The Oskaloosa herald., 1908-01-02
FINANCES BETTER
THAN ONE YEAR AGO
PANIC CONDITIONS RESULTED IN
STRONGER STATUS.
TWELVE MONTHS STRAIN
ovsr-specuIatlon Followed by Restrle-
ton Of Currency and Serious
Loss Of Public Confidence
Relief by Government.

has been one in which there has been
much making of financial history. II
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 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 OPP
Grated to some extent throughout the
year and that there was scarcity of
capital for absorbing new securities
was Indicated by the diminished trans
actions in stocks and bonds on the
New York stock exchange.
Large Issues Of Securities.
The source Of the pressure upon
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 Brussels
showed that the total issues through
out the world averaged for the five
years ending with 1906 about $S.4o0,-
100000 annually. In the United States
issues of stocks for the first eleven
months of 1907 were $757,359,500 and
of bonds and notes $1,073, 800, 900,
making up total of 1881, 349, 500.
The extent to which capital re-
sources had been strained was not re-
vealed in a striking manner to the
general 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 suf-
fered. The loss Of 70 points in Anal
gamated Copper in single day, 81
points in American Smelling, % in
Reading and rs in Union Pacific, added
to considerable previous declines at a
slower rate, wiped out margins, com
PEELED the calling of loans and wrecked
the fortunes of many spectators.
Great Break in October.
The market recovered only slowly
during the spring and early summer,
to suffer new reactions in August; but
it was not until mid-October that the
storm broke in all its force with the
collapse of the corner in United Cop
per, 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 eliminated
Events moved fast on the heels Of
these revelations. The Knickebocker
Trust company was closed October %
after paying out about $S,000.000 in
cash; and runs began upon the Trust
Company of America, which called for
the disbursement of s34,000,000. and
upon the Lincoln Trust company
which suffered a nearly proportionate
loss of deposits. The suspension of
cash payments by practically 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.
Measures Of Relief.
Secretary Cortelyou carried to New
York and deposited about $4,000, 900
OF public money In the national banks
of the city. Foreign exchange, which
had been adverse, fell to the gold i'm
port point and by November 10 en-
gagements of gold for import had
reached s50,0000O0 and before the
close of December about 100000, 600.
Notwithstanding these measures Of
relief, the country banks and the pub
lie swallowed up in the week ending
November 2 about $60,000,000 in cur.
rency. Government deposits amount
ing to nearly $SO,0oO.OOO disappeared,
and a loss in cash reserves of the
banks was disclosed of $30,601,80O.
Then Secretary 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 $50,000,000 in two
per cent Panama canal bonds and
500, 100000 in one-year certificates
bearing interest at three per cent.
This announcement, accompanied by a
vigorous letter from President Roose-
welt, did much, In the opinion Of many
bankers, to stay the panic, SO that
eventually 1t was necessary to issue
only about s25,000.00O of the bonds
and $15,000,000 of the certificates.
Conditions Are Much Better.
The old year ends with prices OF
commodities and securities much
lower than year ago and with liqui
dalton largely advanced in the bank
ing field, IL not in the field of com.
modities. The great stock OF currency
absorbed 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 depos.
its Of public money In the banks will
tend 70 check the outward movement
of gold which In some quarters is ex-
pected within the next few months.
The financial structure OF the coun.
try has stood the strain with only a
limited number Of serious disasters