The Birmingham age-herald., 1907-12-31
Weakness and Strength of the Financial System Is Clearly
 Shown
PERIOD OF STRINGENCY
 BORDERING ON PANIC
History of the Years Events Presents Interesting Facts Relative To Banks and the Power of
 United Resistance.

New York, December 30.-The year 1907 has been one in which there has been much making of financial history. It will go down with 1857, 1873 and 1903 one of the panic years in American finance, but despite the remarkable stress and strain to which the financial struc- ture has been subjected the year closes with conditions stronger and safer than they were when the year began.
 The year opened with the feeling in conservative quarters that speculation had already been carried to an unwar- ranted height and that prudence was imposed by conditions upon bankers and capitalists. That this feeling operated to some extent all throughout the year and that there was a scarcity of capital for absorbing new securities, was indi- cated by the diminished transactions in stocks and bonds on the New York stock exchange. While the number of shares of stock dealt in up to Christmas of 1907 did not fall below that of normal years, prior to 1905, it was very much less than for that year and for 1906. The banner year prior to 1902 was 1901, when the number of shares dealt in was 265,- 577,354. There was a decline to 160, 74S,36S shares in the depression of 1903 and re- 
 in 1906. The number of shares dealt in in 1907 fell to 195. 169, 192 The field of bonds in 1901 showed sales amounting to $999, ,404,920 which fell in 1903 to $6S4, 200, $50. The maximum was attained in 1904 when sales were $1 ,030, SIG, ,560, but was not greatly reduced in 1905 when sales stood at s1,OOS 190, ,420 Signs of exhaustion of capital were already afforded in 1906 by the decline of such sales to $670 0,S17 333 and finally to S561, ,651 BOO in 1907
 The source of the pressure upon the money market is indicated by the large issues of securities which took place dur ing several years prior to the crisis. The statistics compiled by leading financial Journal sa Brussels showed tf7tgthe tetais issues throughout the world averaged for the five years ending with 1906 about s. 400,000 900 annually. In the United States issues of stocks for the first il months of 1907 were $757. .359,5Oo and of bonds and notes s1 ,073 990,OO0, making a total of $1,- B31 ,349,5O0.
 "The Silent Panic"
 The extent to which capital resources had been strained was not revealed in a striking manner to the general pulp lie until "the silent panic of March H. now almost overshadowed by later events but at the time one of the most serious and remarkable breaks which the market has ever suffered. The loss of
  single day, 21 points in American Smelt- ing, 22 points in Reading and 25 in Union Pacific added to considerable previous de- clines at a slower rate. wiped out mar gins, compelled the calling of loans and wrecked the fortunes of many specula- tors The market recovered only slowly during the spring and early summer to suffer new reactions in August, but it was not until mid-October that the storm broke in all it's force with the collapse of the corner in United Copper, the appeal of the Morse-Heinze banks to the clear ing house for help and the refusal to extend such help until the old control was eliminated.
 Closing of Banks.
 Events moved fast on the heels of these revelations. The Knickerbocker Trust company was closed October 22 after paying out about &, 900 GOO in cash and runs began upon the Trust company of America which called for the dis bursement of S34,000 000 and upon the Lin coln Trust company, which suffered a nearly proportionate loss of deposits. The suspension of cash payments by practi- raily all the banks and the decision on Saturday, October 26 to issue clearing house certificates on the following Mon- Hay, marked the eliminating stages of the crisis. Secretary Cortelyou carried to New York and deposited about $300O0,- 100 of public money in the national banks of the city, Foreign exchange. which had been adverse, fell to the gold import point, and by November 10, engagements of gold for import had reached $50, 00,0Oo md before the close of December about b106, 900 900.
 Currency Abroad.
 Notwithstanding these measures of re- lief. the country banks and the public swallowed up in the week ending Mo- 0a ap31A Government deposits amounting to near N $3O,000,000 disappeared, and a loss in lash reserves of the banks was dis closed of $30, co., 800. At the same time he bank and trust company situation reached one of it's most critical stages. The advent of an extra holiday on cleo Hon day, November 5, afforded a breath-N ng spell for combination among the trust companies to protect those upon which runs were being made, and the announcement of this plan on Wednes- lay morning turned one of the most dangerous points of the situation. H It was not until ten days later, however !hat Secretary Corteyou announced his plan for drawing money from the hoards md permitting an increase in the bank aote circulation by the offer to the pub hc of $50 900 GOO in ? per cent Panama ca aal bonds and s100.000000 in one-year cer- lificates, bearing interest at 3 per cent.
 
 vigorous letter from President Roose- relt. did much in the opinion of many bankers, to stay the panic. so that event. sally it was necessary to issue only about n5.0Oo,0Oo of the bonds and 600 of he certificates.
 Premium on Currency.
 While these measures tended to restore onfdence to certain degree, there was 10 indication of the renewal of business ictivity for some weeks. A premium tpon currency, which had run as high as per cent. continued in force all through November and December, although the ate declined materially after the clos ng of the subscriptions for the govern nent issues on Saturday, November 3O The demands upon the New York banks Fere swelled for time by the taking
 
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