Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-10-08
HOOVER PROPOSAL
RECALLS 1907 PANIC
Late ]. P. Morgan Solved
Financial Crisis by Call
ing Conference.
BY MARK SULLIVAN.

President Hoover's action to restore
the country's credit structure partakes
in part. of the kind OF leadership as
suned by President Wilson in wartime,
and. In part, the kind the late J. P.
Morgan took to bring the panic of
1907 to its extraordinarily rapid end.
Some Of the instrumentalities set up
by President Hoover and some Of his
technique are directly modelled on
Woodrow Wilson'S agencies. notably the
potential revival of the War Finance
Corporation. which was begun by Pres
1dent Wilson.
Some other portions of Mr.. Hoover's
program might properly have been in
itiated within the banking community.
Substantially the entire work of end
ing the 1907 panic was taken on by
the late j. P. Morgan, and the mere
public specific of his summoning to
his office the outstanding financial
leaders of that day played a large
psychological part in ending the panic.
Theodore Roosevelt, who was President
at that time, did not attempt to take
responsibility in ending the 1907 crisis.
Banking Leader Lacking.
1t has turned out that in the present
depression no such outstanding leader
ship as that of the late Mr. Morgan
was evolved within the present bank
ing community. This lack Of a clearly
dominant financial leader was one of
the conditions that put upon President
Hoover the role he has taken.
Mr.. Hoover made out a nine-point
program consisting of steps to be taken
partly by bankers, and partly by the
Government. This program he placed
before group of Is New York bankers
at conference summoned by him in
washington Sunday night. After an
evening of discussion with President
Hoover, Secretary Mellon. Gov. Meyer
OF the Federal Reserve and Undersec-
rotary Of the Treasury Ogden Mills,
and after further conference of the
bankers among themselves in New
York the following day, they agreed to
the program, with immaterial modifica-
tons. One step, designed to help the
status OF the railroad bonds, in which
savings bank funds are invested, was
deferred for future action.
Endorsed by Leaders.
Some of the bankers. realizing the
magnitude of the program, and ex-
aiming 1t with the scrutiny any bank
er must give to such a heavy commit
ment, expressed at the end rather ex-
allied admiration for the soundness Of
siveness. One financial leader, who
happens to be conspicuous Democrat.
after being made familiar with the plan,
Endorsed 1t and in speaking of 1t en-
phastzed the thoroughneSs with which
1t met every existing condition, and the
cautious foresight with which it took
care Of possible new conditions that
may arise.
Mr.. Hoover's first conference was
with the bankers, because they hap
pened to be close at hand in New York
and elsewhere. Meanwhile he had
summoned to Washington the leaders
and appropriate committee members of
Congress of both parties. At the ear
lest moment after they could arrive.
Mr. Hoover on Tuesday night presented
his program to them
The discussion, lasting nearly three
hours, was full and frank both be-
tween Mr.. Hoover and the congressional
leaders and between groups and indi-
viduals among the leaders. In the end
the plan was Endorsed with slight modi-
fications and with some material
reservations as to minor parts of the
program by a few of the congressional
leaders
Each Had Own Policy.
That the leadership in this crisis
should come from washington rather
than from the banking community is
due in part to the fact the financial
community did not during two years
Of depression happen to develop any
outstanding leae'or whom the others
would willingly fo.'0w.
The great banks tended to follow each
its own policy. This condition threw
the burden of leadership out Of the
panic upon Washington. The fact has
some elements of good fortune. because
some Of the steps needing to be taken