Yorkville enquirer. [volume] (Yorkville, S.C.) 1855-2006, 1907-10-25
CYCLONE IN FINANCE.
Tremendous Crisis In New York
Quickly Averted.

| Inc nnanclaI uncertainties "HlSi
have been disturbing Wall Street FOL
many months past, came to temper
larry crisis on Tuesday, that came neal
Ismashing things. There was an un-
precedented run on the Knickerbockel
Trust company, the second largest
TRUST company of New York. The run
lstarted without much warning ano
kept up until the company was forced
to closed it's doors at 1890 for lack o1
further funds. During the day nearly
l$8,000,0 900 was paid to depositors. The
Trust company had been promised
l$15,OO0,0O0 from other banks; but be-
lcause Of disclosures in connection with
the Morse Heinze affair of a few days
lago the money was not forthcoming
When the bank closed, it assured Its
customers that it had plenty Of means
with which to pay all Of its depositors
land could easily do so within the next
flew days. The depositors OF the
Knickerbocker Trust company included
a large proportion Of wealthier New
Yorkers, and after the run started
money came out in great chunks
When the suspension Of payment was
finally announced the sidewalks ir
front Of the main bank as we'll as OF
the two branch banks in other parts
of the city were still crowded. Mex,
continued until the company had tc
suspend again. A run was started or
the Trust Company Of America early
Wednesday morning; but that concern
seemed to have plenty Of money and
before the close of the day confidence
vas in a large measure restored. Ii
lis stated that Secretary Cortelyou came
to the relief of the situation by de-
posting about $25,O00,000 of govern
ment funds in various Of the New York
banks. A dispatch of yesterday tells
the story Of the crisis as follows:
AS a result of today's developments
in the financial world there Is every
indication that the crisis in the bank
ing and trust company situation has
been safely passed. The Trust COM
pany Of America all through the days
banking hours paid out money to de-
positors as rapidly as possible and
closed the day with all demands hav-
ing been met. A very favorable feat
ure of the situation respecting this
company was that 1t was able to make
it's payments with very little assist
ance and another was that the COM
pany received over its counter in the
morning hours in ordinary deposits
more than $1,000,000. The general i'm
preston in financial circles that this
run with so little trouble was undoubt-
edly in good condition to continue its
business and in fact that company and
Its affairs were not considered as a
| factor any longer in the general situa-
ton. AS the Trust Company of Amer
| lea had been the centre Of the recent
| financial storm it was accepted thai
the ability it had thus shown to wealth
er the storm was clear indication thai
the financial sky had cleared and that
a period of fair weather was now well
in sight.
Three Notable Episodes.
| The day was marked by three note
worthy episodes. First and earliest
in the day came the announcement OF
trouble in three minor state banks In
Harlem, the Hamilton Bank, the
Twelfth Ward Bank, and the Empire
City Savings Bank. These banks
transacted only a neighbOrhood busi-
ness and their suspension OF payment
was absolutely without significance
bearing on the general situation
State Bank Examiner Judson, how
ever declared this afternoon that all
three were solvent and that their de-
positors would lose nothing.
| The second episode was a run in
augurated against the Lincoln Trust
company. The run against this COM
pany was steady throughout the day
but the sums withdrawn were not
large. At the close of the day the
were fully able to meet all obligations
Morsan's Helping Hand.
BY far the most notable, even dra-
matte episode Of the day was the emp
tying of millions Of money into the
stock exchange through a pool headed
by J. P. Morgan and other financiers
in order to avert a ruthless selling out
of stocks held by brokers which was
threatened because of their inability to
obtain renewals of loans on which
these stocks had been carried. A re-
markable condition brought about this
extreme Stringency in money which
had gradually forced the interest rate
up to an almost unprecedented figure
| Certain large interests of great finan-
cial resources had been charging re-
Gently what was in effect, If not legal
lily, usurious rates Of interest on call
loans. One institution that had been
engaged in this practice was itself a
member of the clearing house and was
severely criticised by other bankers
for its action on the ground that this
added an unnecessary complication
and strain to the money situation. AS
a result of the criticism this institu-
ton withdrew its support and declined
to offer money on call on the stock eX-
change. The effect Of this was to run
the rate for money today up to 1OO
per cent, and when that figure was
quoted an extremely sharp decline re-
suited in the stock market. Union Pa
cific, 10 per cent stock selling down
to par.
Normal Rates Asked.
Notwithstanding the high rate fol
call money that might have been OBJ
tained in the National City Bank, John
D. Rockefeller personally and other
prominent monied interests sent funds
to the stocl; exchange to be lent at
the normal rates of per cent. These
sums however, were not sufficient to
Inject the demand and for time there
was great confusion and hurried SELL
ing of stocks on the exchange. At the
time that excitement was at its height
| the announcement was made that q
pool had been formed with j. P. Nor
gan at it's head, to come to the rescue
of the brokers for whom 1t was neces-
sary to provide funds at once in order
that they might carry the stocks they
were holding for their customers. The
Morgan pool brought a sum of money
Iam0untfng 10 ABOUT $Z5,UUU,UUu 10 TIE
loan corner of the exchange where 1t
was quickly distributed in such lots as
would be most effective in rendering
Support.
The effect OF this relief measure was
instantaneous and the rate on call
money dropped from 100 per cent to
no ner cent Stocks advanced more
Irapidly than they had declined and II
was only a few minutes until Union
Pacific, the market leader. was selling
lat 105. Other stocks were similarly
affected and the rally was complete.
A Memorable Scene.
Seldom, if ever, had the veterans OF
finance seen a great situation saved Sc
quickly and so effectively by such a
Napoleonic stroke. When the stock
exchange closed every one was getting
all the money he wanted. The close
was marked by a memorable scene in
which the brokers gathered around
the principal trading posts and gave
three cheers for ]. Pierpont Morgan
and the members of the pool which
saved the day.
The aggregate amount of money
which had been contributed in order