The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1907-10-28
TRUST COMPANY REFORM
MORE THAN PROBABLE
Money Of New York Depositors May Escape
Clutches of Frenzied Promoters
in the Future.
Result of Semi-Panic During the Past Week-FeeIng oil
Confidence Slowly Returning

New York. Oct. 27.-The chaotic con-
ditions which existed at one time last
week in New York had entered upon
improvement before the week ended
and confidence was growing that the
worst had been seen. A man was
found who could ride in the whirlwlnd
and disregard the storm, and by COM
mon consent the leaders in the imam
cial world subordinated their actions
10 the guidance of J. Pierpont Morgan
With affairs thus submitted TO the di-
rection of a central intelligence mucn
was already gained for REIMBURSEMENT
The position began to define itself as
the dissolving elements in a solution
are made to crystalize around cen
ter. The situation that began 10
emerge was found not so hopeless as
had been feared, the prevalent 1ea-
lures indeed having risen to the stage
of unreason and hysteria among de-
positors in the institutions which were
subjected to runs However lacking IN
reason, the condition thus precipitated
was sufficiently serious, and the va
rious indications of this were striking
and often sensational. The pressure on
credits, even in the expanded condition
TO which they had attained. had be-
come severe, every barometer having
reflected this for many months past.
Bliaht on Values.
The events in New York resulted in
drawing down in the deposits of banks.
thus diminishing the very basis of the
volume of credits. The consequence
was a violent contraction of credits,
which proved a blight on values where
1t touched. The task confronting the
financial generals in New York was to
limit as far as possible the field of
operation of these constructions of
credit. The secretary of the treasury
came into cooperation with the great
capitalists of the country TO supply re-
sources for meeting the crisis.
The requirement was heavy one
owing TO the contagious nature or the
financial fright and the general move
ment which followed among banking
institutions for certifying themselves
even beyond their needs.
Millions Put In Vaults.
Millions of ready money had to be
thrown into the vaults of the trust
companies which were sustaining
run. while demands were made on the
banks by other trust companies which
had funds on deposit with the banks.
AS the great depositary center of the
country. New York banks are subject
TO similar demands from all over the
country during period of threatening
money conditions. The consequence
was that credit in certain departments
of the money market was practically
paralyzed. This was true of operations
in the stock market, where q condi-
ton of deadlock had developed by
Thursday, which was only broken by
the Offering of 5000, 600 on call when
the traders were in greatest need of it.
Way Open to Reform.
1t is not expected that affairs will
subside Immediately into placidity
after so violent an upheaval. The lop-
ping off of offending members of the
financial body has made wide progress,
and the removal of a threatening fac
tor in the New York banking situation
is viewed with qualification by all
friends of solidity and safety in bank
ing. Even greater qualification is felt
over the opening of the way to reform
New York trust company situations
Orderly cooperation and mutual as
sistance among these powerful institu-
lions are in themselves important |
achievements and notable additions to |
the fortifying Of the whole financial |
fabric. These measures have sprung |
up full-grown out of the weeks situa- |
ton. Provision for systematic in |
formation of the actual condition of |
the trust companies and periodical re-
ports to their own central authority. in
the manner of the clearing house com
mittee among the banks. are safe
guards that every banker in the coun-
try will regard with satisfaction.
Feeling of Confidence.
The close of the week found conf
dence maintained in the efficiency of
the measures adopted. The Saturday
bank statement, while reporting a
small deficit below the legal reserve
requirements, exhibited no such deple
ton of available banking resources as
would threaten a present PARALYSIS
The inauguration of gold imports from
London is regarded as certain TO have
an important effect on relaxation of
the strain. The authority granted the
house on Saturday to issue
clearing house certificates is regarded /
as completing the assurance of a0e-