Don’t Panic!—Yet

It might very properly be urged that the present is too early a date for us to draw wise conclusions from the lessons of the recent financial crisis. Indeed, one can hardly speak of it, as I did just now, as the recent crisis. It is the present crisis. If we are not well in the midst of it,we at least continue to be surrounded with many unpleasant features that have formed a part of that crisis. We are still in a situation where a great majority of the banks of the country have practically suspended cash payments.

Domestic exchanges are still seriously disorganized. After the most heroic measures for relief, taken by the Treasury and by banks generally, we continue to be surrounded by abnormal conditions, and the day is somewhere in the future when we can look back with anything like academic interest and comment with intelligence o n the true lessons which have been taught by this extraordinary financial event.

Although it may be too early to speak with certainty about these lessons, there is good excuse to give consideration to the phenomena of the crisis, even at as early a date as the present. Sufficient excuse may be found in the profound necessity which exists for an understanding of the causes and a comprehension of the principles which must underlie proper remedies for such a financial panic. There has never been a time in our political history, I believe, when there was more necessity for a broad educational movement in relation to financial affairs, than at the present time. The necessity for education so that the public will comprehend the underlying principles governing sound banking and a proper currency is as great today as was the necessity for education in regard to the standard of value ten years ago.

The causes of the remarkable financial disturbances which we have been experiencing are more or less obvious. Still, men are not agreed upon them nor upon the varying degree of importance that should be allotted to those causes that are obvious. Some men will trace the roots of the trouble to the policies of the President of the United States. Some will trace them directly to the activities of the “gambler” of Wall Street, as they choose to call that portion of the community. Now the truth lies at neither of these extremes nor indeed does it lie between them. It is much broader, deeper and more comprehensive than either of these suggestions.

Frank A. Vanderlip*. ‘The Panic as a World Phenomenon’. The ANNALS of the American Academy of Political and Social Science, 1908 31: 2.

*  Vice-President National City Bank, New York.

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