New-York tribune., 1907-12-31

rs-1GfO
largest insurance companies, ran eo ornorafions
,rar,ion companies and financial Lps colp1i ~
shocked investors and MADE mem me ,asIpIe S,Ich
little loanable capital remained aVaii@p ,tsbly
zfnlol,Iras had much more effect. propap1S'
abroad than they had here. necause tiae ar
were able 20 make distinctions. Whne .ns a;s
trust in our whole business fabric
Rr-S UPON THE BANKS
,,-b.p therefore two OF three insiit ~ ico
banks and trust companies suppoS;S.r .ao;-od
.oli6 rere found TO have their CAPITA, ,Iic
- -,o.;. iohbjng Of their officers the Puo,ic
,,as easily frightened aIlG tile run cP . - Of
began. The question them pecs.iIe l 10 ~ he used
loanahle capital but of actual money 70 D -
1D nc transactions of the day-a very uiiIeei''
nrest;on though, Of course, closely reia'eo-
n would seem that our system OF . CuIIei'.3
&. =, s-range6 so as to permit its volume 10
be Increased temporarily TO coun.eiacI 8: @ - nenic
den drain of money by the hoarollis ~ "a q ori1ad
n = nrohabe that the stTingency which Teachea Tee.
a. might on that dark day of OCTOBER n ihasL'
in psrf have been alleviateo had we h@u .tf a -
rency which could automaflcaIly ei1aie 80 ar a
meet the tremendous oenlailo Vi .. . so-,oa vas
week or a month while public conlloence co. 20,
being restored. The national aolilIi.is, aoI, 80 nf
together with many Of the large capiI.list t.tscr
New York and elsewhere, put their gslouiuei
under the load and by various devices oI on
unusual character have brought about the pres
ga, Condition OF gradually increasing confidence
The INJURIOUS consequences TO fohow lToi'
This panic are not likely TO be so long uIaMn .i
out or to result in such disastrous ihdusliid
denression as the manic of 1893 or the pane OF
ls73 and this the reason Uflat the cohuitO%i
off makes II so IlluCIl esaSiei
business gradually TO accufnuiats - q,
snd then TO renew the enterprises which mao 10
be abandoned for lack OF II.
In the first place. have a solid currency,
with no suggestion now Of departure from the
gold standard. In 1893 the pressure for iree
ei,,,e- w-2s on and the threat Of national re
pudjation had much &c do with the oeiaS III liI.
return 10 PROSPEROUS times. Our government
finances are ia excellent condltion .., dIc ~
have Ia rye surplus Our farming con'niuI,l'fe
in the West to-day are not under the "e,sha ~, =,
mortgages and OF debt which distressed then,
In 1883 and 1872. They are prosperous ana
wealthy -,
Again. the railroads. which make up a large
rart Of the wealth of this country are on a
much more solid foundation than they were IN
1ee2 Then Tnanv of them had to be taken into
The hands of receivers and immense amouh's
expended by means Of RECEIVERS cellihcaees'
sjispIacins and destroying the value OF vested Sc
rTr;tiae in order 10 put the roads in a safe and
Income earning condition The railroads to-CA
are in a better physical condition than they nave
ever been in their history But few Of them
have recently beer built into new territory, IN
which business has to be created by introducing
? new population
again tbe balance of trade is with We
were able to settle for the hundred millions OF
gold that Withdrew from Europe in order 10
meet the demand for money liz the markets IN
New York by the excess Of exports over our
in1porrs in the single month Of October
All these things point to the probability OF a
restoration of confidence, and. after proper
liquidation and an industrial depression Of some
months. TO q resumption Of business on norman
basis
y
Modern business is conducted on system OF
credit which in normal times increases the facii-
ity with which the work OF manufacture. pro-
duction and sale can be carried thousand
fold beyond the limit of earlier days, and en-
hies a total of many billions to rest a very
small percentage of actual money passed Every
manufacturer, every merchant, IS, under MOO
crn conditions. dependent in the successful con-
duct of his business upon bank credits extended
AT regular seasons The banks themselves in
-urn acquire the means of granting these cred
stS largely from the money Of their depositors
And In loanng from their deposits the banks
rely the improbability that more than ceT-
lain part of the deposits will be called for at
any time.
4 lack of public confidence in the banks Gre
Rtes a common desire among depositors to with
draw their money. The fright which seizes the
credior-the depositor-and leads him to hoard
his money spreads like wildfire and is
reasoning and unreasonable as the spirit Of
mob run on the bank ensues The banks
Then cali their debtors and the tremendous
structure depending upon credit tumbies. Mean
time. men who properly count themselves as
snillioDaires. who are honest. conservative solid
business men, always responding to their obliga-
7ions, find themselves as helpless under such
financial cataclysIn as they would be In an
earthquake.
Ora adually reason resumes its sway, but the
injury 10 credit and the blow which has been
struck AT the normal business progress have more
less permanence. Values have shrur.k plans
for new and increased business enterprises mus.
be ebsndaned and liquidation and house clean
ing take place The business who have
Rad 20 stand the strain--who have seen their
Ej sondest hopes crushed, and have only been able
effort and most substantial financial Ioss-are
naturally sore and depressed. They believe
end generally they right-that this disaster
has come upon them without fault Of theirs. II
IS unjust them.
No matter how many symptoms Of the COM
ing trouble there may have been. panics always
come with a shock and q tremendous s,Irprise
and disappointment. And hardly is the rlarf,
when s. fierce discussion arises as to- the
catIse Of its coming. With various motives ed
5tors and public speakers rush to the front 10
faste1 upon something one the respor-
NfrsiirV yz-Haf has II &c
r7turai that in the condition of mind in which
-hc suffering business men are left bv the great
strain and trial such suggestions should receive
marked attention and that the definitely
Ehe personality Of the sea pegoat can be fixed
the more pleasure il gives the victims of tbs
catastrophe.
FIGHT OF THE ADMINISTRATION
This mental attitude Of the business con,-
Tsunfty which have described as likely 10 be
Sound after every financial panic is clearly pres
ent to-day The economic and political history
OF the las; four years gives il especial fnpor-
1affoe, because II offers to certain dement's in
1he business and political community. an excep-
icnal opportunity Let me invite your attention
20 that history IL IS that Of a giant struggle
between the national administrator, and certain
powerful combinations in the financial world
These conbinations. for lack OF better name
called trusts They engaged in different
lines of manufacture and production and by
assembling iarge amounts Of capital into one
mass in particular line of business managed
by artful and skilfully devised but illegal meth
DDS Of duress- to exclude competition and mo-
nopolize the trade They became the dictators
10 great railroads. however powerful and by
7 threatening a withdrawal of patronage secured
unlawful and Discriminating rebates. greatly in
eTeasing their profits and stili more completely
sappressing competition
Managed with conspicuous business ability
these trusts went into legitimate foreign trade
and largely increased our country's exports The
profits which they realized enabled them 10
engage fr other enterprises carried on by Iegit-
innate methods, until the hold which they
acquired in the business community gave them
seemed homeless n