The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1907-10-29
HOUSTON GIVES
VIVID ACCOUNT
Salt Laker Returns After
Studying Financial Situa-
ton in New York.
CONFIDENCE WAS GONE
SAN FRANCISCO DISASTER ONE
OF UNDERLYING CAUSES.
CONFIDENCE WAS GONE

After having witnessed all of the finan-
cial stress of New York for the past forty
days, ]. w. Houston returned Sunday
night to Salt Lake. Mr.. Houston was a
close student of the financial conditions
on Wall street while in New York and is
in a position to speak with authority on
the causes and effect of the recent furry
in the stock and money markets of the
east. He watched the runs on the New
York banks during the storm and did
not leave the city until after the trouble
| had subsidized
There were several causes for the con-
| dition that prevailed" said Mr. Houston.
i think that one OF the causes of the
/ trouble may be traced to the San Fran
cisco earthquake and fire. These combined
disasters took out of the world hundreds
| OF millions of dollars in value to the
country that was a dead loss. Much Of
the property destroyed by fire was in
sured- In order to pay the losses many
! OF the insurance companies were forced
/ to liquidate their holdings at loss Even
with the insurance the survivors of the
| disaster were not anywhere near paid for
| their loss and they were forced through
necessity to raise money with which TO
/ replenish their wealth. This course had
/ Its effect indirectly on all of the business
/ of the country.
1.-The San Francisco disaster, however.
without other conditions being as they
were, could not have caused the panic
/ OF idSL week. AOQ TO TINS the Roosevelt
ian policy to which the financierS Of New
/ York attribute the recent unrest in the
money market, the exposures of the pub
/ lie utilities companies. which showed the
almost criminal padding of securities, the
| F'ish-Harriman fight, the inflated values
/ of stocks, and the methods by which Ger
/ tain representatives OF the capital of the
| country endeaVOred to satisfy their per-
sOnal vengeance on each other and you
I have the causes. in my opinion. of the
/ trOublous times in financial circles of New
/ York and the east which for a time
! threatened to involve the entire country.
Utter Lack of Confidence.
"Of course the panic was precipitated
/ by the utter lack of confidence on the
part of the depositOrs in the banks and
the small investors. To use the words of
gentleman whom 1 met in New York.
IF there We're such a lack of confidence
in our everyday life the country would go
to ruin; We would murder our wives and
sweethearts through failure TO trust
them; we would suspect our own broth
ers Of wrong dealing; the business Of the
country must cease to exist In order to
get along at all in this world we must
have fellow men.
when | went to New York six weeks
ago the present financial difficulty was
in it's infancy. The stocks on Wall streer
were constantly being hammered by rival
mOneyed interests. 1 am not prepared
to say that this bearish tendency was re
sponsible entirely for the conditions Of
last week. | do not think it was 1t did.
however. have its influence in exciting in
the public mind a feeling of distrust Of
lack of confidence. The diminutiOn in
value of the large holdings had its er-
feet on the market and the money mar
ket began to get tighter.
There was nothing at all, however. in
the financial conditions in New York or
the east that should force strong trust
companies TO close their doors. The only
reason in the world why these companies
a " a feTF- Of p11l1i
The run on the Knickerbocker Trust
company was precipitated by the an
nouncement of the National Bank of Com
MERGE to the clearing association. and
consequently to the public. that the
KnckerbOcker Trust company could no
longer clear through it. This notice
brought a. run on the bank that was as
uncalled-fOr as it was unprecedented.
Houston Stands in Line.
1.-The Trust Company of America, which
also experienced disastrous run. | know
to be one of the strongest institutions in
with the deposit0rs in this institution
studying the situation. The bank was
crowded to the doors and there was such
a throng in the street that several police
men were necessary to keep the excited
people from trampling each other to
death. The police would allow no one
in front of the bank who was not a de
positor and in order TO watch the crowd
l stood in line with the men who sought
their money.
LAS l stood there 1 studied the faces
of the men. Among them l saw not one
substantial business man; there were a
few small merchants, no doubt but the
majority were of the type of man whose
check for 500 one would hesitate to cash.
All of them Seemed 20 have no regard
for the loyalty they owed the bank; for
the loyalty that they themselves would
expect from the bank were the positions
reversed They did not stop to think
They did not consider that it was to their
best interests to the interest of business
and the welfare of the country TO avert
if possible the run on the bank. They
forgot all in their eagerness to Withdraw
their accounts.
How Panic Was AVerted.
THAT the bank could pay all of the
depositors in full was. of course. an i'm
possibility. There is no business in the
world that can HqUidate in twenty-four
hours. ard yet that was what they prac-
tically forced these banks to do. The in
terests of the banks were numerous and
it was impossible TO liquidate the secUr-
tiles without a great sacrifice. The fail
ures that resulted were inevitable under
the circumstances.
1.-The credit for averting a financial Ca
lamity which wahld have spread over the
Continued on Page 8.