The semi-weekly messenger., 1907-11-01
WHERE THE STRENGTH LIES
The Country Banks in Position to
Weather the Storm-DiRerent
From Conditions in fS13.

Regarding the recent CHAOS of Wall
street, and the large financial circles
the Chicago News quotes Hr. James
B. Pagan, president of the First Ma
tional Bank, or Chicago, as fol-
lows.
strength of the financial situation
in the United States lies with The
country banks, their abundance Oi
wealth and real money arI the minute
prosperity OF the agricultural commuE-
tiles, which is s,eadily adding 20 tne
stability of their position az LENDERS
OF funds.
Our present situation has no par
aiiel in the annals of business condl-
tions in the United States. IN the pan
iC of 1898 when so many banko thrOU@ a
out the country Were forced 10 tle
wall it was because tie rural banks
were short of funds. poN erty stricken,
SO to speak, for the need cf real
money.
They We're bound to seek relief
from their reserve agents a. money
centers, and where they could not Oh
tain assistance to keep up their legal
reserves they failed.
To-day the condition is complt ~
reversed The country banks lave
huge surpluses of ava,iabl" cash IN
excess of Is per cent reserve they arc
compelled to carry against deposit liza
bilities. Instead of being borrowers
they are now lenders. and their bal
ances at, the reserve certers are JeinS
used to purchase commercial paper and
to otherwise supply the industrial chan
nels of the land.
~oiGent in 1893 was a bankers
panic, and the condition cannot posi-
bly, be repeated now.
Fair crops and high prices this
year will add to the strength OF the
situation. Business should react be-
cause of the fast pace at which The
country has been going, but there Is
no occasion for alarm
Just so, and because OF this f&ct,
North Carolina bankers, and North
Carolina farmers have scarcely Tclt
the panic on Wall street.
In 1898 as Mr. Pagan notes, the
small banks throughout the country tail
ed because they had not that strength
they have today. The farmers n this
state as we'll as Throughout the country
were unable to get the cost of produc-
ton for their crops. They we're heaT-
lily indebt. A series OF crops, with lew
prices had wei nigh ruined them,
and in the hour of the crisis tItey sif-
fered.
Such was the experience with bank
ers throughout the state. They were
unable TO stand the shock of panic
and they failed.
How changed are conditions through
out this state today. Farmers art
now able to live and still hO.d tleir
crops for the prices they demand. in
| other words they would still De able
| to live if their crops had failed. This
not being the case they are holding
| for higher prices whereas once they
| would have had to sell at almost any
price.
! Banks, too, are on firm footing. TaEs
our own city Here the banks scarcely
felt the panic in Wall street 1heJ
are firmly fixed and their balance:
and deposits are at highwater mark
no matter what class may pre-
vail in big financial circles. wher'
business is based largely on the wa
tered stock
There is vast difference in the Fl
nancial status OF our state today anc
in '93 and "a.
There is also room here for soot
counsel. TO play the part of wisdcu
farmers will not sci their cotton today
while prices are low. due to the strain
ed financial condition on Wall street
The low price Is not normal It caruo
hold. The wise man win wait and pro
y IL thereby Mewa