Daily press. [volume] (Newport News, Va.) 1896-current, 1907-12-31
CRITICAL Stage FOB THE BANKS
They Were Put to AbOus the soverest
Test in Their History Because of
the Lack of curenoy-Permanont
Effect Upon Them Has No. Yet
Been Reached.
tBy Associated Press)

NEN tOish, Dec. d0-The year
1907 has been one in which (here has
been much making of financial his
tory. II will go down with 1857. 1878
and 1893 rs one OF the nanic years
IN american finance. The year oven
ed with the feeling In conservative
quarters that speculation had already
been carried to an unwarranted height
and that prudence was imposed by
conditions upon bankers and capital
ISIS. But the extent TO which capital
resources had been strained was not
revealed In striking manner to the
general public until "tbe panicr of
Aiarch IA, now almost overshado@ed
by later events, but at that time one
OF the most serious and remarkable
breaks ever suffered. The loss, Of
~ points In Amalgamated Copper Jn
single day. 81 points in American
Smelling, % in Heading. and .25 il,
Union Pacific stiped Dit .idstsins.
compelled the calling or loans ana
wrecked the fortunes of many spec
uiators. The market recovered only
slowly during the spring and early
summer. to suffer new reactions in
August; but 1t was not until mid
october that the storm broke i'm all
its force with the collapse of the
corner in United States conner. the
appeal of the Morse-Heinz banks TO
the Clearing House for help and the
REFUSAL to extend such help until the
old control was eliminated.
The Knickerbocker Trust Company
was closed October % after paving
out about sS,OOO.OO0 in cash and
runs began upon the Trust Company
OF America. which called for the dis
bursement of S3i,OOO.000. and upon
the Lincoln Trust Company. which
suffered nearly proportionate loss
OF deposits. The suspension of cash
payments by practically all the banks.
and the decision of Saturday. Octo-
Der 26 to issue Clearing House Ger.
tiffcates on the following Monday,
marked the eliminating stages of the
crisis: Secretary Cortelyou hurried
to New York and deposited about
S3OO0O,0O0 of public funds in the
national banks of the city. Foreign
exchange, which had been adverse.
fell to the gold import point and by
November 10 tie engagements of
gold for import had reached 100000
600 and near the close OF December
to about s106,000,0OO. Notwithstand-
ing these measures OF relief the coun-
try banks and the public swallowed
I'M in the week ending November Q
about s60.O00,000 in currency. Gov
eminent deposits amounting to nearly
S3o.OO0.000 disappeared and a loss in
cash reserves of the banks of $780,
610,S00 was disclosed.
Critical Stage of Banks.
AT the same time the bank ana
trust company situation reached one
of its most critical stages. The ad-
vent of an extra holiday on election
day, afforded a breathing spell for
combination among trust companies
TO protect those upon which runs
were being made. and the announce
ment of this plan on Wednesday,
turned one of the most dangerous
points of the situation. 1t was not
until ten days later, however. that
Secretary Cortelyou announced mis-
plan for drawing money from boards
and permitting an increase in the
bank note circulation by the offer to
the public of s50,O00,0G0, two per
cent. Panama Canal bonds. and $780,
100000 in one year certificates bear
Ing interest at three per cent This
announcement, accompanied by a Wig
orous letter from President Roose-
velt, did much in the opinion of many
bankers, to stay the panic, so that
eventually 1t was necessary to issue
only about s25,OOO,OO0 of the bonds
and s15,00O.000 OF the certificates.
While these measures tended to
restore confidence to certain degree
there was no indication of the re-
newal of business activity for some
days.
The premium on currency which
had run as high as fourpe~ cent. con.