MONEY PANIC.

Dominion, Volume 1, Issue 21, 19 October 1907, Page 7

MONEY PANIC.

$ MORGAN FAILS TO SUPPORT THE MARKET. STILL UNSETTLED. FRENZIED SELLING ON WALL STREET. BT TELEGRAM—MESS. ASSOOUTION7-COPYBIGHT. New York, October 17. °* Demoralisation .on Wall Street, accompanied by frenzied soiling, nearly precipitated a panic. Mr. Piorpont Morgan's effort to strengthen The markets are still unsettled. The losses ranged from threo to seven points on tho stocks affected. Tho markets aro stiil unsettled. London, October 17. Tho market for American stocks is dull, and quotations lower. FAILURE OF A CERMAN BANKER. HUGE LIABILITIES. , ' ' (Rec. Oct. 18, 10.18 p.m.) Hamburg, Octobor 18. Tho Bourso is excited owiug to the failure? of Messrs. Haller Hoehlo and Company, i bankors. s The liabilities aro stated to be from £600,000 to £1,250,000. WALL STEEET DEMORALISED.'. Tho Now York Stock, Exchange is passing through another panic, which appears to bo quito as s'evore as the crisis of March last. This panic commenced last Saturday, and iu spito of tho efforts of Mr. Piorpont Morganand other millionaires to check tho demoralisationt tho developments since show that tho woll-meant efforts of tho financiers .have proved futile. Thero has been frenzied sell- ■ ing, and. tho losses ranged from three to seven points on tho stocks affected. This' means that the stocks have declined 3 dollars to 7 dollars each, but tho selling appears to bo confined to a certain class of stocks. New York is suffering from the effects of " frenzied finance." Mr. Henry Clews, of Now York, in his financial circular of August 27 last, says: . —"General excesses, such as over-extension of credit, ovor-issuo of securities, and ovor-conn-dence have been tho man and tho natural reasons for recent reaction. ' Of course, with .tho market in a hyper-sensitivo condition, investors and speculators aliko are naturally more or less frightened at the anti-corporation crusade. There have been some rather mdis-_ oreet official utterances concerning the Government's policy in prosecuting corporations; and tho,anti-railroad feeling displayed m many of the States is naturally disturbing at this time. Nothing, however,' that the administration could have said or done 'at this time could have checked the receut downward movement. Liquidation from natural causes ■ was inevitable. It has been predicted in theso advices for months past as tho only ' means of righting the money and -security markets. Whether the cure is complete or . not remains to bo seen. It is doubtful if liquidation has yet run its .full .course, and, if not, still 'lower prices must be anticipated, i although wo may havo a fair temporary recovery.'? ..■'„• ..... ; In dealing with this financial crisis in our ' editorial oolumns on Thursday we said:— The i depression in Wall Street appears to bo a good ■ deal woreo than tho cables indicate, for it has compolled tho millionaires to como to the support of the markot. Whether Mr. Piorpont Morgan and tho other millionaires will suc- ■ ccoa in . checking . the demoralisation remains ; to bo soon, but wo'arc afraid it is nioro than thoj can accomplish. The trouble' is doopi rooted—it is tho natural reaction after a period ! of inflation, of ovor-eapitalisation, and tho I maikots. must got back to normal." . , ; ' ; '~'. .'LOCAL OPINION. A local bank manager, who keeps in touch ; with-financial operations in 'all parts of tho ■ world, says that tho inuatcxL values of railway ' and othor American otocks havo been greatly ■ depreciated by tho action of President Roosoi volt's activo crusado against tho big trusts. ' The panic on Wall Street would bo occasioned i through, the inability of buyers of stock at: a ■ 'Certain prico to pay, now that depreciation has : set in so seriously. To ward. off the evil day i they havo probably been paying "contango' i to tho seller (consideration for extonding tho i date of settlement), until tho latter's limit of , endurance lias given out, and he has been i forced to sell at any price ho could got (on . th" buyer's behalf) to savo his own skin. This 1 crisis would not affect New Zealand in tho , least degree, nor would its effects bo far-reach-i inV even in London, except through Paris, • which has been advancing nionoy. to America, ; while London'has for some timo past set its ! faco steadily against advancing money for ■ speculation in Amorican stock. As far as New . Zealand was concerned, thero < was no fear of , anything occurring, as, in his caso, tho houso that supplied his bank with "tho sinews of war"' nover touohod American stock, and that sentiment was pretty general in London., ,In strengthening his opinion, our informant said that a year ago, when tho bank rate reached six, per cent.. in London, Now Zealand was quito unaffected by that extraordinary position. ".] .: GETTING TO BED-ROCK. ' Taking tho worst view—ahd this might bo tho best thing that could happen—if panic onsued, and a smash came, it only means that i the. writtcn-up value of railway: and other stocks and bonds would disappear into thin air, and tho I 'stock would bo on bed-rock. Whati ever happened to' railway stock, there is always j the track, the rolliug stock, tho trade and properties as the bed-rock assets for the stock or , Panic, would mean "getting rid of the water." What was probably an accen-' t tuating influence was 1 the want of cash for ,'- the transference of the corn and whoat from • Middle and West to the East. This was .now i tho autumn, and thero wa3 the farmer to bo ; paid for his crops—and. he wanted cash. I A MERCHANT'S OPINION. Mr. Walter Nathan (of tho firm of Messrs. 'Baunatyhe and Co., Ltd.) said he thought a great deal would depend on tho extent to which tho London Stock Exchange had been affected. Evidently there must havo been some stringency on tho British Exchange, judging by latest reports. No doubt tho present condition of affairs in both centres was duo to President Roosevelt's attitude towards tho big trusts in , America. It was, he thought, only natural that a feeling of insecurity as to what further steps were likely to bo taken by the American Legislature should havo'had a disquieting effect on investors in both America and England. Personally, he did not think thoLon--6 don market had been materially affected, as 3 tho crisis had been foreseen for 6omo timo past, and, no doubt, tho "knowing ones" had unx loaded their stocks.