The Ellensburg dawn. [volume] (Ellensburg, Wash.) 1898-1914, 1909-01-14
Aftermath of the Panic
On The Pacific Coast
Novel Method to Protect Banks During Panic-Lega.
Holidays for Nearly Two Months "Wheat Money" AS
Substitute for Currency-By Benz Cohen Portland,
THE panic OF 1907 struck the Pacific
l. coast like thunderbOlt out OF .


L coast like thunderbolt out OF u
clear sky. 1t is true that pruder,
bankers were apprehensive; but the,
! little expect ed the severity OF the storm
that was soon to break upon them.
This mental attitude OF our banker,
was due to the fact that tho Paclti,
wealth. It's manufactures, while com
paratively limited in extent, have
nevertheless prospered; but the pro
ducts of it's fields. it's for. SITS, It's mines,
It's queries and it's fisheries have al.
ways heen easy to convert into coli .
and consequently the spirit Of specuis
ton has been but lillle in evidence
with the expectiOh of few operator.
in mining stocks in California. 1t l.
true that land specula'iOns have rageG
from time 10 time. Bat these dealing,
in ard have usual, been marked b,
The pa.lnent OF IL sufficient part OF Tia,
purchase price To take them out OF the
category Of ''mars ined' transactions
and rather to class such operations a.
the merchandising of land.
Therefore, when our bankers upon
that memorable morning of October -
1907, received from their Eastern cor.
respondents kilograms to the effect
that they conid no longer honor our
drafts for coin or currency, and W,
we're thus apprised OF the fact that our
Eastern balances were almost unavail
able, the surprise was naturally pro
found and the feeling engendtred
almost one of dismay.
PROTECTED BY LONG HOLIDAY.
When the bankers Of Oregon ano
California found that they could not
draw their Eastern balances, they wer,
confronted with a peculiar legal provi
sion, in Oregon aud California, the a,
tachment law was of such stringent
nature hat any depo,itOr in a bani
whose cLe was refused payment cUulu
at once levy an tachment, and thu
provoke Il run or close the bank. It
order to guard against danger frou
this source, it became absolutely neces.
>ary to resort To the shield OF legal
holidays In Oregon they began ii
midnight on October %, 1907, and cam,
TO "a final end at midnight on December
II, 1907. In California they were OF
substantially the same duration. IT,
the State Of Washington, as there wa.
no such attachment law, tina holidays
only lasted few days.
RESORTED TO "WHEAT MONEY"
Clearing house certificates were yer,
generally issued for use between tb'
banks. In my own city of Portland, tht
maximum amount of such certificates
vas Sl.00O,0oO They were all paid of
by February ,, 1908. Ia order to pro
vide currency for use by the public,
the banks Of the Pacific Cost resorted
to the use what we in Portland called
''wheat money" This wheat money
was issued in denominations of 81, 81
S., $40 and $50. 1t was absolutely as
good as gold; and | have known United
States currency and bank notes to be
paid for it by at least one bank in order
TO encourage it's use. The wheat
money that was issued by the clearing
house banks of Portland stated that it
was secured by deposit of $50 per
cent of notes, bills of exchange, and
other negotiable instruments, secured
by wheat, grain, canned fish, lumber
actually sold and other marketable
products and bonds approved by the
clearinghouse committee. The Port
land clearing house banks issued 81
422, $50 OF the currency, every dollar of
which was paid Off, or actual gold
deposited to be held against it.
When the holidays came to an end.
the solvent banks Of The coast were
ready to meet such demands as might
DO made upon them, and business
started up without shock or disturb
unce. There was little or no demanu
for usual amounts OF money. The p,o
cteds of the excellent crop I'll wht a.
rapidly became available, and the OF
products of the soil uiso yielded ,hei