As we have seen, the fundamental reason for closing the Exchange was that America, when the war broke out, was in debt to Europe, and that Europe was sure to enforce the immediate payment of that debt in order to put herself in funds to prosecute this greatest of all wars. To use an illustration popular in Wall Street at the time, there was to be an unexpected run on Uncle Sam's Bank and the Stock Exchange was the paying teller's window through which the money was to be drawn out, so the window was closed to gain time. How to reopen this window in such a way as not to pay out any more money to the foreign creditor than would suit our own convenience was the problem which soon began to agitate many ingenious minds. As time went on plans for performing this difficult feat poured in upon the Committee of Five in constantly increasing volume, and they were frequently accompanied by a request on the part of their authors that, when adopted, the credit for their success be publicly attributed to them. An edifying confidence was thus shown in what were usually the most visionary of these schemes.
Space does not permit the presentation of all these multitudinous suggestions, but as a matter of information we shall quote extracts from some of them. In point of time, the first communication to the Committee on this subject came on August 4th when a prominent banker appeared in person, and gave vent to the following oracular utterance: "When the Exchange reopens it should not do business from ten till three, but should open from ten o'clock to one. All transactions should be for cash, and must be delivered and paid for the same day, no contract to be allowed to stand over night." He also made the prediction, which was amply verified, that many weeks would elapse before the Exchange could be reopened at all. Some little time elapsed before anything further was presented on the subject, but by the end of August the flood of plans began and went on increasing until the Exchange resumed business.
On August 31st a communication was received from a well known "Statistical Organization" for "Merchants, Bankers and Investors" which said, in part: "In behalf of my clients, who are exceedingly interested in making it possible for the Stock Exchanges to open safely, I am getting the opinion of important bodies relative to the proposed legislation suggested on the enclosed slip, or any other which you think would serve the purpose." On the enclosed slip was the following proposed legislation "to enable the Stock Exchanges to open."
"Be it enacted: That until the President considers European conditions fairly normal it shall be a misdemeanor in this country to buy, sell, transfer, give, or accept as collateral, shares of stock or evidences of indebtedness extending over one year, unless accompanied by a certificate showing that the owner is a United States citizen, together with such evidence as the Secretary of the Treasury may require that the securities have been owned by United States citizens since July 30th, 1914."
In answer to this proposition the Secretary of the Stock Exchange sent the following reply:
"Answering your letter of August 29th, 1914, I am instructed by the Special Committee of Five appointed by the Governing Committee to say that in its opinion such legislation as referred to would be ruinous to the credit of the United States throughout the world for many years to come."
In September a letter was received from a Western banker suggesting that the slogan "Buy a share of stock" if started "would achieve success, and by so doing would greatly benefit the stock market situation. This movement would have to be started so as not to create the impression among the many thousands of people it would reach, that it was merely a movement for the purpose of benefiting the stock brokers, but that it would be instrumental in relieving the strain on every conceivable business. Were such a movement accepted, and should it meet with results worthy of the plan it would be found out when the smoke clears away that American people would own American railway and industrial shares. This could be only for the great benefit of this country but for Europe as well, for the reason that if Europe knew that there was a good absorbing power here it necessarily would not dump its stocks at frightful sacrifices."
In October a junior member of one of the big private banking houses appeared personally and stated that, in his opinion, both domestic and foreign security holders should be treated alike; that sales should be conducted as usual; that on reopening transactions should be restricted and only sales be published and no bids or offers. His idea of restriction at the start was that all stock purchased should be paid for on the basis of 10% cash and the balance in certificates of deposit for cash, which certificates were to be non-negotiable except between banks. A Committee could, from time to time, remove the restrictions from such securities as seemed no longer to require them. The banks should be asked to agree not to call any present loans and to be very sparing in calling for margins.
Close upon the heels of this plan came a letter signed "A Friend of the People" which said "Let the Stock Exchange be opened strictly for the sale of American securities held by foreign stock holders. If they wish to throw their stocks over we can buy them at our own price. After six or eight days' selling from Europe the Exchange could be open to the world. By that time the market should be on a rising scale and safe for all."