On November 13th, the Committee of Five ruled that:
"Unrestricted trading in Listed Municipal and State Bonds for domestic account may now be resumed, but that all transactions for future delivery must be submitted for approval, as heretofore, to the Sub-Committee of Three on Bonds at the Clearing House of the New York Stock Exchange."
On November 16th, Mr. Frank W. Thomas, Vice-President of the Chicago Stock Exchange and also Chairman of their "Trading Committee," appeared before the Committee of Five and stated that it was the intention of the authorities of their Exchange to meet on the coming Wednesday to discuss the advisability of opening on Monday, November 23rd. He asked for information regarding the attitude of the New York Stock Exchange in the matter of securities listed on both exchanges. The Committee requested him not to permit dealings in Chicago, in such securities, at prices below the minimum prices established in New York.
Thus one after another came the evidences of a sudden transformation in the financial conditions and of a consequent movement toward the resumption of business, all of which rested fundamentally on an immense increase of our exports and the resulting favorable movement of foreign exchange.
Encouraged by these happenings the Committee of Five actively took up numerous plans for letting down the bars. There had been for some time considerable pressure exerted by those members of the Exchange who were distinctively bond brokers, to have the bond business transferred from the Clearing House to the floor of the Exchange. They thought that this step would make a wider and more satisfactory market for bonds and that the supervision of the Committee of Three could be exerted in one locality as well as in the other. In view of the rapid improvement in conditions, and the fact that unlisted bonds had been given an unrestrained market by the dissolution of the Committee of Seven, it was thought that the moment had come for taking this step in advance. Preparations were at once set on foot to restore the restricted bond market to the floor and thereby insure that partial opening of the doors of the Exchange which would be the entering wedge to ultimate resumption.
Unfortunately the plans of the Committee in this regard were not sufficiently safeguarded. Through some unforeseen leak the news of their intentions got abroad, and brought on some awkward consequences. The first of these was the appearance of a private banker, the same one who early in August had predicted a long period of suspension, to protest against greater freedom in bond dealings. He foresaw terrible results if this rash act were permitted and claimed to have information that European holders of bonds were awaiting this chance to swamp the market. The Committee were not much alarmed by this gentleman's warnings and were proceeding with their nefarious scheme when a further warning was addressed to them. There was a certain member of a Stock Exchange firm who was on friendly terms with some of the Washington authorities, and who seems to have felt it his duty to see that the Exchange did nothing to give offense in these high quarters. When this individual learned what the Committee had in mind he sent word that it would be prudent for them to let a particular government officer know their plans before putting them into execution. Thinking that this warning must be based on some special information the Committee at once authorized this gentleman to inform his friend in the Government of their plan. This was on Wednesday, November 18th, and the intention of the Committee was to place the bond market upon the floor of the Exchange on the following Monday. On Thursday this well meaning but somewhat misguided go-between reported that he had communicated with Washington and that his friend there had expressed the desire to see some member of the Committee before any further steps were taken.
This news hit the plans of the Committee somewhat after the manner of a submarine torpedo. They had everything in readiness for Monday, and the newspapers, which had also got wind of their intentions, had already announced to the public unequivocally that a restricted bond market would be started on that day. With such limited time to act in there was nothing to resort to but postponement and a notice was immediately given to the press in the following words:
"The Special Committee of Five states that while the plan outlined by the newspapers concerning a further extension of the present method of dealing in bonds was substantially that under consideration by the Committee, the magnitude of the interests affected has led to unforeseen difficulties which will necessitate further consideration. When a decision is reached ample notice will be given to the public officially."
A letter was at once sent to the Government official notifying him of the readiness of the Committee to visit him at his convenience, and the following day, Saturday, he very courteously sent them a telegram explaining that the suggestion of an interview had in no way emanated from him but that he had misunderstood the intermediary (who had communicated by telephone) and supposed that the interview was being sought by the Exchange. So this mighty tempest in a tea pot resulted from the excessive zeal of an outsider who while trying to pilot the Committee into safe waters succeeded in running it on a reef of his own creation.