Jasper County Democrat, Volume 10, Number 32, Rensselaer, Jasper County, 9 November 1907 — PREVENTION OF PANIC [ARTICLE]

PREVENTION OF PANIC

Subject Now Engrossing the Attention of Financiers and Statesmen. COSTLY LESSON IS DRIVEN HOME * Position of Trust Companies Held Largely Responsible. President Urged to Call an Extra Session of Congress— Representative Fowler Advocates * Credit Currency. New York, Nov. 4.—The ■which have had to be met in the recent crisis have given a strong impetus to the movement for providing increased bank currency, and is expected to induce early action by congress to authorize new forms of bank note issues. The experience of the country In a period of high prosperity and active business and Industry, and. with the banking position sound and solvent in coming almost to a deadlock for lack of means to make banking resources quickly available for the needs of the circulation has made a deep impression in inculcating the need of an emergency circulation which can expand quickly In such time of need. Position of the Trust Companies.

In another direction it is practically certain that measures of correction will be adopted for the trust company position at New York, which is now seen to have proved the weak link in the financial chain. Here again the solven<y of institutions did not avail to meet sudden demands of depositors without recourse to the banks for assistance, the assistance thus rendered proving the strain that precipitated the crisis. The Clearing House banks for several years have voiced their discontent with the trust companies’ position, which was due to the great growth of these institutions and their undertaking of purely banking functions in ths acceptance of large deposits subject to cheek and to payment on demand without obligations to maintain cash reserves in the proportion enforced on the banks. Efforts of banks to coerce the trust companies in this regard led to the withdrawal several years ago of most of them from the privilege of clearing through the banks. Extra Session of Congress Urged.

Apropos to this subject of financial stability a Washington dispatch says It has been learned there from undoubted sources that President Roosevelt is now being urged to call an extra session of congress to deal with the flnnncial situation. The request comes from and represents the judgment of the Conservative leaders in the financial world, who have represented the present situation as one compelling action of a character which will affirmatively eradicate all ground for suspicion of industrial methods in the United States. On the other hand there are those, it is said, who hnve told the president that an extra session might do harm by emphasising in the public mind apprehension of unfavorable eondltlonss that no not exist. CREDIT CURRENCY THE CURE Representative Fowler, of New Jersey, Is of That Opinion. New Tork, Nov. 4.—That permanent relief from the present monetary stringency can only be had through a system of credit currency adequate to meet the requirements of trade, and redeemable in gold coin, was the opinion expressed by Representative Fowler, of Kew Jersey, ehairman of the banking and currency committee, which will, at the coming session of congress, endeavor to have a law passed providing for credit currency issued by the national banks. In discussing the mattor Fowler said that evidence of the essential soundness of underlying business conditions was abundant, in spite of which publie confidence has been Shaker, and credit seriously affected. He said to the Associated Press: "The cause of the currency stringency is that there is scattered broadcast throughout the country—-at the mints, in the wheat, corn and eotton fields, in the pockets of the people or locked up about $1,800,000,000 of the reserve money of the United States, most of which under a proper condition would be tn the banks serving as reserve. • • • If these reserves now scattered broadcast over the land were tn the banks where they properly belong there would hare been no money panic this fall.”