APPENDIX 
621 
in New York, made to the President of the U. S. Senate at the request 
of the Governor of the Federal Reserve Board (known as “Senate 
Document 262, 66th Congress, 2nd session”) : 
“Prior to the armistice, agencies of the Government were employed 
to restrict the issue of new securities for purposes other than those 
which were deemed essential for carrying on the war. At the same 
time, as the Treasury undertook to sell large amounts of certificates 
of indebtedness and Liberty Bonds bearing low rates of interest, the 
question arose as to whether the competition of the general investment 
market might not prejudice the success of the Government issues. In 
these circumstances, with full understanding on the part of the Treas- 
ury Department, the officers and members of the New York Stock 
Exchange undertook to limit transactions which would involve the 
increased use of money for other purposes, in consideration of which 
the principal banks of New York City endeavored to provide a stable 
amount of money for the requirements of the security market.” 
The arrangement above referred to was established after corre- 
spondence between Governor Benjamin Strong of the New York 
Reserve Bank and Chairman of the “money committee,” and President 
H. G. S. Noble of the New York Stock Exchange. The Exchange's 
Business Conduct Committee required the submission to it daily of 
‘he total borrowings on securities of the Exchange members, and saw 
to it that these were not increased. As Governor Strong subsequently 
stated (“Agricultural Inquiry,” p. 678), “. . . in point of fact, dur- 
ing the period of control, which was exercised by the Business Conduct 
Committee of the Exchange, I do not recall that the loan account, as 
reported by the members of the Exchange, increased at all. They 
held it down by direct contact with the members.” At the request of 
the U. S. Treasury, the “money committee” continued to function 
into 1919. However, public protests against this artificial control 
of the money market after the Armistice became so general, that on 
January 24, 1919, the “money committee,” after consultation with the 
U. S. Treasury, decided (ibid., p. 680): 
“1. That control by the Stock Exchange Committee may for the 
present be suspended. 
“2. That the Stock Exchange authorities be requested to continue 
to receive from members of the Exchange daily reports of their bor- 
rowings until after the next Liberty Loan is placed. 
“3. That the definite arrangements made with a large group of 
New York banks to furnish funds for Stock Exchange loans, if and 
as required, should now be terminated.