The Caucasian. (Shreveport, La.) 1900-192?, 1907-11-03

WITHOUT A PRECEDENT
IN tie Midst of Great Prosperity
Several Thousand of the Leading
Banks OF the United States Suspend
Payment-A Menace to the People,

The Commoner of November says
The panic broke with full force Oh tlt
whole country Monday, October 2S. Or
Sunday bankers conferences were helt
in every town in the United States. II
order 70 prevent runs on banks the va
rious financial institutions i'll diferen
cities adopted the clearing house Ger
titicate plan, which plan was devised It
keep business moving without requiring
the banks to pay out all OF their cash or
hand. Cash payments were everywhere
suspended although checks were hon
| orcd to the extent OF small per cent OF
| the individuals deposit. The newspaper
dispatches of the day told this story
New York bankers have engaged about
$I2ooo,ooo in gold in Europe. Bankers
Trust Company Of Kansas City closed
because denied the privilege Of issuing
clearing house certificates Has deposits
of SSoo.ooo All the banks in Oklahoma
and Indian Territory closed for a week
~ holiday proclamation Of governor be
| cause unable to get cash from Kansas
| City and St Louis banks Duluth grain
market suspended and elevators advised
not to buy grain. Wheat broke four
cents at Chicago and 4 I2 at New York
and all grain weak. Runs continue on
two trust companies and two small
banks at New York. New York stock
| market opened at an advance
In an editorial entitled "A Bank Sit
uation Without Precedent the Omaha
World-Heral,i says: In the midst OF
great prosperity several thousand of the
leading banks of the United States yes
terday suspended cash payments. They
had hundreds Of millions Of dollars in
their vaults belonging to their depositors
but they refused to pay it out. This oc-
Cured all over the United States and
it came with suddenness which took
everybody by surprise, including the
bankers themselves. For such an occur
renee there is no parallel in history and
no warrant i'll law. Unquestionably the
first effect Of such a performance is d
shock which will Jar the business world
from center to circumference. Everyone
will feel it and few will escape damage.
There is. however. some satisfaction III
the reflection that such universal and
such all acute attack can not last long.
Whatever change occurs now will be for
the better Apparently we are now all
in the same boat with New York and as
her condition improves ctr will mend.
Two great factors have combined to
force the troubles of New York on the
rest Of the country One was the fact
that the rest of the country had several
million dollars in New York banks
which had united i'll refusing to pay it
out The other was that the crop NOV
ing period having arrived. western and
southern banks. unable to get their
money from New York, were getting it
from the other reserve centers, Chicago
J
million dollars tied up in New York,
Chica go could not meet the strain and
not ohly suspended. as New York had
done. the making Of cash payments, but
advised and forced the other cities of
the w list to do the same The effect will
be to keep money in the banks, to ex
pand the currency by the injection of
certified checks, cashiers checks an
clearing house certificates. and to give
the country time to regain its financial
equilibrium.
In the midst OF this time OF plenty ev-
cry one is asking: How did it happen?"
The World Herald throws some light
upon the situation i'll this way: "The
four great banking institutions in New
York belong to what is known as the
STANDARD Oil crowd They are the
National City Bank with SIo5,oco,oool
deposits: the National Bank of Com
merce with $I45,ooo,ooo deposits; the
First National with $Io7, 100000 depos
its. and the Park National with
500, 100000 Then there are eight great
trust companies which are banks that
do a banking business, practically with
out reserves They are the Farmers
Loan and Trust Company with eighty
eight million: the Knickerbocker with
seventy million: the Central with sixty
seven million: the United States with
sixty-fve million: the Trust Company of
America with sixty-one million; the
Union Trust Company with flfty-eight
million: the New York Guarantee and
Morton with ffty-nire million each. In
those institutions was concentrated al
most exactly $I.oco, 100000, and there
was where the trouble began. The trust
companies were competitors of these and
other Standard banks. The panic began
with a fight between them for business
AMI Standard Oil methods were used.
IT did not work as we'll as. when a little