U.S. 1907 - The panic year's story

History for ready reference from the best historians, biographers, and specialists, their own words in a complete system of history for all uses, extending to all countries and subjects, and representing for both readers and students the better and newer literature of history in the English language; Vol.7, 1910, pag.264
https://ia800205.us.archive.org/15/items/historyforready07larn/historyforready07larn.pdf




1907. — The panic year's story may be told without further introduction, summing up thus its characteristic events:

(1) Withdrawal by Europe of the capital loaned to us in 1906, leading,  early in the year, to $32,000,000 gold exports to Europe, of which $25,000,000 went to France :

(2) Partial withdrawal of their capital from Wall Street by interior markets, which were said to have had $400,000,000 outstanding in New York during 1906 ;

(3) Distress of the immensely wealthy capitalists who had tied themselves up in the Wall Street speculation of 1906, their forced liquidation on an enormous scale, and consequent demoralized Stock Exchange markets in March and August ;

(4) Very abnormal crop weather throughout the spring and over nearly all the world, with a resultant shortage of the whole world's wheat crop, the deficit of supplies below expected requirements being probably the largest since 1890.

(5) Revelation of unsound banking practices at New York in October; leading to the failure of the Knickerbocker Trust, a formidable run on the banks, adoption of Clearing House certificates in all the larger cities and issue of emergency credit currency in many ; to restriction of cash payments to depositors throughout the country,  to a premium on currency, to complete demoralization of interior exchange, and to insolvency of several large industrial companies and numerous banks — neither, however, reaching the number which shortly followed the panic of 1893;

(6) Import of $100,000,000 gold from Europe during November and December, most of it bought at a premium and some of it engaged with sight sterling at 4.91;

(7) As a result, large inroads on the Bank of England's gold reserve, rise in the bank rate from 4 1/2 to 7 per cent., rapid advance of all continental bank rates, and loan of large sums of gold by the Bank of France to the Bank of England.

(8) Precarious position of financial Germany throughout the year, important failures at Hamburg, minor financial panics in Holland, Egypt, Italy, and Chili, many of them before our own ;

(9) Intervention of our Treasury, which wisely placed all its surplus on deposit with the banks in October, and most unwisely undertook to issue $150,000,000 bonds and notes in November to provide basis for new bank-note circulation ;

(10) Recovery in markets late in November, with slow return of the bank situation to normal, the currency premium at New York lasting longer than in either 1893 or 1873;

(11) Discharge of laborers from employment all over the country, and the beginning of severe trade reaction — all this in spite of the largest annual gold output in the history of the world.