The Bemidji daily pioneer., 1908-01-30
DEFENDS HIS ACTION.
Secretary Cortelyou Answers Sen.
ate Resolution Of Inquiry.
FINANCIAL SITUATION GRAVE
Justifies Issue Of Panama Bonds and
Certificates Of Indebtedness by AS.
sertins That Some Strong and Reso.
Lutte Step Was Necessary.

l sertln9 That Some Strong and ReSo-
lutte Step Was Necessary.
Washington, Jan. 3o.-In response,
to resolution agreed to by the SEN
ate on Dec. II, 1907, the secretary of
the treasury has transmitted to that
body detailed statements concerning
the award of Panama bonds and per
cent certificates, together with recent
financial transactions of the govern
ment, and also embodying 'ormation
as to the general state ~ nations
finances during the closing months Of
1907, the period over which the re-
cent financial panic extended. se-
Secretary Cortelyou states that bust
ness conditions were becoming inset
tied when he became financial nem-
ber of the cabinet in March. 1907.
Various stringencies occurred prior to
August, which were promptly re-
lieved. A plan of weekly deposits of
government funds in various banks
was begun on Aug. %. By Oct. II
these deposits had reached total Of
$28, 100000. BY the middle of Noyem-
ber the treasury had met the demand
for relief to the extent that the work
ing balance was reduced to apprOXi-
mately $5,000,000. It being apparent
that no further deposits could safely
be made banks were permitted to sub
stitute bonds suitable for savings
bank inves tments for government
bonds, which were held as security
against public deposits. Government
bonds were thus released as security
for additional bank note circulation.
After the issue of Panama bonds
and one-year treasury certificates the
bank note circulation began to in
crease until it stood, on Dec. 81, at
$500, O,130,S95, as against S607,11S,742 on
Oct: Is. On Jan. IS, 1908, the issue
had reached $685. 5,927,8O6. -..'-
'''The announcement of the issues of
new securities by the treasury" says
Mr.. Corte]you, marked in some de-
gree the turning point of the panic.
No further steps were considered nee
essary except to continue the deposit
of public moneys for time where
they were available and early in De-
cember it became possible to replen-
ish the cash in the treasury by the
withdrawal ofe-about $6,000,000 from
national banks in New York city. This
was followed on Jan. 22 by another
call for $10,OO0,O0O from New York
banks. This will be followed soon by
call on outside banks based upon
local conditions rather than upon a
fixed percentage of their holdings Of
public money"
Circulation Reduced One-tenth.
The amount of currency which dis
appeared from circulation from the
time of the suspension of the Knicker-
booker Trust company until confidence
was practically restored in December
is stated as approximately $4,000
900. This amounted substantially to
one-tenth of the entire estimated
money in circulation in the United
States. s--.. 49,
The secretary of the treasury
touched upon the gravity of the situa.
ton abroad as well as in this country
and gives figures concerning the ex-
port of merchandise to show the en-
ergy with which the economic re-
sources Of the country were devoted
to the relief of the situation, the ex.
cess of exports over imports rising
from $1,464,4o4 in August, 1907, to
$l14,89O,665 in December, 1907. ...~.
Secretary Cortelyou defends the
issue of Panama bonds and treasury
certificates by saying that it Was ad
Visable to take some strong and reso-
lutte step which would convince the
public, both at home and abroad. that
tho government was thoroughly alive
to the situation and determined to
give. its aid in every possible legal
and proper form.
Concerning the distribution of pub
lie moneys in banks throughout the
country the secretary says it has been.
done without regard to partisanship
and no section has received other than
the fair and impartial consideration to
the amount of public deposits on Aug.
20 was about $115,000,0O0, of which
the New York banks held $2S,253,3S6
On Dec. the figures show public de-
posits throughout the country amount
ing to $222,352,252. ..-
When Secretary Cortelyous report
was laid before the senate in printed
form Mr.. Culberson inquired of the
Vice president whether the pamphlet
contained all of the secretary's COM
munication. The vice president said
he had not examined the report and
did not know whether the pamphlet
contained all of the message. -..-