H22

APPENDIX

“The money committee desires to acknowledge and record its
appreciation of the hearty cooperation which the members of the
Stock Exchange and the New York banks have given it during the
past months, and feels confident that should it hereafter become necessary,
 in the interest of Government financing, to reestablish the control
 of money for Stock Exchange loans and for the stabilization of
money rates, the Stock Exchange authorities and the New York banks
will again unite, with a patriotic purpose, to lend full support to the
Treasury Department.”
It was not found necessary subsequently to reestablish the artificial
 war-control of the money market. At the end of 1922 the
Stock Exchange discontinued the system of requiring reports from
its members as to their security collateral borrowings, and did not
resume it until February, 1926.
The curious student of the 1917-21 period in the call loan market
is referred to the aforesaid “Senate Document 262, 66th Congress,
and session” and also to the Agricultural Inquiry Report, especially
pages 543-546, and 665-684. Developments in the call loan market
during and after 1926 may be found passim in the “Stabilization
hearings,” and also in the hearings on the LaFollette resolution.
(XId) The evolution and methods of the present money desk
system were excellently set forth in an address by Mr. Robert R.
Atterbury, member of the Executive Committe of the Stock Clearing
Corporation (October 25, 1928):
“When I first came into the Street—and that was a good many
years ago—it was the custom for houses to send clerks out among
lending institutions to borrow funds necessary for the day’s requirements.
 There was no fixed rate, and each loan, with each institution,
was a matter of personal negotiation, and the rate often varied widely.
Later we had what was called an “open money market” on the floor
of the Stock Exchange, without supervision, and subject to the violent
changes in money rates whenever an unusual demand for or supply
of money existed. Competitive bidding and offering—oftentimes
entirely unwarranted—made for wide fluctuations of rates. even within
the five-hour business day.
“This situation was so exaggerated during the Great War that a
money committee of five members of the Governing Committee of the
Stock Exchange was formed to cooperate with the banks in controlling,
not only the rate, but the disposition of funds available for Stock
Exchange purposes. This was at the time of the closed money market,
 during which the committee of five, together with a committee