The Glenwood post., 1908-01-04
MONEY MARKET HAD BEEN SHAP.i
ING FOR A STRlNGENCY FOR
NEARLY A YEAR.
BAD BANKING METHODS
DISCLOSURES SHOWING VIOLA.
TIoNS OF LAW SHOCKED
INVESTORS.

liam H. Taft delivered his first public
speech since his world-circling tour.
As the secretary of war rose to speak
all the guests stood up with him and
filled the air with long continued
cheers. Calls for Three cheers for
Secretary Taft, the next President OF
the United States" were heartily ac-
claimed. The secretary said:
During the last three months the
country has suffered from severe
monetary panic. Even yet the clearing
house certificates linger in your bank
exchanges as emphatic evidence OF It's
severity and of the extreme measures
which had to be taken to avoid greater
disaster. Doubtless many OF my near
ers have not recovered from the IN
tense nervous strain and mental cut
fering to which they have been sub
jected since the middle of October. The
panic has been given a certain pollti-
cal bearing and Importance For this
reason | have selected for my topic OF
tonight The panic of 1907, its causes,
its probable effects and the relation TO
it of the policies of the national adj
ministration.
What did cause the panic? Writers
on financial subjects, who have given
their lives and constant attention to
matters of this kind, who are able to
institute a comparison of the present
panic with previous panics, and who
are entirely familiar with the condi-
tons preceding all of them, substan-
tia..y agree upon the cause.
Do and industrial dpnrpSSl1nS
are the result of the characteristics
of human nature, which manifest
themselves in business and elsewhere.
The world generally has n certain
amount of loanable capital available
for new enterprises or the enlarge
ment of old ones. In periods OF pros
perity this capital, with the instru-
mentalities for enlarging it potentially
by credits, is put into new enter
prises which are profitable and the
increase in free capital goes on al
most in arithmetical progression. Al
ter time, however, expenses OF op-
Grafton and wages increase and the
profit from the new enterprise grows
smaller. The loanable capital gradu-
ally changes its form into investments
less ard less convertible. Much of
that which might be capital is wasted
in unwise enterprises, in extrava-
gance in living, in wars and absolute
destruction of property, until the
available free capital becomes we'll
nigh exhausted the world over, and
the progress of new enterprises must
await the savings of more. Men con
tinue to embark in new enterprises,
however, the capital fails them, and
disaster comes.
The conclusion cannot be avoided
that the revelation of irregularity
breaches of trust, stock jobbing, over
issues of stock, violations of laws and
lack of rigid state insurance compa
MES, railroad companies, traction com
panies and financial corporations.
shocked investors and made them
withhold what little loanable capital
remained available. Such disclosures
had much more effect probably
abroad than they had here, because
here we were able to make distinc
tons, while there, at a remote dis
tance, the revelations created distrust
in our whole business fabric.
When, therefore, two or three in
stitutions, banks and trust companies
supposed to be solid, were found to
have their capital impaired by stock
jobbing of their officers, the public
was easily frightened and the runs
upon banks began. The question then
became not one of loanable capital. but
OF actual money to be used I'm the
transactions of the day, very diff
ferent question, though of course
closely related.
"Tlse agents and sympathizers and
defenders of the trusts and others in
nocent but mistaken, now rush for
ward to place the blame of the pres
ent conditions upon the administration.
They seek to use the panic as an argu.
ment for giving up the moral victory
which has been won. Apparently they
would take retrograde step back to
the conditions which existed five or
six years ago, where, unhampered by
state laws, these trusts were building
the financial bulwarks behind which
they are now fighting.
Ihey rely upon the soreness and
the mental strain and suffering
through which all the honest business
men of the community have had to
pass as a golden opportunity for driv-
ing home their attacks upon the ad-
ministration and for paralyzing the
onward movement toward the supren-
acy of the law
at is said that the administration
has arraigned the whole business COM
munity as dishonest l deny it.
THE President has condemned the
lawbreakers. He convinced those who
have unlawfully accumulated enor-
nous powers and capital, that they
are not immune. He has put the fear
of the law in their hearts. They have
been acute enough to attempt to pro-
tect themselves by giving the impress
sion that his action has been directed
against the whole business commun-
ity. 1t is true that the business men of
our community as whole are honest
and their methods are sound The
President has never said otherwise. In
deed. it is chiefly in the interest of the
great body of honest business men