The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1907-12-31
LIGHT DAWNS
AS PANIC YEAR
PASSES AWAY
Complete Review of Causes
That Brought on Business
Distress.
"SILENT PANIC" REVEALED
STRAIN ON RESOURCES
NEW YEAR WILL COME IN WITH
MUCH BRIGHTER OUTLOOK
THAN 1906.

New York. Dec. 30.-The year 1907
win go down with 1857, 1873 and 1888
as one of the panic years in American
finance, but despite the remarkable
stress and strain to which the financial
structure has been subjected, the year
closes with conditions stronger and
safer than they were when the year be-
gan.
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 oD-
Grated to some extent throughout tn"
year and that there was scarcity OF
capital for absorbing new securities,
was indicated by the diminished trans
actions in stocks and bonds or the
New York stock exchange.
Cause of Heavy Pressure.
The source of the pressure upon the
money market is indicated by the large
issues of securities which took place
during several years prior to the crisis.
Statistics compiled by a leading finan-
clai journal i'm Brussels, showed that
the total issues throughout the world
averaged. for the five years ending
with 1906. about So. 400 000, 900 annually
In the United States issues of stocks
for the first eleven months of 1907 were
S751359.500 and of bonds and notes ST.,
07S. $4,000, making up a total of ST..
S31, $40. 500.
The "SiIent Panic"
The extent to which capital resources
had been strained was not revealed in
a striking manner TO the general public
h.. Gil to .
now almost overshadowed by later
events. but al the time one of the most
serious and remarkable breaks which
the market has ever suffered. The loss
of nineteen points ia Amalgamated
Copper in a single day, tWenty-oue
points in American Smelling, twenty
two in Reading and twenty-five in
Union Pacific. added to considera bic
previous declines at a slower rate, wiped
out margins, compelled calling al
loans and wrecked the fortunes %
many spectators. The market recov-
cred very slowly during the spring and
early summer, TO suffer new reactions
in August: but itswas 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
house for help. and the refusal to eX-
tend such help until the old control was
eliminated.
When the Rush Came.
Events moved fast on the heels of
these revelations. The Knickerbocker
Trust company was closed Oct. p, after
paying out about sS,000,0O0 in cash;
runs were begun on other banks and
trust companies: practically all the
New York banks suspended cash pay
ments; clearing house certificates We're
issued: foreign exchange fell and gold
imports began. Secretary COrtelyou
made heavy deposits of government
funds and announced his plan for
drawing money from the boards and
permitting an increase in bank nute
circulation by the offer to the public
of S50,0O0.0 900 in 2 pei. cent Panama ca
nal bonds and S1O0, 600, 600 in One-year
certificates bearing interest at per
cent. This announcement, accompanied
by a vigorous letter from President
Roosevelt, did much, in the opinion of
many brokers. to stay the panic so
that eventually il was necessary 20 is
sue only about S25, 900. 600 of the bonds
and $4,000, 600 of the certificates.
Why Recovery is Slow.
The situation improved slowly and
the deficiency in New York bank re-
serves was reduced progressively each
week, until it stood on Dec. IS at only
S20,170,S50.
The national banks have stood up
under the pressure much better than
in the early stages OF the crisis Of 1883.
The suspensions at that time We're
about $50 in the three months of June,
July and August, although eIShty-foIr
banks afterward resumed business. The
number of national bank suspensions
hardly eQualed a dozen during the G.
cent panic, the most important being
that of the National Bank of Com
merce of Kansas City. The permanent
effect upon the national banking syS-
tenn of the scarcity of capital. and col
lapse of various business enterprises
has not yet been revealed, buC there
are no indications that il Will be 50
severe as after the panic OF 1898
When as the panic broke on Nov. 1.
1907, the total circulation was 5000 $780,
466. The measures then taken by Sec
rotary Cortelyou to promote circula-
ton in order to tide over the monetary
stringency resulted in an increase of
about SI5.0O0.O0O during the next seven
weeks. so that the circulation stood on
Dec p. 1907. at 1858. 1888.
Heavy Importations of Gold.
Accompanying the increase Of bank
note circulation in order 10 meet the |
pressure for currency was the dramat-
&c movement of nearly $106. 0a0. 900 in
gold from Europe within a period of
about six weeks. The Official figures
Of the treasury showed imports OF gold /
for the month of November amounting !
TO Sos, ,036 which We're more than /
twice the total importations for the /
pI eceding ten months. The remainder |
came early in December. This enor- |
nous movement of gold was facilitated /
by the sharp. arrest of imports oe lux /
uries and a combined effort by pro- I
ducers, railways and bankers ID ship i
promptly to Europe the large crops of
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