The Washington herald., 1907-12-29
STRINGENCY IS OVER
Faulty Gearing Checks PrOspertys Chariot and Results
in Passing Industrial Depression

Another leaf has been fled in the great
/ experience book Of TIE American busi-
ness community. and the title inscribed
thereon IS: The Money Pane and In
dustriaI Depression of 1907 Opinions
differed about the causes. JUST as they
viii differ about the remcd-es. That's
the politics Of II. The undispated fact
is that there was a breakdown. Business
[ is not where il was a year ago.
/ Up TO October I6, Wnen tEe IIeinze cop
per corner bungle exposei chain Of
New York banks used as the basis Of
stock gambling operations by The Morse
| Thomas-Barney coteric. the volume Of
/ actual business had kept wei W to ;he
/ high level Of the preceding several years
Of conceded prosperity. Crops had ma
tured wei (adding total Of S7,5o0o00 20
the national wealth, we know now from
Secretary Wilson's report; the prices Of
actual commodities had held their own, If
not increased; wheat had passed the DOL
lar mark in May; enormous orders FOR
structural steel were piled uD; al kinds
Of factories were operating full time, and
a record-breaking spring tide OF immi
grafton had swept into the country.
The first half OF the year had the few
est failures since 1893 II - true Jaat
paper values had been shrinking steadily
for more than a year and this was highly
disturbing to the people who aad invested
at high tide. As far back as March .
there had been a slump of stocks in Wall
street. Elsewhere it was called ''the
gamblers panic" The money rate. or
pulse Of the street, leaped UP, and DR."
Cortelyou began administering pills in the
form Of Uncle Sans funds deposited in
the banks. But the same symptoms re-
Cured
The tide turned In midsummer. People
of wealth felt poorer by so much water
wrung out of their stocks. Economy and
boarding began. Orders went out from
the captains to curtail Industrial opera
tons. Money became scarce at the very
moment that the Heinze fuse touched off
the mine of distrust under the structure
of credit, The 100000 Knickerbocker
Trust Company, of New York. closed at
ter I heavy run, and several smaller
banks suspended, some in Brooklyn
whose officials later were indicted for
crooked dealings. The discredited bank
ers were forced out and prompt action
by the clearing house, with limitleSs
cash ladled out from pool headed by
Morgan and Rockefeller. met the run on
the Trust Company Of America. But the
shock had frozen currency III its veins
and. 10 save the banks, clearing house
checks had to be resorted TO in all the
money centers, so that the year ends
with cash payments still suspended. Other
bank failures occurred at Pittsburg. De-
troit, and Kansas City. Transatlantic
lines were engaged IN 2 rate war from
August on. Prices Of nearly all staples
rose sharply just before the panic in
creasing the cost of living.
Labor and Capital.
Notwithstanding the efforts for indus
trial peace. the antagonism between or
ganized labor and federated capital in
creased in the face Of business depression
and the beginning of wage declines and
dismissals of employees. President Van
Cleave. of the Manufacturers Associa-
ton, led in the creation of war fund
of $500C00 a year for three years, and
answered the federation boycott OF his
stove works at ST. Louis with a test suit
Led by President Gompers, the fedora
! ton planned 10 fight every inch Of the