sion.

Immediately after the closing the President of the Exchange visited
the prominent bank president who had served notice at the last moment
of his disapproval of this procedure. He was found in his office in
consultation with a member of one of the great private banking houses.
Both the bank president and the private banker agreed that, in their
opinion, the closing had been a most unfortunate mistake. It was an
opportunity thrown away to make New York the financial center of the
world. The damage was done and would have to be made the best of, but
had the market been allowed to open the banks would have come to the
rescue and all would have gone well. These gentlemen admitted that the
Exchange was to some extent excusable owing to the negligence of the
bankers in not notifying them that they were ready to protect the
money market.

It may safely be stated that within twenty-four hours after this
interview neither the two bankers in question nor any one else in Wall
Street entertained these opinions. The rise of exchange on London to
$7--a rate never before witnessed; the marking of the Bank of
England's official discount rate to 10%, accompanied by a run on that
institution which resulted in a loss of gold in one week of
$52,500,000; the decline of the Bank's ratio of reserve from the low
figure of 40% to the paralyzing figure of 14-5/8%; together with the
fact that the surplus reserves of our New York Clearing House banks
fell $50,000,000 below their legal requirements, were reasons enough
in themselves to convince the most skeptical of the necessity of what
had been done.

The frightful gravity of the situation which had arisen became clearer
and more defined in people's minds a few days after the first of
August than it was on the morning of July 31st. European selling had
been proceeding for some time before the outbreak of War and in the
last few days before closing had been temporarily arrested by the
prohibitive level of exchange and the risk of shipment at sea. The
American public itself, however, was seized with panic on the evening
of July 30th, and on the morning of July 31st brokers' offices were
flooded with orders to sell securities for what they would bring and
without reference to values. Had the market been permitted to open on
that Friday morning the familiar Wall Street tradition of "Black
Friday" would have had a meaning more sinister than ever had been
dreamed of before.

In all previous