The morning Astorian. [volume] (Astoria, Oregon) 1899-1930, 1907-11-21
REAL CAUSE OF THE
STRINCENCY
AN AsT0RIAN REPORTER GETS
WORD FROM AN UNDISPUTED
AND AUTHENTIC NEW YORK
SOURCE, ON THIS SUBJECT.

pu0k WY tHio souHtiy, nv ~ eWtc
when everything seemed prosperous,
when business was never better In all
lines Of industry. should in the short
space Of week. be entirely turned
around, 10 far as money matters are
concerned. Ia a question which we have
all tried to reason out, and the varied
opinions that have been offered by every
one differ very materially; so much so.
that one cannot come any nearer to
the solution than when II first started.
However, an Astorian reporter met a
prominent New Yorker. who was at one
time o member OF the Consolidated and
Petroleum Exchange, on Wall street.
and well yersed In Wall Street affairs.
who. while not expressing an opinion
as to the real causes, on account OF bis
absence from the storm center, kindly
showed a letter he had just received
from his brother, who Is at the head Of
one Of the most prominent brokerage
houses In New York, giving his opinion
as to the cause. and what happened.
Being facts from the inside Of the
ring, il will doubtless throw some light
on the question, and being also. from
a prominent man in financial matters
who comes In daily contact with the
powers that be- its authenticity can.
not be questioned We quote in part;
II have your letter asking about the
trouble in the WALL street. This Is
what happened: We had quite de-
cline due to Roosevelt's calling the pub
lies attention TO the frauds the cor.
porations have been perpetrating for
years; at about the bottom c. w. Morse
unloaded his United Copper tpool hold.
ingsl and Otto Heinze & Co. tried TO
make him buy back in the open market.
He sold United Copper to 81; Heinze
put it up to 90 Gross and Kleeburg did
the business on the curb and Heinze &
Co. could not take the stock. Both as
signed. +. Augustus Heinze, brother
OF the other one, was President OF the
Mercantile Natl Bank and borrowed
their money on United Cooper around
so to protect himself. United went to
"a which it still is. The Clearing House
Committee forced him to resign also
G. w. Morse to get out of all the banks
he was interested in. and in week mad
forced out every bank president or dir
ector who was known TO have promoted
any wild cat enterprises. Runs started
on nearly every Bank and Trust Com
pany. The Knickerbocker Trust Co.
was allowed to bust; the Trust Com
pany stood with outside help) run
that lasted IL days. 1t is said they paid
out $70,0OO000. Quite number OF
small banks and trust companies were
forced to close Most OF them are SOL
vent but could not raise ready money or
sell their holdings. Money loaned at
$50 per cent and for days was at 20
per cent. Cash is still at premium
and so is gold naturally.
THE examiners came down (both
State and NationaD, and went through
all the institutions. Every one who had
broken the law and borrowed their own
institutions money for speculation or
promoting purposes was sold out and
forced to resign. There was nearly 100
OF these Napoleons disposed Of 1T
WAS THE LIQUIDATION OF THESE
LOANS THAT MADE THE Low
PRICES. 1t was distinctly a RICH
MANS PANIC. do not think the pub
lie suffered much but they followed a
good deal and hoarled money which
makes things bad.
"You can size things up from what /
have written and can understand how
things are. 1t is general cleaning up
and shake down.
81, P. Morgan is in control of every
National bank in New York and he has
forbidden any short selling and all
margin business end everybody obeys.
If they should not, they could not Dor.
row any money at any rate. They keep
tab on how much everybody borrows
and you could not borrow dollar out
side of the Exchange to save your soul.
However, think the worst is over now.
hope have answered all of your
questions and made things clear. One
trouble brought on another and the
liquidation was enormous, and every
body who did not have strong backing