The Mankato free press. [volume] (Mankato, Blue Earth County, Minn.) 1879-1924, 1908-01-03
IN FINANCIAL HISTORY
Year of 1907 Win Go Down
as a Period of Panic.
DID NOT OPEN AUSPlClOUsLY
Feeling Prevailed In Conservative
Quarters That Speculation Had Been
Carried to an unwonted Height.
Closes With Conditions Improved.

Guafiers mar speculation Had Been
Carried to an unwonted Height.
Closes With Conditions Improved.
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 1893
as one of the panic years In American
finance, but despite the remarkable
stress and strain to which the financial
structure has been subjected, the year
closes with conditions stronger and
safer than they were when the year
began.
The year opened with the feeling In
conservative quarters that speculation
had already been carried to an unwar-
ranted height and that prudence was
imposed by conditions upon bankers
and capitalists That this feeling
operated 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. While
the number of shares of stock dealt in
up to Christmas of 1907 did not fall
below that of normal years prior to
1905, 1t was very much less than for
that year and for 1906. The banner
year prior to 1902 was 1901.
The extent to which capital re-
sources had been strained was not re-
vealed in a striking manner to the gen.
eral public until "the silent panic" OF
March IA, now almost overshadowed
by later events, but at the time one of
the most serious and remarkable
breaks which the market has ever sui
fered The loss of 10 points in Anal
gamated Copper in a single day, 81
points in American Smelling, % in
Reading and % In Union Pacific,
added to considerable previous de-
clines at lower rate, wiped out mar
gins and wrecked the fortunes Of
many spectators. 1t was not until
midi October that the storm broke In
all its force with the collapse of the
corner in United Copper, the appeal of
the Morse-Heinze banks to the clear
ing house for help, and the refusal to
extend such help until the old control
was eliminated.
Events Followed Fast.
Events moved fast on the. heels of
these revelations. The Knickerbocker
Trust company was closed Oct % af-
ter paying out about $S,000,000 in
cash; and runs began upon the Trust
Company of America, which called for
the DISBURSEMENT OF s34000,000, and
upon the Lincoln Trust company,
which suffered a nearly proportionate
cash payments by practically all the
banks and the decision on Saturday,
Oct 26, to issue clearing house certifi-
Gates on the following Monday,
marked the eliminating stages of the
crisis. Secretary Cortelyou carried to
New York and deposited about $780,
100000 of public money in the national
banks of the city. Foreign exchange.
which had been adverse, fell TO the
gold import point, and by Nov. 10 en-
gagements of gold for import had
reached $50,0OO,000 and before the
close of December about s106,000,000.
combination among the trust COM
panies to protect those upon which
runs were being made was formed and
turned one of the most dangerous
points of the situation. Then Secre-
tary Cortelyou announced his plan for
drawing money from the boards and
permitting an increase in the bank
note circulation by the offer to the
public Of s50,000,090 in per cent
Panama canal bonds, and $100,000,000
in one-year certificates bearing inter-
est at 3 per cent. This announcement,
accompanied by vigorous letter from
President Roosevelt, did much, in the
opinion of many bankers. to stay the
panic, so that eventually it was neces-
sary to issue only about $4,000, 900 OF
the bonds and $15,0o0,0 900 of the certi-
ficateS