that the careful placing of these
securities would be a great aid to the situation because every
investor who made a purchase would facilitate the liquidation of their
loans, ease the strain on the money market, and diminish the volume
of securities for sale. There was undoubtedly much to be said in favor
of this view when looked at from the standpoint of the effect upon the
bond houses themselves or upon the loan market, but there was another
aspect of the question which was less reassuring. If these houses
started, at this terribly critical time, to place their securities
among their clients at declining prices, and if these prices became
known, which they certainly would, no one could foretell what the
consequences might be. Many large institutions, such as Insurance
Companies and Savings Banks, had funds invested in bonds, and many
money lenders held loans upon bonds as security; what would be the
effect upon these interests if a declining market even in unlisted
bonds should be publicly quoted?

Influenced by this grave uncertainty the Committee of Five resisted
the pressure brought upon them by certain representatives of the bond
dealers who raised this question first on the nineteenth of August.
Several of these gentlemen represented important firms and
institutions which were not members of the Exchange, and their freedom
from any obligation to be controlled by the Committee created a
situation which threatened to become strained. In all cases of this
kind, where an independent outsider and the Committee could not come
to an understanding, the practice had become established of appealing
to the Clearing House Bankers to act as a court of last resort. The
banks, with their power to call loans, exerted an influence which
could reach every nook and corner of the business world, and, at the
same time, their immense facilities for feeling the financial pulse
made them the best judges of what risks it was as yet safe to take. A
series of meetings consequently took place between the Bank Clearing
House Committee, the representatives of the bond houses, and the
Committee of Five. At the first of these meetings the bank Presidents
leaned very decidedly to the views of the Stock Exchange, and it was
decided to postpone any consideration of a departure from the status
quo for at least a fortnight.

The general situation remaining very critical all through August, no
further steps were taken until September 8th. By that d