The farmer and mechanic. [volume] (Raleigh, N.C.) 18??-19??, 1907-11-12
Bank SouLd and Gold
Coming in BoIdster Faith
STATE ROT DESPERATE
The Influx of Money VIII Result ian IA
Renewal OF Confidence i'm Banks
That Have Aitastood Pressure,
"a Cessation OF Hoardin-
and An Elasticity
OF Credit.

New York. Nov 9-Henry Clews
has issued n letter on the financial
situation which. while admitting the
seriousness Of the general situation.
sees Ia the IMPORTS OF gold and the
fact that the panic" has So far
progressed without reallysserious re-
suits to the country generally reas-
enable hope for substantial recovery
of confidence.
In part Mr. Clews says:
"A much better feeling exists in
New York owing very largely to two
circumstances: first. the engagement
Of over $4,000 900 of gold. and sec
ond, the saving OF two big trust COM
panies from suspension. other fac
tors also tended to give relief. such as
the clear headed control OF the situa-
ton exercised by strong financial
leaders and the timely assistance rem
dered bv the Government at Washing
ton. In consequence % these develop
ments the security markets though
quiet. have shown substantial re-
covery, thus materially facilitating the
liquidation which has been necessary
in various quarters.
Now that the worst is over the
universal question asked Is. what must
be now expected? All previous panics
show that after the acute stage of
crisis was passed a substantial recov-
cry followed on the Stock Exchange.
to be succeeded by a period OF mor,.
or less inertia and depression. There
is no reason to anticipate any de-
parture from this rule in this panic,
although the conditions are not pre-
cisely similar to those of previous
crises The one saving feature in the
situation is the general soundness of
our banks, These institutions, though
in the past not always managed on
"a lines n CT
as whole eminently sound and have
endured the tremendous strain of the
last few weeks in splendid fashion
THE effects of the financial disturb
ance are now extending into the COM
mercial world. For self protection the
banks are compelled to materially re-
strict their credit operations Many
business concerns will consequently
have much difficulty in renewing OBJ
legations, and business will naturally
be compelled to contract more or less
in accordance with the restriction Of
credit. How far this contraction will
go and with what consequence it is
impossible to predict, but the sooner
the fact is recognized that general
business must take its share Of the
present depression which has fallen
upon Wall street the better for all
concerned. Everything rossibie
should now be done to rebuild con-
fdence and credit. Hoarded money
should be restored to the banks in or
der to enable them to better grant the
accOmmO Odations which it is their bust
ness to furnish II is sheer folly TO take
money out of the banks and hide II
in stockings or safe deposit boxes II
Geposit0rs are unwilling To invest tneir
funds they should put them in SOUND
banking institutions. of which there
are plenty, and not deprive the com
rqunitv Of the life blood of commerce.
/, If,,cy bs hn nl in n
the banks, 50 that the latter can exer-
else their legitimate functions of Civ
ing credit and recovery viii be quick
ly expedited.
Cold imports viii do much TO re-
lieve the situation and the further
expansion OF the currency now con-
tenDlated viii temporarily counteract
the boarding tendency. but the limit
of assistance from these sources has
been almost reached We must now
look for liquidation IN other direc-
tons Commodity prices must decline
and we will be forced to find mar
ket for al the surplus products
wheat cotton, etc.-even at the ex-
pense Of lower prices, if necessary. 1t
is only by such contraction and by
bringing our markets down to a lower
and more normal ,levei that we can
aevrt further disc Or This process
Of read iustment may be unpleasant
but it is inevitable and will in due
season put the country on better and
stronger be sis for fresh forward
movement. While there are no
prospects of easy money for some time
to come. the stringency shows some
signs of abatement. We have now
drawn more than $4,000 600 OF gold
from abroad which is eirg scattered
al over the United states. In some
quarters il is anticipated that the i'm
ports will increase to S50.0o0.O00. but
that depends on the course OF affairs
abroad The advance Of the Bank Of
England rate to the unusua figure Of
per cent is significant 1t is the
highest rate since 1873. The advance
by the Bank Of France to per cent.
are also signs THAT the foreign mar
kets have parted with about as much
gold as they can affori, Perhaps we
European assistance especially as
Europe has difficulties of its own to
meet There is more or less danger
of a crisis in Germany where there
has been great Industrial expansion.
Pargi has shown much willingness ta
help London. thus placing the lat
ter in position TO aid New York.
but II is quite evident that we have
almost run TO the limits Of our tether
in getting gold from Eur0pe The
bulk Of hi sgold will soon be in the
banks enabling the after TO extend
their credits TO the extent Of between
$50. 900 and 100000, 900"
TOOK EVERYTHING IN SIGHT.