The Anaconda standard. [volume] (Anaconda, Mont.) 1889-1970, 1899-12-26
The Panic and It's Cause.

The financial difficulties in New York
and Boston seem to have been tided
lover for a while, and it is to be hoped
permanently. The permanency. how
sever, is by no means certain, for the
events Of the last week show most
,conclusively that the monetary situa-
ttion is highly strained and the end of
isuch q condition can never be accur-
lately foretold.
Certain it is that nothing but the
lrrompt action of the clearing house
lin Boston and the associated banks in
New York averted panic that might
lhave assumed the most disastrous and
jfar-reaching character
The break in stocks, itself, while it
losses to others, has been a strong fac
Ior in relieving the intense strain. Just
at the time of the break, when prices
were going down at ruinous rates, of
course the demand for money was
intensified. as was shown by the
fact of call money advancing to
one-half per cent. day, equal
per cent. per annum. But as soon
as the forced liquidation was over
that is, when the weaker holders were
compelled to let go and sell their stocks
prices settled to a lower level, and
smaller amount of money suffices to
carry them.
Now that the immediate danger
seems to be past, all sorts of explain
ations are being offered as to the
causes of the embryo panic. The one
most generally current is that it was
forced by the Rockefellers in order to
secure for the Amalgamated Copper
company the control of the Boston &
Montana. 1t is entirely possible that
this may have been a factor in the
situation, but it seems absurd to be-
lieve that it was the main cause of
the trouble.
Primarily, it was a monetary strin-
gency, not so much immediate, per-
haps, as prospective. A well grounded
fear that money is going to become
tight is more potent in creating panic
conditions than an actual stringency,
a rush to get out from under their
loads before it is too late, while when
the money market actually closes up.
the aim of everybody who can, is to
hold on for a brighter day.
With a six-per cent. bank rate in
London and a seven percent. rate in
Berlin, 1t is idle to deny that the strin-
gency is general at the great money
centers. This simply means that the
money supply is insufficient to sus-
tain business at the present range of
prices. If the shortage We're only at
eone point, it might be ascribed to local
causes, but when England, Germany
and the United States are all pinched
lat the same time it is self-evident
that there must be a general insult
.flciency.
Obviously, the Rockefellers cannot
sin fairness be held responsible for an
all-around stringency in the money
markets. The explanation offered for
the pressure in New York is that the
money which went out into the coun-
try to move the fall crops has not re-
turned with Its usual rapidity, but that
only goes to emphasize the fact that
the total supply is short.
In years past when the argument
was made that more money was need
ed for the business of the country
New York has pooh-poohed the idea,
pointing to its large bank reserves and
low interest rates to prove that there
was an abundance. Very true, there
IS always an abundance in New York
when the rest of the country has been,
Ia a great measure. drained of it's
funds; but when that small portion
OF the United States which lies more
than half a mile from Wall street is
just reasonably well supplied the New
York fnanciers set up a cry of dis
tress. and usually turn to the United
States treasury for relief. An abund-
ant supply of money means not mere
" enough for Wall street, but for the
entire country.
There can be no reasonable doubt
that the Transvaa! situation is at the
isatI N Of the trouble. The supply Of
gold from that quarter has been sud