The semi-weekly messenger., 1908-01-03

Nc. IOrA, y. u, December %
tuerr ..as LorA n..CH A.ua.A. ..I-
aAClG. 44l5LCry. ~ ~l1 81 down with
1881, Aol3 and 1893 a. one OF tn- panic
years IN American finance. Inc year
opened with the feeling III COnscrVA-
tive quarters that speculation hau al
ready been carried TO an LuWarIan Ced
height and that prudence was Imposed
by conditions upon bankers, and capl-
talists. Bu, The extent 20 wi.cn CAPT
tai resources, had been strained was
not revealed ia a striking manner to
the general public unui The silent
panic" of March 14th, now almost
overshadoWed by Later events, bat at
the time one of the most serious and
remarkable breaks which the market
has ever suffered The loss Of 8 points
in Amalgamated Copper in a single
day, Il points in American Smelling,
q in Reading and % i'll Union Paci-
fic wiped out margins, compelled the
calling of loans and wrecked the for
tunes of many spectators. The mar
ket recovered only slowly during the
spring and early summer, to suffer
new reactions in August; but it was
not until mid-O<GOber that the storm
broke III all it's fury with the collapse
of the corner III United Copper, the
appeal Of the MUrSe-Heinz banks to
the clearing house for help and the re-
fusal to extend such help until stha
control was eliminated.
The KnickerbOcker Tru"t company
was closed October %, after paying out
about $8,000,0O II cash and runs be-
upon the Trust Company of America.
which called for the disbursement of
$34 900 ,0e0 ahd upon the Lincoln TT rust
company, which suffered an early pro-
portionate loss of deposits. The sus-
pension of cash payments by practical
ly all the banks and the decision on
Saturday, October 26, to issue clearing
house certificates on the following
Monday marked the eliminating stages
of the crisis. Secretary COrtelyOu hur-
ried to New York and deposited about
SoU,OOO,VOO vi pIbllC IllOhSS III A9.C
national banks of the city. Foreign
exchange which had been adverse, fell
to the gold import point and by Nov
ember l the engagements of gold for
import had reached $50, 600, 900 and be
fore the close of December about $10Gz-
600 900.
Notwithstanding these measures Of
relief the country banks and the pub
lie swallowed up in the week ending
November End, about $50, 0,000,00 IN
currency. Government deposits, a
mounting to nearly $3O,000.000, disap-
peared and loss of cash reserve in
the banks was disclosed OF $50 ,601 800.
At the same time the bank and trust
company situation reached one of it's
most critical stages. The advent of an
extra holiday on election day. NOvem-
ber 5th. afforded a breathing spell for
combination among the trust COM
panieS to protect those upon which
runs were being made and the an
nOuncement Of this plan on Wednes-
day turned one of the most dangerous
points of the situation. It was not un-
til ten days later, however, that Sec
retary COrtelyou announced his plan
for drawing money from boards and
permitting an increase in the bank
note circulation by the offer to the
public Of fifty million per cent canal
bonds and $10O,O00,0OO in one year Ger
tificates, bearing interest at per cent
This announcement, accompanied by
a vigorous letter from President Roose-
velt did much in the opinion of many
bankers. to stay the panic so that
eventually it was necessary to issue
only about $25.OOO,OOO of the bonds
and s15,O00,000 Of the certificates.
While these measures tended to re-
store confidence to a certain degree
there was no indication of renewal
of business activity for some weeks.
A premium upon currency which had
run as high as per cent continued
in force all through November and De-
cember.
The national banks have stood up
under the pressure much better than
In the early stages of the crisis in 1898.
The suspension at that time were
about 160 in the three months of
June, July and August. The number
of national bank suspensions hardly
equal1ed a dozen during the recent
panic, the most important being that
of the National Bank of Commerce
of Kansas City.
The permanent effect upon the ma
tional banking system of the scarcity
Of capital and collapse of various bus
mess enterprises has not yet been re-