The Idaho Springs siftings-news., 1908-01-04
MONEY MARKET HAD BEEN SHkP>
ING FOR A sTRINGENCY FCR
NEARLY A YEAR.
BAD BANKING METHODS
DISCLOSURES SHOWING VIOLA.
TiONS OF LAW SHOCKED
INVESTORS.


speech since his woodworking 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 ao-
claimed. The secretary said
During the last three months the
country has suffered from u 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 he taken to avoid greater
disaster. !, uhtless many of my hear
ers have NOT recovered from the In
tense nervous strain ana mental cus'
fering to which they have been SUB
jected since the middle of October Tho
panic has been given certain pollti-
cal bearing and importance. For TINS
reason | have selected for my topic or
tonight The panic of 1907, its causes,
its probable effects and the relation 10
il of the policies of tn national ad-
ministratiOu.
What did cause the paris writer's
on financial subjects, who haF" gwen
their lives and constant attention 10
E.att,rs of this kind, vino are anIe to
institute a comparison OF the present
panic with previous panics. and VINO
are entirely familiar with III" condi-
lions preceding all Oi tNCn, snbStah-
tia..y agree upon the cause.
"Pau.cs and industrial depresSions
are the result of the charac teTistics
of ~ which TtAHiIeSL
themselves in business and elsewhere.
The world generally has Il certatn
amount OF luanablc capital available
for new enterprises or the enlarge
ment of old ones. In periods OF pros
perity this capital with the instfn-
mentalities for cnlarging 1t potentially
by credits, is put into HeW enter
prises which are profitable and tue
increase in free capital goes on al
most in arithmptical progression Al
ter a time, however. expenses OF op-
Grafton and wages increase and the
profit from the new enterprise crows
smaller. The loanablc capital gradu-
ally changes it's form into Investments
less ard less convertible Much OF
that which might he capital is wasted
in unwise enterprises, in extraYa-
gance in living. in wars and absolute
destruction of property, until the
available free capital becomes we'll
nigh exhausted the woI-d 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 irreguiarIty,
breaches of trust stock johbing. over
issues of stock. violations of laws and
lack of rigid state insurance compa-
nies. railroad companies, traction ooLa-
panies and financial corporations.
shocked investors and made them
withhold what little loanable capital
remained available. Such disclosures
had much more effect proba hiy
abroad than they had here, because
here We were able to make disttnc-
tons, while there, at a remote dis
tance. the revelations created distEust
in our whole business fabric.
When. therefore, two or three In
stitutions. banks and trust companies
supposed to be solid, We're fornd 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, buf
of actual money to be used In tho
transactions of the day, a very diff
ferent question, though of course
closely related.
"The agents and sympathizera 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-
meut for giving up the moral victory
which has been won. Apparently they
would take a rctrograGe step back TO
the conditions which existed five or
six years ago. where, unhampeTcd by
state laws, these trusts were building
the financial buIwarks behind WHICH
they are now fighting.
They roly upon tho soreness and
the mental strain and suffering
through which all the honest BUSINESS
men of the community have had To-
pass as golden opportunity for drtv-
ing home their attacks upon the aG-
ministration and for paralyzing tho
onward movement toward the supreR-
acy of the law
ut is said that the administration
has arraigned the whole business cous-
munity as dishonest. deny II.
The President has condemned the
iawbreakers. He convinced those who
have unlawfully accumulated enor-
nous powers and capital that they
are not immune. lie has put the fear
of the law in their hearts. They have
been acute enough to attempt to pro-
tect themselves hy giving the iRpres.
sion that his action haS been directed
against the VIE bt. Inc comnlun-
itv IT is trre that the b. ess men OF
our commun.ty as wh are honest
and their metbu is are Dund. The
President has never sale nerwise. In
deed. it is chiefly in thl interest of the