Historical Newspapers of South Carolina

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With COUNTRY BANKS ON STRIKE COULD WALL STREET LIYE? New York Banks Were Saved by Withholding the People's Money. What If the Interior Banks With held Money From New York? (By Cusarles Albert Collman) Late one November evening, chill, dark and unforgettable, I felt the fin ancial district of New York. In the skyscrapers looming upward, the windows seemed blae kand gaping holes. From the bay, at shuddering wind swept up Manhattan Island, that struck one of the bone. It was the kind of night when men raise the collars of their ulsters well above their ears and hurry homeward, grate ful 'at the thought of warmth and comfort. Attempting to cross Wall Street, I was stopped by a long line of men in single file. They stood there shiver ing, their haggard faces nipped with cold. Some sat on camp stools. A few were drinking coffee from bottles and munching sandwiches. They were about two hundred in number, some old and gray-haired, many young in years, down to the age of boyhood. This file of humanity stretched from Broadway, opposite Trinity church. yard, along Wall Street to a point between the oflices of J. P. Morgan and Company and the National City Bank. Jt ended before the doors of a large white building on the south side of the historic stree. It was then nearing eight o'clock. The people had been posted there since the close of banking hours that afternoon. With sullen determina tion, they were going to remain sta tioned on the sidewalks for the next 14 hours, sleepless in the terrible cold of that November night, so they could be the first in line when the doors of the Trust Company of -America would open at 10 o'clock the following morn ing. It was a nig'it that had succeeded one of the grim days of the Rich Mens Panic. For weeks, dense crowds had filled Wall and Broad streets, ner vous, curious and questioning. They had packed the high steps of the Sub Treasury Building in their anxiety. The district had, in fact, been black with people eager to ditness one of the most remarkable demonstrations of modern times--the greatest and longest bank run that has yet occur red in financial history. Stretching patience and endurance to the breaking point, these night watchers were hoping to get back the money they had placed in a Wall Street institution. They little knew that they were only the pawns of great financiers who had foreseen an emergency. Few o fthem dreamed that the ex traordinary scene in which they play ed their parts, had been staged within the walls of powerful banking houses. For more than a year, a furious gamble had been in progress. Now the greatest of all the gamblers, the men who controlled Wall Street, were making the country pay the costs of all the dreadful hazards that had been taken. The financial catastrophe had been precipitated by wealthy speculators. A crowd of copper men had attempt ed a disastrous corner in United Cop per shares. As fast as they garner ed the stock, they put it up as collat eral for call loans in a chain of banks and trust companies identified with their operations. Another coterie of brokers had cornered the stock of the Tennessee Coal, Iron & Railroad Com pany, in order to get control of this corporation, which was an iron, coal and steel property extending through Alabama, Tennessee and Georgia. Speculation Ties People's Money The brokers succeeded in their cor ncr in T. C. & I But, instead of suc cess, it spelt their ruin. In buying up all the stock in the market, they had run the price up to $166 a share. On this stock they had obtained from complaisant hankers loans of public nioney dlepositedl in Wall Street insti tutions, aggregating $25,000,000. This immense loan w"as now a frozen credlit. The brokers were unable to sell the Tennessee Company as they had planned. Neither could they pay back their loans. Nor could the banks get baick their money. They did not (lare to l iquidate the collateral of Tennessee stock, for had they tried it, the price of TI. C. & I. wouldl have dIropped to almost nothing, and drag gedl the stock miarket dlown wvith it. A deadlock now ensued in Wall Street-ai period of uneasy waiting, punctuated by dismal forebodings. In the process of building up cor ncrs in copper, coal, steel and steam ship stocks, there had been a period of wvild speculation. In the nine months since the beginning of the year, 1 56,791,0-17 .-ha~res of stock had been traded in on the New York ~Stock Exchange, wvhich represented an actual outlay of' $1 2,233,042.3177. CYPRESS ~ SASH DOORS BLINDS MOULDINGS AND MILL WORK WEAK, NERVOUS, ALL RUN-DOWS Missouri Lady Suffered Until Shi Tried Cardui.-Says "Result Was Surprising."-Got Along Fine, Becene Normal and Healthy. Springfield Mo.--"My back was' M weak I could hardly stand up, and I would have bearing-down pains and was not well at any time," says Mrs D. V. Williams, wife of a well-known farmer on Route 6, this place. "1 kept getting headaches and having to go to bed," continuos Mrs. Williami describing - the troubles from which she obtained relief through the use of Cardul. "My' husband, having heard of Cardul, proposed getting It for mie "I saw after taking some Cardul . that I was improving. The result was surprising. I felt like a different person. "Later I suffered from weakness and weak back, and felt all run-down. I did not rest well at night, I was so nervous and cross. My husband said he would got me some Cardui, which he did. It strengthened me . . . My doctor said I got along fine. I was is good healthy condition. I cannot may too much for it." Thousands of women have suffered as Mrs. Williams describes, until they found relief from the use of Cardul. Since it has helped so many, youI should not hesitate to try Cardui Ui troubled with womanly afilments. For sale everywhere. I.88 Most of these transactions had been carried on margins. In order to facili tate them, banks in the financial dis trict had advanced 80 per cent of the money in the shape of call loans. Country banks iin every part of the Union had hundreds of millions in the shape of demand deposits in Wall Street institutions. And now Wall Street bankers had tied up the bulk of the countrys money in stock gamb ling ventures. A money stringency asserted itself as demands arose for capital needed in legitimate business. The rates for call money jumped to eight and one half per cent, to 10 per cent, and finally one day they advanced to the stupendous figure of 125 per cent. That meant that the broker was ask ed to pay an interest rate of $1.25 on every $1.00 that he was borrowing from his bank. This was more than the traffic could bear. The brokers could not pay off their loans. The banks began to throw the stock col lateral upon the market for any price it might bring, and the Stock Ex change suddenly staggered under the greatest break in prices it had sus tained for many years. Desperate scenes now took place in the private offices of great banking houses. White-haired brokers wept and pleaded with bankers not to set) out their loans. For in the demoraliz ed Street, the first blow fell upon the commission men who had been gamb ling in copper shares. Their firms went dow nlike houses of cards. The Mercantile Trust Company, which had financed them, became embarrassed. The public, calmed by reassuring statements, was as yet unsuspecting. The heads of the great National banks alone knew the danger of the situation. They held a secret meet ing, at which they determined upon a plan to save their institutions at the cost of others, and sustain the corner in Tennessee Coal & Iron stock, from which the banking leadiers hoped to profit. In great cities, when a fire gets be yondl control, it is the custom of fire men to bomb the intervening buildings wvith dynamite to stop the progress of the flames. The National banks that controlledl the destinies of Wall Street dlecidled upon a similar step. Tlhey planned that the force of the panic should be dlirectedl against the trust companies, which in those (lays were not members of the Newv York Clear ing Ilouse. After banking hours that day, one of the largest National banks an nouncedl that it wvouldl refuse to clear for the Kn ickerboeker Trust Company. On the following morning there en sued( a run on the Knickerbocker T1rust, after paying out $8,000,000, (closed its dloors. 'The day before, i ts stock had been selling 'at $1,200 a share.. This (lay its shares wvere not worth1 a dollIari. Its presiden t, Charles 'T. Barney, at once resignied. This im mense failure shocked t':e world. It even became a feature of ribaldry in London music halls. Punish Another, Save Selves Mr. Barney was a Sybarite. He had love.d the beautiful things in life. ie was never accused of wrongdoing, hut he had made the mistake of hav img associated himself with oneC of the speculative groups. Only a short time before this. Mr. Barney had shown mue some of the treasures wvhich he had .galthered in his splendid home. In his foyer was an antique Venetian ceiling. A green stone inantel, which he had~ imported from Italy, filled nearly the entire length of his great dmmig room. Two weeks after the bombing of his trust company, the hanker w'as found lying dead beside this marvel of Italian Renaissance of the thirteenth centur-y, a revolver in his hand and a bullet in his brain. On the day when the Knickerbocker Trust closed its doors, Wanll Street was filled with dlireful rumors. That night, the leaders of the Street held a meeting up town in a private banker's library. The panic wvas still out of hand. They feared that there would be runs on al ltheir banks next morn ing. All this while the newspapers had been true to the best traditions. They ntill reassuredl the public, and reframped from mentioning the name of a single institution against which a rnn might be precipitated. But the suave and polished gentle men who rule W'all Street can show themselves to be0 as hard and cruel as the scaly monstm.s of te Sauria age. To safeguard their own bar*s, they decided to single , out another trust company, and hurl upon it the full weight of the financial storm. They adjourned that night from the banker's library to Sherry's, where, at one o'clock that' morning, the lead ing partner in the foremost banking house called-in the financial reporters and to them spoke the deadly words. He said that the subject of that night's conference had been the af fairs of the Trust Company of Am erica. Even then, the New York press re fused to name Ah ill-fstes.japtitution, with one excepion--a Jewish owned newspaper which enjoys the. fAvor ,of the Street. Early the next morning, Wall Street was packed with the desperate de positors df the Trust Company of America, an institution which boast ed resources of .$76,000,0'00. The .company paid out $12,000,000 the first day, $9,000,000 the second day, and so continued paying daily for a period of some 45 days. As shown before, the depositors camped all night.in the fin ancial district, so as not to lose their places in line. The trust company was slowly bled white. Then the dictators of the Street compelled the associat ed trust companies to advance the unfortunate institution $25,000,000 of their own funds. The order was that the Trust Company of America must not close down. In all, $34,000,000 was withdrawn by depositors during a run unprecedented in the history of banking. The president of the Trust Company of America was Oakleigh Thorne. He stuck to his post without a word, and paid out his mililons until the run was ended. Then he continued the com pany, and paid off the $25,000,000 loan of the asociated trust companies. He even brought his concern back to a point where it once more paid divi dends upon its stock. But the harsh emperors of the Street's arena had turnetd down their thumbs. Their die tum was that Onkleigh Thorne must depart forever from Wall Street, with all woh had been associated with him. I did not see Mr. Thorne again un til the (lay of his departure. When I called at his narrow office on the mezzanine floor of the Trust Company of America building, he was seated, smiling, before his desk, above which hung a sign: "Don't Worry." His hair had turned absolutely white. Thorne said to me: "When the storm broke, to my utter amazement, its chief force was directed against the Trust Company of America. It is idle now to discus sthe reason why. I am going acros sthe river. I have bought the Corporation Trust Com pany of New Jersey, to provide jobs for the boys who stood by me." The National banks of Wall Street had saved themselves, and protected the great pool in Tennessee Coal & Iron stock. Now the exchanged $30, 000,000 in United States Steel sinking fund five per cent bonds for the stock ownership of the T. C. & I., held as collateral under the $25,000,000 loans, and thus, without the expenditure of one dollar, the great Tennessee Coal & Iron property, whose corner had been the mainspring of the panic, fell into the possession of the United States Steel Corporation. While these tragic events were transpiring in Wall Street, how fared it with the country? The banks of the interior-in other words, the country banks-had not been identi fled in any way with the "stock pools" and "stock corners" of Wall Street. The great bulk of the American peo ple had not been gambling in the stock market, and, in fact, knew noth ing of its speculative ventures. And when the approaching catastrophe en gulfed them, it came like a bolt from the blue unknown. Toward the end of October of that year, the country was in need of funds to move its crop~s. It owned an ample surplus of many hundreds of millions. Unfortunately. this money had been intrusted by its local banks to the New York National banks, in the shape of dlemand (de pos5its. Turn Down Country Banks Now the country banks called on Wall Etreet for the return of a cer tain amount of their funds. They little suspected that their millions had already been loaned out to stock gamblers and tiedl up in the fo , of frozen credlits. Their conste ion may lbe imagined wvhen the Net Y'orkl banks coolly replied that the- wvere refusing to ship) coin or el., cency against the dleposit balances of their country correspondent. But it was true. The New York National banks, totally dlisregardling the country's rights and interests, closedl their money vaults, refused to pay out funds, andl kept business go ing betwveen themselves by the in terchange of Clearing House certi fica' Trhey bluntly refused to pay the cost of their mismanagement. They let the country pay. Immedliately, the panic,. boi* in Wall Street, extended its ravages to the Middle West, the South and the 'West. Business men dlesperately of fered high premiums for currency. Manufacturing concerns either closed dlown or reduced their pay rolls by discharging operatives and laborers This was still in the month of Octo ber. Throughout the country, banks findling that their demands for the ire. turn of their New Yoirk (deposits fell on (leaf eairs, were forced to close their doors. They had no appeal from Wall Street's (decision. First of all, the. Rath Trust Company, of Bath, Maine, susipendled; on the saime (lay the Blankeirs Trust Company, of Kan sas City, shut its doors, that day also witnessing the closing of the Dollar Savings Bank, of Akron, Ohio. G. C. COOPER, Licensed Optometerist EYES Carefully Examined, Glasses Pitted, Broken Lenses Duplicated. Satisfaction Guaranteed. SUMTER, St C. ' The actionA of New York caused .bankers in Minneapolis, St, Piul, Du- t luth, Chidago, - Boston, Philadelphia, I Baltimore, Louisville Columbus, Cin- I cinnati,.Des Moines, betroit and other c cities to suspend temporarily the pay.. 8 ment of money on checks, certificates s of deposit or drafts, and to furnish no money to bank correspondents. p No more vivid lesson was ever read to the country on the evils of margin gambling in Wall Street, the specula tion by pools and the cornering of n stocks, than the panic of 1907. The corner in T. C. & I., which made' a e great corporation' richer without its cryving tq 'gxlend a, 4ollar,. ' yp atonged 1i or the uh'bmployed \ teri ihiner, the factory workman who, lost his job, the 'small merchant whose business was sold under the hammer. Long afterward, AlexanderGi ert, then president of the New York Clear ing House, acknowledged the culpabil ity .of the New York banks in the u Rich Men's Panic, in an address to v the Denver Bankers' Convention. Mr. 7 Gilbert freely admitted that the fin- t ancial collapse was seriously aggra- i vated by the extravagant speculation c which had prevailed on the Stock Ex- a change before that time. "Had it b not been," he added, "for Stock Ex change demands previous to and dur- A ing the panic, I doubt if money rates d in the country would have at any time been much more than normal." "But," 'observes the Wall Street i banker of the present day, "all that 1 sort of thing was ended 12 to 14 years i ago. The Street has changed its c methods since 1907, and its ethics to- c day are high." t Do the facts prove this allegation ? Let us see. Has the outbreak of excessive spec- r ulation been modified or diminished or a controlled, as the former head of the e New York Clearing House had hoped ? , No. Today it is estimated in most r conservative circles that nearly one S billion and a half dollars have been p loaned out on call to brokers for t speculative purposes. The amount of stocks carried on. a margin, the number of pools in opera- t tion, and the actual money consumed in margin trading are three times t larger than the figures that prevailed i in the wild days preceding the panic o of 1907. a C State of South Carolina, c Clarendon County. t Court of Common Pleas. t Notice of Sale. Julia C. Tindal as Administratrix of the Estate of L. R. Tindal, deceased, Plaintiff, vs vs. Peter Harvin, Defendant. Under and by virtue of a Decree of the Court of Common Pleas rend ered in above stated action by his Honor Judge John S. Wilson, I, J. E. Gamble, Sheriff of Clarendon Coun ty, South Carolina, will sel Ito the highest bidder for cash, at public out cry in front of the Court House door at Manning, S. C., on Monday, the 7th day of August, 1922, being salesday within the legal hours for judicial sales, al lthe title and interest of the above named defendant in and to the following described real estate: All that tract of land situate in Clarendon County, State of South Carolina, containing sixty-five (65) acres, more or less, adjoining lands of L. R. Tindal, of Estate of Annie Walker, of J. A. Way, of Silcox and by the public road from Sumter to Wrights Bluff, being the land devised by Readus June. Purchaser to pay for papers. J. E. GAMBLE, Sheriff of Clarendon County. State of South Carolina, Clarendon County. Court of Common Pleas. Notice of Sale. David Levi as surviving Executor of andl Trustee under the last Will and Testament of Moses Levi, deceased, Plaintiff. vs. Kate Madison, Clarence Madison, Louis Madison, Julius Madison. and . Willie Madison, Defendants. Under and by virtue of a Decree of thc Court of Common Pleas rend eredl in above stated action by his Ihonor Judge John S. Wilson, I, J. E. Gamble, Sheriff of Clarendon County, South Carolina, will sell to the high est bidder for cash, at public outcry in front of the Court Ihouse (door at Manning, S. C., o'n Monday, the 7th, day of August, 1922, being sakt ' v, wvithin the legal hours for ju al sales, the following L escribed real estate: All that tract of land in C' .,:ndon County, South Carolina, containing one hundred and one (101) acres, more or less, and hounded now or formerly as followvs: North by lands of estate of Gourdin andl of R. J. Aycock; East by lands of Salinas knowvn as the Eliza Bradford lands' South by lands of Joseph Dingle; anm1 West by lands of C. M. Davis known as the Gourdin lands. IPurchaser to pay for papers. J. E. GAMBLE, Sheriff of Clarendon County. The Ba Capital Sur plus a~ Jo Tr. M. MOUJZON, Cash l he speculative hero of, the s oday is a pool operator with a s, Acy istory-he was *nce a partner lt* a oston bucket shop-who is openly onducting an enormous syndicate peculation in a western railway is ue. Market prices bre being demoralized eriodically by a reckless gamble in Iexican Petroleum, in which the bulls oast that they have trimmed the ears to the extent of more than two Millions. Are Wall Street bankers more dise reet today in their'ventures than they vere-in 1907? ,Evidently less so. During the early Lalf of last year the financial district vic. shaken to its foundations by the iscovery that one of the largest rust companies had droppe<. some 50,000,000 in the unwise promotion f a shipping company and a banking ouse, orgainzed to promote foreign rade. Both ventures, launched in Intried fields, by inexperienced men, vere, proved economically unsound. 'he sole reason that this evcnt failed o precipitate a financial catastrophe s the fact that Wall Streets resour es have quintupled since the war, nd the losses were adjusted in secret y the institutions involved. It may be taken as an axiom that Vail Street never alters- :c merely evelops. It is quite probable that a panic, uch as that of 1907, is imposisble of epetition, at least within our gene-' ation. But this probability is not 'ased upon any amendment of Wall street's methods. It is due to the reation of the Federal Reserve Sys em as a result of the panic. But the Reserve System is conduct d through human agencies, and its 1erits or demerits are directly trace ble to the sort of management it en njoys. The panic of 1907 was a irong inicted by Wall Street on the est of the country. Has the Reserve ystem made such discrimination im ossible in the mature-has it nillified he power of New York's financial istrict to cornor the country's money nd use it to the detriment of its ac ual owners ? To find the answer, one has only o review the great crisis of 1920 in he agricultural districts when ruin vertook large numbers of farmers nd ranchmen. At the hearing last ear on this subject before the Joint ongressional Committee, the former entroller of the currency testified to be bigand general fact that the sys 3m had failed to function as it should ave done, and that its failure had Who Is Sai Your Mon< If YOU are not, the Have you ever thou This bank not earnestl ytbat of your earning it recommends headquarters f ling of funds, E ness. First Natio W. C. DAVIS, A. C. BRADHA J. T. STUKES, L O Found,--that glorious feeling that coe wvith a clear, pure1 ruddy com-. nk of N . . . . $ . ad Profits . 1 SEPU SPROTT, .Preside1 ler. JAMES M. SI ciga ettes 10 They are GOOD! caused fearful losses and great suf fering. It was showh by official figures. from the Federal Reserve bulletin ) that, at the end of October, 1920, the ,12 Federal Reserve banks held a grand total of discounted and pur chased paper amounting to $3,100,000 000, of which $299,000,000 consisted of "bankers' 'acceptances" mainly. from New York City banks. But the "agricultural paper" and "like stock paper" held by the Federal Reserve banks amounted to but $240,000,000, or less than eight per cent of the total accommodations granted by the sys tem. This eight per cent was ve y small in consideration of the fat , that the farmers represent about 48. per cent of our population, and when the aggregate value of farm proper ty, according to the last census, is about $77,000,000,000. But toward all these questions the attitude of Wall Street is defiant and uncompromising. It feels-and per haps this feeling is quite human that while it remains the custodian of the country's surplus wealth, it may (1o as it wills with the sums intrusted to it. It is out of sympathy with the country, and its interests remain lo cal and selfish. If, unfortunately, a schism should ever arise between the East and the West it will be due to the Cynical viewpoint of the Street. The official reports of the controller (Continued on page seven) ing m SOMEONE ELSE is. ight of that? only recommends you save as much 3s as you can, but itself to you as or the safe hand s well as all busi nal Bank. President. VM, Vice-President. Cashier. STI 250 Pimples, 736 Blackheads and 3 Boils! No roward is offered, because they are lost foreveri No question will be asked, except 'one question, "Ho6w did you loso thorn?" Thore is but one answr,--"I cut out new fad treat ments and guesswork; I used one of' the most powerful blood-cleansers, blood-purifiers an d f1e sh-builders known, and that is S. S. S.! Now my~ face is pinkish, my skin clear as a rose, my cheeks are filled out and mf rheumatism, too, Is gone!" This will be your experience, too, if you try '8. S. S. It is guaranteed to be purely tegetablei all its remarkably oe An two sizes. Th larger size la e - more economicatL anning 10,000.00 310, 000.00 it.i./ aROTT, Asst. Cashier..