The Ketchikan miner., 1907-11-30
THE FINANCIAL SITUATION
 fThe Outlook)

THE FINANCIAL SITUATION
 (The Outlook)
 A feeling of encouragement as to the financial and commercial situation of the country is justified by the fact that month has gone by since the acute panic in New York City without the appearance of the general disaster which threatened the country. Al though investment securities are still low--and the securities market affords very good barometer for measuring general confdence-they are in gener- al holding their own and in some in- stances have risen. The banks through out the country are exercising great care over the currency at their com mand. Clearing House certificates and other forms of credit tokens are being used in New York and other large centers; and in some instances it IS probable that gold and currency notes are being withdrawn from banks and hoarded in safe-deposit boxes or other private hiding-places. But there is
 no real currency famine, and interest rates have gone down. If there is combined with proper caution, econo- my, and sound judgment, reasonable confidence in the innate honesty and ability of the bankers, merchants, and industrial managers of the country, there is no reason why the country should not successfully pass through the present disturbance and arrive at state of more genuine, because juster and more healthful, prosperity than it has known for long time. It appears to us that two legal steps and one mor- al step are needed to prevent the re- currence of a general breakdown in ! confidence such as we have been pass l ing through in the past ten days. First, there must be some prompt and ! effective Legislation which shall pro- vide the country with safe and elas tic currency. There are two plans for modification of the currency laws which Congress ought immediately to considerable American Bankers plan and the plan of Mir. Treat, Treasurer of the United States. The Outlook has heretofore described these plans in detail. Second, there ought to be some revision of our banking laws. The State should not permit, as it does at present, two kinds of banks of deposit to exist. National and State banks today in New York are requir- ed to maintain a reserve of twenty five per cent, and to make weekly and public statements of their affairs. The trust companies, on the other hand, while they are permitted to receive deposits as freely as the banks, need only to maintain reserve of fifteen per cent, and make only voluntary statements. The trust companies were originally invented, as the term inn plies, to act as trustees and agents for estates, corporations. or individuals. They have gradually assumed the functions of banks of discount and de- posit. Some of them, taking advant- age of their freedom from legislative restriction, have invited large deposits by the offer of comparatively large rates of interest to the depositor, and have used these deposits in industrial and financial enterprises, often of a very risky nature, with the hope of getting large profits. Is it not perfect ly obvious that all banks of discount and deposit should be carried on un- der the same legal restriction? In the third place, the moral reform needed is the bringing of all bank directors to belief that they are trustees for their depositors just as truly as the trustees of an estate or a philanthropy ic institution are responsible for the welfare and protection of their bene- fciaries. That it is possible to bring about such moral attitude is proved by the history of savings banks. The savings bank president or trustee who today connives at or permits, even through ignorance, the wrecking of his bank, is looked upon with scorn by his colleagues and his community. There are indications that the time is not far distant when the position of dictatorship in any public or semi public corporation will carry with it all the obligations of trustee towards his ward. When the necessity and propriety of such trusteeship grow to be generally recognized, not only in banks, but in the street and inter- State railways and other public utility corporations, we shall have fewer financial panics. '' That this idea is not an impractical one is indicated by the definite attempt of Mayor John- son, of Cleveland, to organize street railway corporation in which the directors shall perform their duties for the benefit of the city in exactly the same spirit in which the directors of the Metropolitan Museum of Art fill their positions and exercise their functions, without the slightest ques- tion of their unselfsh public spirit.
 NOT SERIOUS