The Nezperce herald. (Nezperce, Idaho) 1900-1957, 1920-12-16

" studied by every business man,
whether his business be farming
or merchandising, and by every
one else interested in the CONNER
cial life of our country.
W on can liken the business and
u financial world to a crowd in
the theatre. When the show
is going along smoothly everyone is
happy, but let somebody yell fire s
and in an instant a part Of the audi
ence is surging mob trying to get
out Of the doors. Those who lose
their heads, of course, make all the
noise and take up the most room;
they block the exits in their frenzy
and keep themselves and others
form getting out. While the fire it.
self may be serious. the stampede is
usually more so. You can have the
panic without fire; the mere men
ton Of fire will start stampede.
Until within few years, fire and
panic were inseparable.
But nowadays we rarely have 4
theatre panic; the law compels the
provision of large number Of ex-
its and also insists that they be
plainly marked. The theatre pro-
grams contain warnings OF what to
do in the case of fire, and when fire
does come the audience as a rule
passes quietly out. There is seldom
panic.
It is quite the same in business.
1t used to be that we would go along
happily for about 20 years or so en-
ioying ourselves in the theatre OF
prosperity, when all of a sudden
some great bank or banking house
would fall, somebody would yell
"panic" and everybody would, so to
speak, rush for the same way out.
The people would all try to get their
money out Of the banks at once, thus
forcing many to suspend payment
Excited men would stop business
and rush around trying to force
debtors to pay up, at the same time
refusing to pay their own bills The
factories would close down, throw
ing people on the streets. The heart
of business would stop beating. And
Just as in the theatre there may or
may not have been any fire.
Continuing the comparison, the
number of people injured by the ac-
tual business fire is nothing to the
people hurt in the mad scramble to
get out. Even in the old time the
atre there was seldom reason for
panic; there were usually exits
enough if the people did not start to
push. But few ever stopped to think
Of that. Panics of any kind result
from emotion and overpowering
thought. There is no reasoning with
them, but the basis of the fear that
promotes them may be taken away
Making more exits and marking
them, as well as instructing the peo-
pie what to do in the case of fire
has taken much of the danger of
panic out Of the theatre. Following
the same thought, the country
the Federal Reserve
banks, which not only permit
the people to get out in the
case of a financial fire, but what is
more important, show them before
hand that there are plenty of exits,
whatever the emergency, and hence
no one needs try to climb out over
the back of his neighbor.
There are always some frightened
souls who will talk financial panic
md give as reason therefor that
We have had panics in the past. But
n the past we did not have the fl
,ancial exits marked; now they arc
marked. Therefore, although some
hing might happen which would
,ause a few people to lose their
leads, not enough could possibly be-
ome so excited as to forget that
here were ready exits, and hence
he danger Of another financial pan
c in this country is so small as to
'e negligible We shall not again
ee anything like the great panics Of
873 and 1893 nor the short panic
# 1907, and the still shorter one Of
914 And / shall try to explain
Why
A depression in business, howev-
Il, Is not 10 De confused WIN a pail
G. A financial panic is exactly
What the word connotes a wild,
scramble and it is al
Ways the panic itself, not the under
ying condition, that causes the
disaster. On the other
land, periodic depressions in bust
less are as beneficial as rests on a
ong journey. The general business
ondition which precedes a period
f depression is called "crisis,
nd the average man does not know
hat there is crisis until it has
ONE and gone. 1t hits, as a rule
My those who are conspicuously
L IL