The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1907-10-29
HOUSTON GIVES
VIVID ACCOUNT
Salt Laker Returns After
Studying Financial Situa-
ton in New York.
CONFIDENCE WAS GONE
SAN FRANCISCO DISASTER ONE
OF UNDERLYING CAUSES.

After having witnessed all or the IMAM
cial stress of New York for the past forty
days. j. w. Houston returned Sunday
night to Salt Lake. Mr.. Houston was a
close student of the financial conditions
on Wall street while in New York and is
in a position TO speak with authority on
the causes and effect of the recent furry
in the stock and money markets of the
east. He watched the runs on the New
York banks during the storm and did
not leave the city until after the trouble
had subsidized.
There were several causes for the con-
diton that prevailed said Mr.. Houston.
Il think that one of the causes of the
trouble may be traced to the San Fran
cisco earthquake and fire. These combined
disasters took out of the world hundreds
of millions Of dollars in value to the
country that was dead loss. Much or
] the property destroyed by fire was in
sured In order to pay the losses many
! of the insurance companies were forced
| to lquidate their holdings at loss. Even
with the insurance the survivors OF the
disaster were not anywhere near paid for
| their loss and they were forced through
necessity to raise money with which to
replenish their wealth. This course had
/ its effect indirectly on all of the business
| of the country.
/ 1.-The San Francisco disaster, however.
without other conditions being as they
were, could not have caused the panic
/ OF last week. AOQ TO lDlS the ENOCSbNtll-
! ian policy TO which the financiers Of New
/ York attribute the recent unrest in the
money market, the exposures OF the pub
/ lie utilities companies, which showed the
almost criminal padding of securities, the
/ Fish Hartman fight, the inflated values
/ of stocks and the methods by which GER
tain representatives Of the capital Of the
country endeavored to satisfy their per-
sOnal vengeance on each other and you
have the causes, in my opinion, of the
trOublOus times in financial circles Of New
York and the east which for time
/ threatened to involve the entire country.
Utter Lack of Confidence.
/ "Of course the panic was preeipitated
/ by the utter lack of confidence on the
part of the depositors in the banks and
/ the small investors. TO use the words of
| a gentleman whom ! met in New York,
IF there were such a lack of confidence
/ IN our everyday life the country would go
I to ruin: we would murder our wives and
sweethearts through failure to trust
| them; we would suspect our own broth
I ers of wrong dealing; the business Of the
I country must cease 10 exist In order to
get along at all in this world We must
when | went to New York six weeks
ago the present financial difficulty was
in it's infancy. The stocks on Wall streer
were constantly being hammered DY rival
moneved interests. j am not prepared
to say that this bearish tendency was re
sDOnsihle entirely for the conditions OF
last WeeI | 90 mol Lllnk IL WIS. II iltA.
however nave its influence in exciting III
the public mind a feeling of distrust, or
lack Of confidence. The diminutlon IN
value Of the large holdings had its et-
feet on the market and the money mar
ket began to get tighter.
There was nothing at all. however. IN
the financial conditions in New YORK or
the east that should force strong trust
companies to close their doors. the only
reason in the world why these companies
could fail was the distTust of the public.
The run on the Knickerbocker Trust
company was precipitated by the an
nouncement of the National Bank OF Com
merce to the clearing association, and
consequently to the public. that the
Knickerbocker Trust company could no
longer clear through it. This notlce
brought run on the bank that was as
uncalled-f0T as it was unprecedented
Houston Stands in Line.
THE Trust Company Of America, which
also experienced a disastrous run, l Know
. to be one of the strongest institutions IN
the country | stood IN line 1Or hours
with the deposit0rs in this institution
] studying the situation. The Dank was
crowded to the doors and there was such
a throng in the street that several police.
men were necessary to keep the excited
! people from trampling each other 10
! death. The police would allow no one
! in front of the bank who was not de
positor and in order to watch the crowd
, stood in line with the men who sought
their money.
las l stood there 1 studied the faces
! of the men. Among them | saw not one
substantial business man; there were a
l few small merchants, no doubt. but the
, majority were of the type of man whose
! check for S1O0 one would hesitate TO cash
! All of them seemed to have no regard
l for the loyalty they owed the bank; fOl
/ the loyalty that they themselves would
, expect from the bank were the positions
reversed. They did not stop to think
They did not consider that it was to theil
best interests. to the interest of business
and the welfare of the country to aver
/ if Dossible the run on the bank. The,
forgot all in their eagerness to Withdraw
their accounts.
How Panic Was AVerted.
THAT the bank could pay all of tbs
: depositors in full was, of course. an i'm
, possibility. There is no business in III
world that can liquidate in twenty-foul
hours. ard yet that was what they prac
- ticaTy forced these banks to do. The in
; teresfs of the banks were numerous and
il was impossible to iqudate the secur
- tiles without a great sacrifice. The ran
/, ures that resulted were inevitable undei
= the circumstances.
. 1.-THE credit for avertinS financial ca
. Iamity which wonld have spread over th'
: Continued on Page 8.