The Evening statesman. [volume] (Walla Walla, Wash.) 1903-1910, 1907-10-30

solute elimination of spectators from
4 the directories of our banks and our
trust companies is a prime essential to
n the restoration, of confidence. AMI for
q tunately this fact seems to be recog-
nized by both the clearing house COM
. mittee and the great bankers upon
whom control of the situation has fai-
lien. Banking reform, however. should
no rest here Our banks should re-
strict their operations more strictly 10
the legitimate functions of banking.
They should be free OF all suspicious
| alliances; corporate influences should
be closely guarded against; sound prin-
ciples should be faithfully adhered to-
and higher standards of integrity in
management should be insisted upon
by plainly expressed public opinion.
Depositors have it in their power to
stimulate reform by showing their pref
/ erence for institutions controlled by
men of unquestionable ability and in
tegrity; placing their funds only where
sound banking and high standards of
conduct are the first considerations.
General Reform.
But reform must not be confined to
the banks. The trust companies have
thus far escaped many of the restraints
/ which have tended to safety in the
banks; and it is just here where lies
the weakest spot in the situation. Trust
companies are lacking in any such as
| IL x&rhi
not only secures valuable cooperation
in times of emergency, but also eXer-
cises wholesome and necessary re-
straint upon their regular operations.
Confidence in clearing house banks is
strengthened, not SO much by the pc
riodic visits Of the national bank exam
liners as by the unexpected visits of the
associations own examiners, which act
as continuous safeguard and keep its
members closely Informed as to the
general soundness of each Institution.
The trust companies have no such or
ganization. To very considerable ex-
tent their operations are mystery,
and the occasional visits of the state
examiners are generally anticipated
and prepared for.
Unfair Competition.
| The trust companies of New York
should organize themselves as closely
as possible upon the lines of the New
York clearing house. They should ap-
point competent examiners and arrange
o have them visit different Offices when
least expected. Then the trust COM
panies would themselves have a bet
ter knowledge Of their general cOndi-
ton. and be better able to give assist
ance in times of stress to those who
are sound, or to withhold it from those
which were unsound. Such an associa-
ton as this might have prevented the
present crisis. Among the reforms
which may be Necessary in banking,
none are more urgent than in the trust
company situation. and the sooner
steps in this direction are taken, the
sooner will public confidence in these |
institutions be restored. Trust COM
pany competition with the banks is
now upon an unfair and unsOund basis,
and the banks are justly weary of talk
ing care of their rivals whenever they
get into difficulties
New Era of Reaction.
The stock market stood up splendidly
against the recent storm. Fortunately,
liquidation il, the security markets
has streng. hened the market against
further attacks. There is now no room
for panic. The effect of this collapse
has no doubt reached the climax in !
financial circles, and it now remains to
be seen what the effects will be in in
dustrial and mercantile circles. 1t is not
% be supposed that the process of re-
adjustment is complete 1t is likely to
go on for some time to come. Probably
some recovery may ensue later on in
the security markets. but the fact that
we have fairly entered in:O an era of
business reaction may as well be ac-
cepted. Contraction must follow, and if
commercial embarra ssments multiply
they must be accepted philosophically
as a part of the general reaction.
Prices in the commodities markets will
now have TO take their share of the de-
cline. Extravaganza will cease and
economy will become the order. of the
day. New enterprises will be sus-
pended for some time to come and there
will be lessened demand for both
commodities and labor. This part of
the process of readjustment will be un
welcome, but it is inevitable and is the
only way for a substantial reestab
lishment of confidence BY means of
such adjustments we should reach a
lower and more stable basis for a bust
ness revival later on
The Worst Is Over,
/ One important fact should not be
overlooked. Our crops are bringing
profitable prices, and there is sure to
be a good demand. both foreign and
domestic, for all that our farms have
| produced. This will prove valuable