The Washington herald., 1911-10-08


l-l marks jw" important American an
nivcr~arir>. on Octobcl =, 49,, Colum-
hus discovered America. and on October
T.. IHN1. npGan the mosr serious money
panic in the experience Of the country,
marked hy the most StUpcndOus issue of
Unauthorized or wildcat currency in the
history Of modern nations. OF the two
events the latter is unquestionably OF
>reater concern to the average business
man. for. while Columbus is not likely
TO discover America again. nothing has
been done as Vet 10 prevent a recurrence
Of the conditions that made 1907 a black
letter year in the memory Of most Amer
lean citizens.
EN ents moved 50 rapidly and in such
'"nfusiOn during the closing months Of
1907 that many of the developments of
he panic and the devices used in the at
Tempt to stay its course are unknown
history to the avera sc citizen. Probably
NOT one person in Io."v is aware that tho
pc"pIe Of the United States were carry
Ing on much of their business during the
latter part Of 1907 with substitutes for
money such had not been seen in any
Other country in century or that the
premium on coin reached A higher point
than it ever did in Europe i'm modern
times except on one occasion I'm France
during the Commune. Few except resi-
dents of the Pacitir Coast arc aware
that as an incident of the panic the
pCnpl" OF California had n continuous
holiday Of more than seven weeks. Thps,.
holidays were declared from October 81
l." December \. in order TO enable the
l"nks TO decline payment and to pre-
vent the forcing Of collections that would
have driven many business houses into
hankruptcy. In Nevada and OREGON sim
llaE holidays we're declared for shorter
periods
Pay Checks in PIttsburE.
In PttsbuG 81 u"".on" or Iay checks
were issued hy various concerns and
throughout the country $J0uGon. GO Of rsui,..
money was issued-much ol it real Wild
"at currency made useful only BY COM
mon consent OF the people. In nearly
very large city of the country bank paw
mNnts were partv suspended. As they
were in 4 vast uumbcr Of smaller naces
ono village in Georgia of only 400 ponu-
lation resortinG to the issue Of certif
Gates in lieu of cash.
I'n to the middle of October, 1877 tho
business situation Of the country was re-
Carded as highly satisfactory While there
had been predictions from financial ex-
J"flS "I SeElOuS recession in the eXpan-
sion which had been proceeding at a ire
m"ndoUs rate for three years there was
nothing in view to suggest to the ordi-
nary man any greater likelihood of an
immediate and serious interruption of
prosperity than there had been for a year
nr more before. In fact. the bank state |
>nCnt at the beginning of September. 1907. |
was slightly more favorable than il had |
been year previously.
In the old ia Shio0c6 school
used to be story of loose stone that
set an avalanche in motion. II was So |
with the panic. The stone that SET II |
going was a seemingly unimportant hap-
pening in New York. an event that or
dinarily would have caused scarcely a |
perceptihle local furry |
4 well-known conner sDacrIa+or ba5
been trying 10 engineer corner in the |
stock of a copper company. With his as |
sOciates ne controlled the Mercantile Ma
tOnal Bank, relatively small institution |
Four other banks. of which the largest |
was the Bank Of North America. were !
held in speculative control by men asso-
ciated IN one way or another with the |
interests dominating the Mercantile Ma
the copper corner. the withdrawal of !
deposits and the fact that their funds
were tied up in unmarketable securities
these banks were unable To meet their
ha lances at the clearing house. The total
deposits of the five institutions were /
only $j6,o00,00 In response TO their re-
Iuests for assistance a committee of the
Tearing house examined their affairs. en-
forced changes in their management and I
raised a fund Of $I000O,O0O to tide them
over their difficulties. At various times
many banks have undergone similar reor-
witnort any unfSvOrable after
effects. These events took place in the !