STOCK EXCHANGE AN INTERNATIONAL MARKET 523
Stock Exchange after the United States entered the war.
Indeed, by the critical spring of 1917, the liquid resources. of
Europe in the shape of gold and salable securities were seri-
ously depleted, and it had become increasingly difficult for the
Allies to make payment to us for the vast demands which
their fighting forces had placed on our fields and factories.
Accordingly, when America entered the conflict, the tre-
mendous and still little appreciated task of financing the war
was largely shifted from London to Washington, and conse-
quently most of its real burden was likewise transferred
from Threadneedle Street to Wall Street. The Allied cur-
rencies were accordingly “pegged” near their par rate with
dollars, so as to facilitate the continual shipment of our
goods abroad. But instead of floating in our market new
foreign loans which would have interfered with the sale of our
own war bonds, the United States successfully floated the
gigantic Liberty loans. Almost half of the many billions re-
ceived from their sale was devoted to advances made to our
Allies practically on open-book account by the United States
Treasury, to finance their purchases of materials here. The
skilful marketing of the huge Liberty issues on the Stock Ex-
change, the hearty cooperation of the latter organization with
the government in this vital operation, and the gradual distri-
bution effected there among American investors, have already
been commented upon. What the Stock Exchange had done
for the smaller issues of American corporations or of foreign
governments, it did with conspicuous success in the case of the
unprecedentedly great Liberty loan issues. Money is in truth
the “sinews of war,” and the Stock Exchange through its indis-
pensable part in the work of marketing Liberty issues among
permanent investors, contributed in no small degree to the
successful termination of the war.
2 On the work of the New York Stock Exchange in placing the Liberty loans with
American investors. consult the statement and testimony of Governor Benjamin Strong
of the New York Federal Reserve Bank, before the “Agricultural Inquiry’ Commission
(Washington, August, 1921), p. 687
