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  Committee ­
  of  the  New  York  District,  acting  at  the  instance ­
  of  and  in  cooperation  with  the  Federal  Reserve ­
  Bank  of  New  York,  appointed  a  “  sub-committee ­
  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  chairmanship ­
  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  Federal ­
  Reserve  Bank,  certain  of  the  larger  banks  and
trust  companies,  without  formal  action  being  taken
and  with  each  institution  acting  on  its  individual  account ­
  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;  Federal ­
  Reserve  Bulletin,  October,  1918,  p.  935.
10  See  resolutions  adopted  by  the  board  of  directors  of  the