e members. In the relatively few cases where an
indisposition to live up to these rulings was brought to the attention
of the Committee, an appeal from them to loyalty and good judgment
never failed to bring a recalcitrant member to terms.

On this day, August 5th, a special circular was sent out to answer the
constant inquiries as to whether purchases or sales of securities were
in any way permissible during the period of closing. It contained the
following:

"When the Governing Committee ordered the Exchange closed it was
their intention that all dealings in securities should cease,
pending the adjustment of the financial situation and the
reopening of the Exchange.

"It is possible that cases may occur where an exception would be
warranted provided such dealings were for the benefit of the
situation, and in no sense of a speculative character, or
conducted in public. Any member, however, taking part in such
transactions must have in mind, his loyalty to the Exchange,
whether or not he is living up to the spirit of the laws, and
that he is not committing an act detrimental to the public
welfare."

On August 7th the question of the reopening of the Exchange again came
to the front. A letter from Baltimore was received urging that the
Exchange reopen for dealings in bonds only, and the newspapers were
so urgent for some statement on the subject that the Committee
authorized the following:

"The Special Committee of Five will not recommend to the
Governing Committee the reopening of the Exchange until in their
judgment the financial situation warrants it, and as before
stated, ample notice will be given of the proposed opening."

The question of borrowed and loaned stocks came up at this time in two
aspects, one the interest rate to be charged, and the other the
determination of the market price at which such loans should stand.
With regard to the former the Committee ruled on August 5th that
"until further notice, from and after this date, the interest rate on
all borrowed and loaned stocks shall be 6%." In the latter case they
ruled (August 10th) that "borrowed and loaned stocks must be marked to
the closing prices on Thursday, July 30th, 1914, at the request of
either party to the loan."

The effect of this second ruling was to establish the policy of
regarding the closing prices of July 30th, as the market for
securities, so tha