The Scranton tribune. [volume] (Scranton, Pa.) 1891-1910, 1899-12-20
Wall Streets FURRY.

~ UT OF THE multitude OF
reasons given for Mondays
panic on Wall street two
may be selected as deserving
VI consideration apart They entered
specially into the suspension of the
Produce Exchange Trust company and
perhaps largely influenced some of the
Dther pinChes.
The first and greater of these was the
belief that considerable imitation had
taken place in the securities or some
Of the big Industrial combinations or
trusts" lately formed. The letter of
Edwin Gould explaining his position as
4 director of the suspended trust COM
pany brought out clearly his belief that
IN issuing syndicate loans to an amount
almost equal to capital and surplus the
trust company had skated on thin ice.
It had paid out good money in return
Tor paper which might or might not in
q time of emergency, show up well as
security; the speculative element had
entered into the transaction to de-
gree deemed unsafe by him and it
would seem that his judgment stands
vindicated by events. The lesson in
this unfortunate incident has wide
spread application.
The second reason has to do with the
exceptional power of the Clearing
House association. This power toward
the last, was put forth in rescue Of
the market. But did it, before that,
consciously or uncOnsciously, help to
bring on a crash? AS bearing upon
this question we quote from the New
York suns account of the Produce EX-
change Trust company's suspension:
One of the most trusted employees of
the company, who has known all about
the condition of the concern from its or
ganization, told a Sun reporter yesterday
that it was, in his opinion, doubtful if
the company could have continued to do
business for great length Of time in the
face of the hostility of the clearing
house banks. He said tnat the company
had made a mistake in resiguing from
the clearing house association and in
fighting the policy of the association of
charging for the collection of out-of-town
checks. When the clearing house, about
July !, decided to make this charge, the
Trust company resigned from the asSo-
over the country that it would collect
out-of-town checks free of charge. This
brought n large amount of out-of-tOwn
business to the lIust company, but it
also brought the ill-Nill Of the clearing
house banks. This hostility, it was said,
was not felt by the Trust company until
holders of its stock tried to borrCw
money on the stock as collateral. 1t
was said that as often as the stock was
offered as collateral for a loan at a
clearing house bank the collateral was
refused. This soon became known in
Wall street and led to the first rumors
rejecting upon the Company's stability.
OF course, this statement may be
biased, and there is the further posi-
bility that the clearing house banks
were entirely justified in refusing coll
lateral about which there may have
existed, to the banks knowledge, rea-
sonable doubts. From this distance we
cannot determine these points. But if
the foregoing statement is true and if
the collateral offered and refused was
good; in other words, if the clearing
house association used its power delib-
erately with a view to compelling out
side banks or trust companies to con-
form to it's practice in respect to charg
ing for the collection of out-Of-town
checks, then a situation exists which
apparently calls for attentive consid-
Grafton. The public is not prepared to
suffer artificial disturbance of it's busi-
ness relations because of a row be-
tween banks, and it may yet insist on
stronger safeguards if it shall appear
that these are needed
AS to the panic in general, it denoted
nothing alarming to substantial indus,
try or commerce, but rather a mere
vent to overspeculation. The man who
keeps out of stock gambling need nos
on account of it, waste a wink of sleep