Willmar tribune. [volume] (Willmar, Minn.) 1895-1931, 1903-07-29
4 DANCER TO ThE COUNTRY.

WEDNESDAY. JULY 20, 1908.
| 4 DANCER TO ThE COUNTRY.
In the midst of this unparalleled
prosperity" we are threatened with a
panic. With the railroads, doing the
biggest business in their history and
earning big dividends the railroad
stocks are tumbling down in value
every day and havereached the lowest
point recorded for years. With the
industries overcrowded with work and
prices of products ruling very high
the Industrial stocks are following the
railroad stocks in their downward ca
reer. Millions of paper 'values''
have been wiped out and thousands
of speculators have lost heavily.
Three large Wall Street firms have
failed so far, and there is no telling
where it will end. If some of the New
York banks should be forced to sus-
pend there may be run on the rest of
them and panic may be started that
will sweep over the entire country.
This is certainly an anomalous con
dition. We are producing wealth in
this country at a rate fully up to the
normal, and are receiving for it prices
above the normal. Yet this entire
machinery of wealth production may
be thrown out of gear by factor that
has nothing to do with either produc-
tion or distribution. AS far as pro-
duction and distribution is concerned
Wall Street might just as we'll not ex-
ist. It is speculative center. Gamb-
ling is the principal occupation of it's
denizens. But the gambling done
there is far more dangerous to the
country than the gambling institu.
lions that hide away in the lower re-
gions of the cities or flourish under
the protection of corrupt municipal
governments. The latter may ruin
individuals; the former threatens the
prosperity of the entire nation. Wall
Street speculators gamble with the
peoples money. The banks of the
west deposit large portion OF their
reserve funds with banks in the larger
cities, and these in turn deposit their
reserves in New York banks. Wall
Street speculators borrow this money
on stocks and bonds as collateral.
AS long as speculative values remain
intact this money is fairly safe. But
let something happen to cause de-
preston in speculative values and
thousands of these spectators will
make mad rush to unload their
stocks. Then prices break wildly,
and soon some of the securities may
fall below the price at which they are
held as collateral. The bank is the
loser, and when it becomes known that
a bank is the holder of large amount
of such securities there will be a run
on the bank. 1t fails, because no
bank can hold money enough in re-
serve to pay at once it's outstanding
obligations. The reserves of other
banks are thus tied up, and the wave
may spread to every corner of the
land.
What has caused the trouble in
Wall street now? Partly over-specu-
latiou in trust securities that contained
more water than real value, partly
our financial system, which relies on
chance and the will of few corpora
tions to furnish the increase in the
money volume necessary for the
growth of business in a rapidly grow
ing country. Chance, in the way of
gold discoveries, furnishes the basis
OF our money system. Not only may
the production fail to keep up with the
demand, but other nations may call
on US to furnish them great part OF
our gold. To supplement this uncer.
tain supply of money we have the
national bank sy stem, which may or
may not choose to increase the sup.
ply OF money. At present these banks
are working for change in the law,
so as to enable them to issue and with
draw money at will. We have now 8
provision limiting the amount o.
national bank notes that can be with
drawn and redeemed each month
They want this restriction removed
and are going to give US an "objec
lesson" in order to compel congress-
to do their bidding. The money sup