Any decisive step whether right or wrong always finds its critics. There were a few people who criticised the Exchange for closing too soon and thought that the feeling of panic was increased by this action. These few were mostly converted from their opinions as the situation became clearer. There was a larger number who took the ground that the Exchange had not closed soon enough, and urged that had the step been taken a few days sooner a considerable decline in values would have been prevented. It is strange that the latter critics did not stop to reflect on how great an advantage it was, all through the anxious days of August, to have had the New York market liquidated as far as it could be without disaster, and the level of closing prices relatively low. How vastly greater would have been the task of safeguarding the situation in the face of declining prices in the "New Street Market" had the closing prices on the Exchange been ten or fifteen points higher. The truth is that the Exchange was closed at the very best possible moment. The market was kept open as long as liquidation could safely be carried on (thus immensely diminishing the pressure to be withstood during the suspension) and it was closed at the very instant that a collapse was threatened.
The above facts suggest some reflections with regard to the agitation for governmental interference with or control of the Exchange. The act of closing necessitated the prompt decision of men thoroughly familiar with the circumstances in a period of time actually measured by minutes. If it had been necessary to reach government officials unfamiliar with details, convince them of the necessity of action, and overcome the invariable friction of public machinery, the financial world would have been prostrated before the first move had been made. If the Exchange had been an incorporated body, and had been closed in the face of the difference of opinion and possible conflict of interests that existed at the time, it would have been possible for a temporary injunction to have been brought against its management restraining its freedom to meet the emergency. Long before the merits of such an injunction could have been argued in court the harm would have been done, and ruin would have overtaken many innocent people. The full power of a group of individuals thoroughly familiar with the conditions to act without delay or restraint prevented a calamity which can safely be described as national.
It is a fact, which will probably never be appreciated outside of the immediate confines of Wall Street, that the Exchange was unexpectedly thrown into a position where the interests of the whole country were put in its hands, and that through the prompt and energetic action of the thirty-six men who faced the awful responsibility on July 31st financial America was saved. It is true that in saving the community they saved themselves, but so do the soldiers who win upon the battle-field, and in neither case is the obligation cancelled by the selfish considerations involved. When in future the perennial outcry against the Exchange is being fostered by those whose minds are exclusively occupied with the evils that are inseparable from every human institution, let us hope that once in a while some friendly voice may be raised to remind the world of July thirty-first, nineteen hundred and fourteen.
CHAPTER II
THE PERIOD OF SUSPENSION
During the same morning on which the momentous action of closing was taken the Committee of Five met and elected the President of the Exchange as their Chairman. The acute crisis was over, the danger of a cataclysm had been averted, but the situation that remained was big with problems full of menace and uncertainty.
Just what effect the closing of the market would have was a matter of doubt. On all previous occasions when the facilities of the Exchange had been inadequate, or had been shut off, an unregulated market had established itself in public places and proceeded uncontrolled. Thus during the Civil War, when the volume of speculation had completely outgrown the limited machinery of the old Board of Brokers, a continuous market developed partly in the street and partly in a basement room called the "Coal Hole" and flourished during the day, while in the evening it was continued in the lobby of the Fifth Avenue Hotel. This market did more business than was done upon the Exchange itself, and a few years after the War, many of its members, who had organized into the "Open Board of Brokers," were admitted to the Stock Exchange in a body. The suspension of business in 1873 was too brief to allow of the formation of a market such as the above, but, while it continued, cash transactions for securities were being carried on every day in the financial district.