan-
dal requirements.
Acting IN accordance with the wish
Of the Treasury thus expressed the sub
Committee on Donec' arranged with tho
Nev York banks to continue the ar
nAeement then existing until after the
tat Government loan and with the au-
'hsrties OF the Stock Exchange to con-
''hus exercising control OF the loan 40
count to prevent Its expansion In the
aggregate
This week. however. tho officials OF
ne Stock Exchange, IN a written COM
murcatlon to the money committee
havIng stated that the conditions have
70 changed that there Is now nothing to
''~'NotN VIC "a N
roVenent which would absorb large
amounts OF money, the subcommittee
OF money az ite meeting to-day gave full
Consideration to this statement and after
consultation with and the approval OF
ne Treasury Department reached the
following conclusions:
That control by the Stock Exchange
oomnittee may for the present be sus-
pended
That tho Stock Exchange authorities
Re requested to continue to receive from
members Of the Exchange, daily reports
N he!r borrowings until after the mex!
Liberty Loan !s placed.
That the definite arrangements made
WIN large group OF New York banks to
'urn'sh funds for Stock Exchange loans
ard as required. should now be termi-
mated
The money committee desires TO ac-
knowledge and record It's appreciation OF
ne hearty cooperation which the mem
DeT OF the Stock Exchange and the New
1orh banks have given II during the
PAST months and feels confident that
piould Il hereafter become necessary. In
me Interest OF Government financing, to
ieetaohsh the control of money for
SOCK Exchange loans and for the sta
w'nation Of money rates. the Stock Elk
.hange authorities and the New York
banks will again unite. with a patriotic
purpose &. tend full support to the
a