The Northwest in the Recent Financial Crisis

The story of the panic of 1907 varies little from that of former panics.If, however, we profit by its lessons and evolve from its troubles proper financial legislation that in future will protect our banks and commercial interests against danger and loss, the panic of I907 will not have been without compensation.As was the case in 1857, this country in 1907 was seemingly most prosperous.There was much railroad construction, involving the sinking of a great amount of capital far beyond what was immediately produc- tive ; speculation was rife, accompanied by much extravagance in both public and private life; graft and dishonest business methods were exposed ; money was in increasing demand at steadily rising rates; there were many strikes and labor was dictatorial in its de- mands ; real estate was active and there was a reckless expansion of all credit.These conditions are the familiar forerunners of every panic; but our people paid no heed to the warnings uttered by students of finance, spoke jestingly of &dquo;a prosperity pinch,&dquo; and went on in search of easy wealth until the failure of the Knickerbocker Trust Company in New York plunged the country into a senseless panic.As in 1857, the failure of the Ohio Life and Trust Company of Cincinnati; as in 1873, the failure of Jay Cooke & Co. ; as in 1893, the failure of the Philadelphia and Reading Railroad Company and the National Cordage Company, so in I9o7, the failure of the Knickerbocker Trust Company marked the end for some years to follow of our country's reckless financial operations.The bankers of the Pacific Northwest were not altogether un- prepared for financial trouble in the East; they had read the hand- writing on the wall and were warned of approaching danger.And yet, when the storm broke, they were not prepared, for they found themselves stripped of their Eastern balances and forced to depend upon the actual coin within their vaults.Confidence, begat by

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