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WHEN THE POUND SAVED THE DOLLAR "London is evidently the only cen tre to which New York can look for external assistance." This extract from the City In telligence of the "Times," of Thurs day, October 24, 1907, makes strange reading to-day, when we are hear ing so much of New York's willing- ness to afford further financial as- sistance to London if it is needed (writes Hubert A. Meredith in the London "Sunday Despatch"). Yet at the time that it was writ-   ten America was in far, far greater need of financial assistance than London is to-day, for America at that time was passing through a financial panic of unprecedented magnitude.. Too Prosperous. In the early months of 1907, de pressed conditions ruled on Wall Street. The country had enjoyed a period of great prosperity, with the result that there had been over expansion and over-trading in all lines of business, and over-specula tion on Wall-street. Shares sold on the Stock Ex change had risen from 187 millions in 1904 to 284 millions in 1906, while the value of the securities sold had increased during the same period from 12.081 million dollars to 23.393 mnillion dollars. This growth was too rapid, and 1907 opened with a bout of general liquidation. Indications pointed to the fact that the era of exceptional 'prosperity was over and that a re action' was overdue. Coming Storm. New York bankers appreciated the position, and trimmed their sails to meet the storm, which they realised was coming, by calling in bank loans. In March. Liquidation on Wall Street was renewed by the big inte rests, and continued almost cease lessly until October, but the country refused to follow the lead of these far-seeing financiers, and the boom continued. Wild speculation was rife, in every form of new enterprise, in real estate and in a wide range of hazardous ventures. The fact that there was an almost entire cessation of activity on Wall Street was dis regarded, and in the sumnmer of 1907 commercial speculation of every kind continued throughout the coun. try in rapidly increasing volume. So marked was the contrast be tween the sombre views of the deni zens 'of Wall Street and the rest of the business community, that they were invited by a Western newspaper to "shake off their torpor and join the sunshine movement. Then, with I amazing swiftness, the change came, and literally overnight prosperity disappeared and panic reigned supreme. ' This volcanic change was caused by the sudden announcement that the National bank of Commerce, in which Mr. Pierpont Morgan was a dominant factor, had decided no longer to act as the agent for the Knickerbocker Trust Company in New York. This action fell like a thunderbolt. Banks Besieged. The announcement caused an im nmediate run on the Trust. The moment the doors of its palatial headquarters in Fifth-avenue and Thirty-fourth-street were opened on the morning of October 22 they were besieged by depositors. The total deposits of the Trust amounted to no less than £12,000,000   Its officials, realising the danger, immediately took steps to obtain two van loads of notes were quickly being unloaded, yet even, this failed to calm the panic- stricken depositors. Directors and other officials of the Trust forced their way through the crowd, assuring them that every-   one would be paid. No less a sum than £2,000,000 was paid out in a few hours. The Trust, however, had reached the end of ifs liquid resources, and, despite' frantic efforts, further sums were unobtainable. It was suspected   of having carried on its business in an undesirable manner and of being fundamentally unsound, and the New York financiers turned 'a deaf ear to its frenzied requests for help. Sobbing Women. "I am sorry to announce that we I have to suspend payment on all cheques on' account of our inability to obtain currency," were the words used by the head cashier in declaring that the Trust could not continue

paying out The words were heard by hundreds of waiting depositors in silence. Then their full significance was realised, and the air was rent by the hysterical sobs of the very large number of women who. had been waiting for hours. The disaster was reflected on Wall street, where prices crumbled away in a few moments. Money was al most unobtainable, call money ad vancing to no less than 70 per .ent. This crash appears to have opened tht eyes of the American public to the fool's paradise in which they had been living. Distrust became paramount. Many institutions be came suspect. Funds were hastily drawn from one bank and paid into another, only to be again hastily withdrawn when the second institution became the subject of suspicion. Vast sums were hoarded, and it was said that every safe deposit in New York enjoyed an unprece dented demand for safes in which money could be stored by those who trusted no institution. England Steps In. The repercussions of the panic spread to Europe. England step ped into the breach, and gold to the extent of £15,000,000 was shipped to New York. In this connection the Mauretania, on her maiden voyage in November, 1907, carried what was then the record amount of gold ever entrusted to one ship--£2,750, 000 worth. This heavy efflux of gold had a very disturbing effect on our money market. Our bank rate rose to as high as 7 per cent., while our Stock Exchange was adversely affected by the inevitable disturbance and un certainty engendered by the parlous position across the Atlantic. The crisis was brought to a close by the end of 1907, as a result of England's timely aid, coupled with the vigorous action taken by Presi dent Roosevelt and the assistance rendered by the large financial in terests under the lead of J. Pier pont Morgan. Positions Reversed. Twenty-four years ago! One is struck by the change in positions. Unpleasant as our financial situa tion has been of late, wre can fortu nately say with truth that it is not comparable with the American crisis of 1907, when "American bankers got down on their knees to London and Paris for help," when our gold saved the position-when the pound saved the dollar

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