The Dominion. THURSDAY, OCTOBER 17, 1907. THE FINANCIAL PANIC.

Dominion, Volume 1, Issue 19, 17 October 1907, Page 6

The Dominion. THURSDAY, OCTOBER 17, 1907. THE FINANCIAL PANIC.

_ Tiie depression on the New York Stock Exchange has been reflected in London. That was inevitable, because London and New York are closely bound together by finance. A considerable number of American securities figure on the official list of the London Stock Exchange, so that what affects New York affects London to a large extent. The depression in Wall Street appears to be a good deal worse than the cables indicate, for it has compelled the millionaires to come to the support of the market. Whether Mr. Pierpont Morgan and the other millionaires will succeed in checking the' demoralisation remains to be seen, but we are afraid it is. more than they can accomplish. The. trouble is deeprooted —it is the natural reaction after a period of inflation of over-capitalisa-tion, and the market must get back to the normal. The depreciation since the beginning of the year has been very great. TJp to the end of August, according to the figures of the " Bankers' Magazine," London, dealing- with 387 securities on January 21 was official list of the London Stock Exchange, the depreciation amounted to the huge sum of £345,147,000, a drop of 9 per cent. The total value of the 389 securities on January 21 was £3,843,177,000, and on August 20 the value had dropped to £3,498,130,000. American Railways, which in January were assessed at £438,520,000, were in August down to £327,034,000: that is to say, in seven months there was a loss of £111,486)000, or more than 25 per cent., and the depreciation has continued since. The loss has fallen upon rich men, but even rich men can--not long endure such losses. It has been the boast of New York that, with all the financial troubles, no financial houses of any consequence have become insolvent; but with this present slump, we think failures will be many. The weaker ones have no doubt already given in, and the demoralisation that Mr. Pierpont Morgan is endeavouring to check is probably due to this. The position is made worse when we consider that the Secretary to . the United States Treasury has afforded the banks considerable assistance by way of deposits of Government funds; The depression in New York will cause pressure on London for credits and cash, and therefore there, is a probability that the Bank of England discount rate will be advanced to 5 per cent. The withdrawals of gold from the Bank have been somewhat pronounced during the past fortnight, and, _ although the central institution is in a better state to meet the demands than a year ago, the 'collapse in New York greatly complicates the position. If there is an advance in the Bank rate we should hear of it by cable to-day. The depression.in the metal markets,has been another disturbing factor, and even theSydney Stock Exchange has been affected. There was almost a panic in the Mining Section on Tuesday, the fall in securities during the day running into some thousands of pounds. The metal markets continue to look weak, and a further decline in values may be expected.