Waterbury evening Democrat. [volume] (Waterbury [Connecticut]) 1903-1917, 1908-02-07
CORTELYOU ACCUSED
Senator CuIberson Arraigns Sec
rotary as a Law Breaker.
MAKES SIX SEPARATE CHARGES
Says New York Banks Were Favored
In the Distribution of Panic Relief
Funds While Other Parts of Country
Were Neglected.

SayS wow roTN odHNs "oTc rdNoTco
| In the Distribution of Panic Relief
Funds While Other Parts of Country
Were Neglected.
Washington, Feb. 7.-Senator Culber-
son (Tex), the minority leader, charg-
ed that Secretary Cortelyou in his pan
ic measures violated the law:
FirSt.-By issuing Panama bonds, as
the proceeds were not needed to con-
tinue work on the canal.
Secondly excluding individual bid
ders, because the law authorizing their
sale stipulates that all citizens of the
United States shall have an equal OPP
portunity to purchase them.
Thirdly using the proceeds of the
bond sale for general purposes, as the
law expressly provides that such pro-
ceeds shall only be used for canal
work
Fourth.-By issuing certificates of in
debtedness, which were not needed to
meet public expenditures.
Fifth.-By permitting national banks
to issue circulation on certificates of
Indebtedness.
Sixth.-That the secretary violated
the law and abused his official discre-
ton in distributing public money, his
methods being unfair and inequitable,
much of the money being used by the
national banks for speculative pur-
poses.
Senator Culberson devoted himself
chiefly to the sixth count in the indict-
ment. In his speech he gave the re-
suit of his analysis of the recent report
of the secretary of the treasury and
complained that the committee on
finance had failed to take any action
on his resolution directing that it in
Quire into the causes of the recent
financial stringency.
Charges Gross Favoritsm.
New York city, with about one.
sixth of the capital and surplus Of all
the banks" said the senator, secured
one-third of all the public money on
deposit. The eastern states, including
New York, having only about three
times the capital and surplus of the
southern states, were given four times
as much of the public mohey. The in
crease of government deposits in New
York city alone from August to De-
cember was $47, 100000, or three-fifths
of the entire increase of S79,0O0,00O
THE state of Texas, with 100000
people and banking capital and sur
plus of $40.OOOOOO, compared with
Washington, with population of 300,-
900 and a bank capital and surplus of
SIS, 900, got but $1.73S,000 of the
public money distributed Dec. 3, while
Washington got $4,5S1, 600"
Mr.. Culberson charged that che re-
port of the secretary of the treasury
contained denial of some of its own
statements.
Loans to Stockholders.
'The secretary" he said, says In
effect that $25.000.O0O of specie held by
the New York banks and S40,O00,O00 of
reserve were used to meet the call of
outside banks whose reserve the banks
of New York held. whereas the report
Of the secretary shows clearly that the
amount which the New York city
banks owed all other national banks
decreased between Aug. % and Dec. 3
only $10,s20.511. and it is significant !
that. although the New York city |
banks did not pay to the banks outside /
of that city more than the Sl0,S20,511,
they increased their loans and dis. |
counts during the same time $4,000
600.
Il want these figures TO ring in the
ears of the American people. They
show that while this panic was on and |
while individual depositors were clam
oring for their money. while the New
York banks were issuing clearing
house certificates. while the outside
banks were demanding their reserve.
the national banks of New York in
creased their loans and discounts by
SIS. 100000"
Money Given to Wall Street.
Mr.. Culberson declared that part of
these loans and discounts went to
''ichree hundred and two millions
loaned on collateral of Wall street" he
exclaimed. and yet they suspended
payment to their individual depositors
and to their banking correspondents
the country. And they did
Il when they had money in their treas
ury with which TO meet their obliga-
lions.
The Aldrich bill" he declared.
''would give the banks more power
and would foster stock and bond spec
nIation by the banks and still further
against the general public
and in the interest Of the bond holding
classes
Major General Howard Promoted.