﻿n8

WAR BORROWING

rowing period the normal tendencies of the money
market were influenced and, within the possibilities
of the situation, were dominated by the deliberate
control of the New York City money market. On
September 5, 1917, the Liberty Loan General Com-
mittee of the New York District, acting at the in-
stance of and in cooperation with the Federal Re-
serve Bank of New York, appointed a “ sub-com-
mittee on money ” for the purpose of “ securing the
most complete cooperation with the Government in
its financial program by all the financial interests of
the city.” 9

In the succeeding months under the chairman-
ship of the governor of the Federal Reserve Bank of
New York and with a membership representative of
the most powerful financial institutions of the city,
this “ money committee ” undertook and carried out
with increasing effectiveness what amounted to a
deliberate rationing of the money market. Upon
the basis of daily information gathered by the Fed-
eral Reserve Bank, certain of the larger banks and
trust companies, without formal action being taken
and with each institution acting on its individual ac-
count in the matter of terms and collateral, made
available from time to time adequate amounts of
time and call money “ for preventing any dearth of
funds and any friction in the monetary mechanism.”
While steps were thus taken to prevent money rates
from advancing to extreme figures, very pronounced
measures were adopted by propaganda 10 and out-

9	“ The Financial Review: Annual for 1918,” p. x, 1; Fed-
eral Reserve Bulletin, October, 1918, p. 935.

10	See resolutions adopted by the board of directors of the