Yorkville enquirer. [volume] (Yorkville, S.C.) 1855-2006, 1914-02-20

received by their issuers and certain
other affiliated firms. Laborers had to
accept them for wages, and shops,
stores and places Of amusement in the
neighborhood of their issue generally
accepted them because no other legal
currency was available, and it was the
only way that business could go on.
But they were not acceptable in other
towns and cities, and so exchange and
trade between cities came to a stand
still. Such notes were Of great variety
as regards their security and the terms
of the issue, but they were generally
printed to resemble legal tender paper
and were issued for the ordinary cur
rency denominations.
The Money Here, but Locked Up.
During all Of this time there was
Just as much real, legitimate money in
the country as before. In fact, there
was more, because about $75,0O0,00O
was imported from Europe during tho
panic But it was locked up in the
boxes Of safe deposit companies, in
safes and stores and stockings, and,
above all, and this is point to remem-
Der, much Of it was locked up in the
vaults Of the banks themselves The
$4,000 Independent banks Of the coun-
try were so singularly unrelated to
each other that the majority Of them,
with the first suggestion Of trouble
forgetting for the time being the So
lidarity Of their mutual interest and
their common responsibility to the COM
munity at large, had entered upon a
contest with each other to obtain what
money they could, and, Aspending cash
payments, they had boarded whatever
they could lay their hands upon. This,
indeed, was the most serious and the
most characteristic feature Of the panic
Of 1907.
I have dwelt at some length upon the
circumstances Of the panic Of 1907, in
order that you may realize the scope
and bearing Of the evil which banking
legislation is intended to cure. You
must also bear in mind that this amaz-
ing and lamentable condition Of affairs
which occurred in the quiet autumn Of
1907 had also occurred in this country
several times before and similarly
without any apparently sufficient pro-
vocation in the outward circumstances
Of the time In 1893 and twenty years
before that, in 1873, and sixteen years
before that in 1857, and twenty years
earlier, in 1887, and nineteen years be-
fore, in 1918. majority Of the banks
had suspended cash payments.
We Alone Suffered.
Moreover you must remember that
no such condition of affairs had occur
red in other banking countries, except
in times Of war, within the memory Of
any living man. There have been no
general panics in Great Britain or
France for more than half a century.
There have been great banking failures
like that of the Barring Brothers in
1890, or the Bank of Glasgow in 1878
or the Compton d'Escompte in 1889,
but in all of these cases the collapse Of
business has been confined to the To-
cality of the failure, and to those di-
rectly concerned with the firms in
question.
banking reform has been to find a way
to reorganize our banking system so
that we might avoid in the future the
disgraceful struggles between the
banks Of different localities and the en-
suing disastrous collapses Of general
business which we have experienced
time and again in the past, and from
which the business Of other important
countries is exempt.
Diagnosis of Banking Ailments.
In the winter following the panic Of
1907 there was the greatest diversity Of
opinion, even among those who would
be reckoned expert in this field, as to
the reasons for our banking Difficult
ties. There were about as many pro-
posed remedies as there were individu-
ais who had devoted their attention to
the subject.
During the session Of congress in the
winter of 1908 over three hundred bills
relating to banking and currency were
introduced in the two houses Of con-
gress and finally, after prolonged de-
bate, as no permanent agreement could
be reached, temporary Act was pass
al inh 70 ha
erative for six years, or until June 80,
1914. This was the So called Aldrich-
Vreeland Act, which required the i'm
mediate printing Of five hundred mil
were to be stored in the treasury for
issue to any bank which required them
upon deposit of satisfactory collateral
and upon the payment of a heavy tax.
never been issued, and probably would
never have been issued except in an
extreme emergency, because an appli-
cation for them on the part Of any
bank would Immediately have been
construed as a confession Of weakness
and impending trouble.
The act was Of vast Importance,
however, because it provided for the
appointment Of the national monetary
commission, which was charged with
the investigation Of conditions in this
country and elsewhere and with the
formulation Of plan for permanent
banking reorganization. In the course
of the following three years this COM
mission studied banking arrangements
in all Of the leading countries and pub
lished a series of some forty volumes
upon the subject, which presents what
is perhaps the most thorough and sci
entific investigation Of an economic
subject which any government has
ever published and which constitutes
a monumental landmark in the history
of banking literature.
Learning What We Needed.
AS a result Of these Investigations
there gradually developed throughout
the country substantial unanimity
Of opinion as to what primarily allied
our banking system and as to what in
general were the appropriate lines Of
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