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THE
MUSIC TRADE
REVIEW
T
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Directory ol Piano
The directory of piano manufacturing firms and corporations
found on another page will be of great value, as a reference
Manufacturers
for dealers and others.
Exposition Honors Won by The Review
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NEW YORK, NOVEMBER 2, 1907
EDITORIAL
T
H E financial squall is past and the atmosphere is clearing up
rapidly. The attitude of our great financiers checked the
panicky feeling which existed in New York last week. The prompt
response of the Government has done much to restore confidence
and the concerted actions of the savings banks in requiring legal
notice for the withdrawal of deposits has averted the danger of
possible runs on those institutions. By resolving to issue clearing
house certificates the Associated Banks released a large volume of
money, and with the big importation of gold from Europe, credit
and confidence has been well restored. It should be remembered
that the reliability of solid institutions of the country was never
shown to better advantage than in the recent flurry.
The great trouble is that people lose their heads and like the
man who cries "fire" in a theatre the whole assemblage may be
stampeded in the rush towards the door and many injured and
some killed. It is impossible for any bank, no matter how sound,
to stand a run upon it and pay millions upon millions within a few
hours. How can any bank or trust company pay interest to their
depositors if they keep the money deposited with them locked up
in their vaults subject to immediate demand at all times? Money
does not perform its proper function unless it is in circulation and
is loaned out and in that way bringing returns to the investors.
T
H E whole trouble here, however, has been due to the fact that
certain New York banks and trust companies abandoned
their legitimate functions to become gambling institutions, and in-
stead of confining themselves to the business of sound banking their
officers took the depositors' money for use in private speculation.
It would have been just as honest to have taken their money to the
race track as to have thrown millions of depositors' money into a
lot of wildcat schemes. The result of this has been that some of
the supposedly sound institutions of New York have been brought
to grief, but if we analyze the causes which brought them there
we will find that reckless speculation has been at the bottom of the
whole thing.
H E misuse of depositors' money is not only a violation of
banking laws, but amounts to larceny, therefore the reason
of the plight of certain financial institutions is not that business
conditions are bad or that any honestly managed institution is in-
solvent, but simply that the men in control of these unsound insti-
tutions have betrayed their trust. This should not give cause for
general apprehension or mistrust. The savings banks are sound
and beyond suspicion, so are all conservative banks. The action
of the Government should give confidence to everyone. Of course,
we cannot expect conditions to readjust and quiet down imme-
diately and business assume its normal phase, but it is gratifying
to note the bettered conditions and how splendidly the music trade
institutions have stood up under tremendous pressure. This con-
dition shows a solidity in our own trade which we have believed
existed for some time because we have held that the music trade
was in better shape than many other industries and could stand
successfully almost any strain, and the results of the past week
have shown the correctness of our views.
S
OME business concerns have been seriously hampered for the
reason that some of the banks which have temporarily sus-
pended have contained their deposits which they have been unable
to reach, but a deposit book in a sound bank is a negotiable asset
and a money institution will pay out a certain sum of money on
bank deposits with some of the institutions which have closed.
There is no reason why a financial panic should exist outside of
New York and even here the only financial institutions which are
affected are those whose officers went into outside speculation with
their depositors' money. It is frequently said that New York is
the home of the gambler. That may be true, but those gamblers
who have brought about the conditions of last week are not New
York's children, but outside men. Gotham refuses to father them.
Morse came from Maine only a few years ago. Ryan from Vir-
ginia and Heinze from Montana, Harriman from New Jersey, and
all of those outsiders have found New Yorkers to be "easy marks,"
to speak colloquially, for they have been able to carry on their great
gambling schemes here in a manner that would have been impos-
sible in any other city. The trouble lies in the fact not that New
Yorkers are gamblers, but that this rich city forms an inviting
ground for these outsiders to come here and work their schemes
upon the easy New Yorkers, who seem to bite at every alluring
bait that is offered them without the slightest investigation. All
a man has to do is to say that he has a good thing and the people
fall over themselves in trying to buy gold bricks. But there is a
mighty big world outside of New York, and there's no good reason
why a panicky feeling should spread to outside cities. People
should not lose their heads in times like these.
T
HE reports from the various trade centers show a perfectly
sound condition of the outside banks and we should bear
in mind that the American farm crops are selling this year for an
aggregate °f s ' x billion five hundred millions, a tidy sum surely,
the largest amount that agriculture has ever returned to the people
in any country in any year. Then the mines of gold, silver and
other ores are working at a high state of activity. More coal will
be brought to the surface, more pig iron smelted and more steel
plates rolled than ever before in any twelve months in the Amer-
ican history. In the South the cotton crop is bringing twice what
it did ten years ago. The New England mills are humming busily.
Everywhere wages continue high and employment is easily ob-
tained by all who desire it. If this was a time of business failure,
or lack of employment, or poor crops or general poverty we might
expect that financial depression and a lowering of values would
be in evidence. Why should there be a panic in New York when
the whole vast country is prosperous? Why should our peace be
shaken when legitimate business is earning such profitable returns?
We do not have to look for the answer. We have had dumped upon
us the greatest gang of gamblers and looters of corporations that
any city in the world has ever seen and they have run to the limit,
and while they were running the gamut they have overturned tem-
porarily the whole financial fabric of New York.
S
OME of these looters should be sent to jail. This will be the
most effective way to permanently restore public confidence
and keep business moving along smoothly. It will stop the repeti-