The Forest Republican. [volume] (Tionesta, Pa.) 1869-1952, 1908-01-01
A FINANCIAL REVIEW.
Resources of Capital Subjected
tosEpofmous Strain.
in .Mid-o ctober storm Broke in All
IT'S Force With Collapse Of Corner
m. United States copper-National
Baths stood Up Better Than in
crisis of 1898.

IN. United States Copper-Nationa
Batks stood Up Better Than in
Crisis of 1898.
New York, Dec. 31.-The year 1907
has been one in which there has been
much making of financial history 1t
will go down with 1857, 1873 and 1898,
as one of the panic years in American
finance. but despite the remarkable
stress and strain to which the finan-
cial structure has been subjected. the
year closes with conditions stronger
and safer than they were when the
year began.
The year opened with feeling in
conservative quarters that speculation
had already been carried to an un-
warranted height and that prudence
was imposed by conditions upon banks
and capitalists. That this feeling op-
Grated to some extent throughout the
year, and that there was a scarcity
of capital for absorbing new securi-
ties. was Indicated by the diminished
transactions in stocks and bonds on
the New York Stock Exchange. The
number of shares dealt IN in 1907
fel to 1876, ,169192. Bonds sales were
s561 651 800. The number of stocks
dealt in in 1906 was 2S8,424,234, and
the bonds sales for 1906 were $780,
S17939.
Pressure on the Money Market.
The source of the pressure upor the
money market is indicated by the
large issues of securities which took
place during several years prior to
the crisis. The statistics compiled
by a leading financial journal in Brus-
sells showed that the total issues
throughout the world averaged for the
five years ending with 1906 about 3d.
400,000,000 annually. In the United
States issues of stocks for the first
eleven months of 1907 we're $757359,-
500. and of bonds and notes $1,073,-
$4,000, making up total of $1,SS1,-
B49,50O Securities of all kinds is.
sued in the United Kingdom for five
years ending with 1904 have been esti
mated by experts at $S,454,97S,0OO.
The extent to which capital re-
sources have been strained was not re-
vealed III striking manner to the
general public until "the silent panic
of March 14-now almost overshad-
owed by later events, but at the time
one of the most serious and remark
able breaks which the market has
ever suffered. The loss of 10 points
in Amalgamated Copper in single
day, 21 points in American Smelling,
% in Reading and 25 in Union Pacific,
added to considerable previous de-
clines at a slower rate, wiped out mar
gins, compelled the calling of loans
and wrecked the fortunes Of many
spectators.
1t was not until mid-October that
hne storm broke in all its force with
the collapse of the corner in United
Copper, the appeal of the Morse
Heinze banks to the clearing house
for help and the refusal to extend such
help until the old control was eEimin-
ated.
Events moved fast and furiously on
the heels Of these revelations. The
Knickerbocker Trust company was
closed Oct. % after paying out about
$4,000, 900 in cash; and runs began
upon the Trust Company of America,
which called for the disbursement of
$34.000,000 and upon the Lincoln
Trust company. which suffered near
ly proportionate loss Of deposits.
Suspension Of Cash Payments.
The suspension of cash payments by
practically all the banks and the de-
cision on Saturday. Oct. 26, to issue
clearing house certificates on the fol-
lowing Monday, marked the culminat-
Cortelyou hurried to New York and
deposited about $30,000,O00 of public
money in the national banks of the
city. Foreign exchange, which had
been adverse, fell to the gold imports
point and by Nov. 10 the engagements
of gold for import had reached $780,
100000 and before the close Of De-
cember about $106,000,000.
A few days later Secretary Cortel-
you announced his plan for drawing
money from boards and permitting an
increase in the bank note circulation
by the offer to the public of $50,000,-
600 in 2-per-cent bonds for the con-
struction of the Panama canal and
$100,000,000 in one-year certificates
bearing interest at per cent This
announcement, accompanied by a Wig
orous letter from President Roose
welt, did much, in the opinion of many
bankers. to stay the panic, so that
eventually II was necessary to issue
only about $25,0O0,O00 of the bonds
and s15,0O0,00 in the one-year certifi
Gates.
The old year ends with prices of
commodities and securities much low
er than year ago and with liqulda-
| tion largely advanced in the banking
field, If not in the field of commodi
tes. The great stock of currency abb
scrbed during the period of panic is
returning to the banks and the action
Just taken by the secretary of the
treasury to recall part of the de-
posits Of public money in the banks
will tend to check the outward move
ment of gold which in some quarters