Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1906-08-05

in eastern banks and trust companies. As
| for the savings banks they also were in a
position to respond to all ordinary demands,
and in fact, as the records show, both saw
| ings and commercial banks were in regular
receipt from depositors of more money than
| they were Ncalled on to pay out This
| money, moreover, was nearly all San Fran
cisco, or at least California, money, for
California has always been financially indie
pendent There has been an important flow
of money to this state, but for the most
part it has been money for investment. and
not money for loans. So the banks felt
strong because tho community was rich
and prosperous.
stricken by Disaster.
But the four days from April IS to April
| q completely and disastrously changed the
| situation. Property to the amount Of hun
| dreds Of millions Of dollars, belonging, In
| the main, to depositors in the banks, was
| obliterated. The vaults of the banks were
inaccessible, and whether they would pro-
| tect the money, the securities and the
records which they contained could not be
| certainly known. That thousands Of de-
positors would be in sore need of money
was self-evident./ Should there be any
doubt OF the ability of the banks to pay,
the great mass of depositors would be
clamoring for their money. Nor was this
all, or the worst. OF the Indebtedness OF
| the banks, payable on demand, $iO,9 ,6S4
was due to banks and bankers, mainly to
| those in the territory financially tributary
! to this city, whose bankers habitually keep
large balances here, just as our banks
keep large balances in eastern money cen
| oil Of
banks would impair the resources of the
country banks whose balances were in this
, city, and It was evident that 1t would take
| but a trihe to start a panic. which might
| involve a run on every bank on the Pacific
| coast and cause a sacrifice Of property and
values whose disastrous results might en-
dure for years. AS a matter of fact the
banks Of the state are prosperous, and
| Il Is not likely that the loss Of their entire
balances IN this city would have more than
| temporarily crippled them, but the public
| knows little about the banking business,
and when a money panic is once started,
the people make little use Of what they
| do not know. They do not reason. They
clamor for their money. and the more GER
tain they are that they cannot get 1t, the
louder they cry for 1t. For a few days the
financial stability of the Pacific coast huns
| in the balance. That a most disastrous
| panic was averted was due TO the con-
summate ability with which the fnanciers
Of this city, aided by those OF eastern
money centers, the United States treasury
and the press OF this and other cities
queted the public mind. gradually restored
confidence, strengthened the cash resources
Of the banks, and generally so organized
and directed public sentiment that when
the banks resumed business they did SC
without the least ripple of excitement, with
no more attendance at their counters than
on an ordinary business day, and with de-
posits. on the first days, generally exceed
ing Withdrawals.
Resources of the Banks.
The commercial banks of the city had
available SOC, 49, 1913 of marketable securi.
ties and money on hand or due from
banks and bankers with which to pay
316s, 100 sSs Of possible immediate demands
while the savings banks had $6S 253, 995 cash
and marketable securities with which C
meet within sixty days possible demands
for Sl66,46 ,254. 1t also appears that de
posters were secured, in the case of the
commercial banks, by $55214,5O2, and in tn,
case OF the savings banks by go
capital and surplus. In case of liquidation
deposltors would be paid before dollar Of
this money could be returned to stock
holders, 80 that depositors in the banks
who understood the situation could have
no fear as to ultimate repayment of theil
deposits as there was and is no question
OF the judgment of the bankers in making
investments. But besides the quick assets
the banks had loans outstanding, in tn,
case Of commercial banks, soon to becom,
due as follows:
LOANS PAYABLE TO SAN FRANCISCO
BANKS.
State commercial banks dncor-
| porated ACKNOWLEDGEMENTS. 1b,I4s,b9
National banks .....,............... 54,954, 80
Private banks ......''..'...,.'.'.... 264SSl
Total. .tl34 346 %
Savings banks ....................... lO9,6S1,S9
Besides these loans the banks had larg,
sums invested in bank premises and rea
estate taken for debt, with some minol
Items OF resources, so that the aggregat,
resources were in excess of all possibl,
demands by many millions OF dollars.
Things. however, were not quite so baC
as at first thought they would seem. II
the first place, the heaviest depOsltors wer,
men OF large affairs. Many, perhaps mos
OF them, officers and stockholders in tn,
banks. and who fully understood tina
their own safety lay In Strengthening tn,
balances In this city, we're for the mos
part wise enough to take the same view
and could be depended upon not TO checl
heavily on their accounts. Finally tn,
depositors in the main were the borrower
from the banks, and, a rule. would
understand that IL they expected, as manl
OF them would need renewal OF their notes
IL would be wise to refrain from aiding
to put the banks In position where sucl
renewals would be impossible. There wa
also the influence OF the press, which re
Aected the indomitable courage OF tn
community and confidence in the insur
ance situation, which was very helpful a
tho time. even II rather stronger than eK
perienee has justified. So there were ia
vorable as well as unfavorable aspects 4
the situation, and the bankers Of the cit!
never for one moment lost their nerve
Nevertheless, they fully appreciated tn
gravity Of conditions and recognized tn
danger that a money panic might occur