The Birmingham age-herald., 1908-01-30

suitable for savings bank investments Tor government bonds, which were held as se- curity against public deposits. Govern ment bonds were thus released as security for additional bank notes circulation. After the issue of Panama canal bonds and one year treasury certificates, the bank note circulation began to increase until it stood, on December s1, $690, lSO, 6so, as against S607. .11S,742 on October b. on January 1s 1908. the issue had reached $695, ,927,s06.
 Turning Point.
 "The announcement of the issues of new securities by the treasury" says MT Cor telyou, marked in some degree the turn ing point of the panic. No further steps were considered necessary except to con tinue the deposit of public moneys for a time where they were available, and early in December it became possible to re- plenish the cash in the treasury by the withdrawal of about $6000,000 from na- stional banks in New York city. This was followed on January g by another call for S10,0e0,0 900 from New York banks. This will be followed soon by a call on outside banks based upon the local conditions rather than upon a fixed percentage or their holdings of public money"
 The amount of currency which disap- peared from circulation. from the time of thee suspension of the Knickerboeker Truse company until confidence was prac- tically restored in December is stated as approximately S2960OO,0O0. This amounted substantially to one-tenth of the entire estimated money in circulation in the United States.
 The Secretary of the Treasury touched upon the gravity of the situation abroad as well as in this country, and gives figures concerning the exports of mer- chandise to show the energy with which the economic resources of the country were devoted to the relief of the situation, the excess of exports over imports rising from s1, AGA. .404 in August 1907, to $114,s9o,- 665 in December, 1907
 Defends Bond Issue.
 Secretary Cortelyon defends the issue of Panama bonds and treasury certificates by saying that 1t was advisable to take some strong and resolute step which would convince the public, both at home and abroad, that the government was thoroughly alive to the situation and de- termined to give it's aid in every possible legal and proper form.
 Concerning the allotment of the new issues of securities he says:
 Their character was such that it was anticipated most of the subscriptions. would come from national banks; that the per cent bonds afforded such privileges to national banks as basis of note cir eulatlon, that these were strong induce ments to the banks to outbid private in vestors, who would find in the bonds noth- Ing more than the best form of security, paying only per cent per annum and that it was expeeted-and this expecta- tion was fulfilled-that the bonds would be used chiefly as basis for additional bank note circulation. Even if there had been no other justification for limiting subscriptions to national banks this con- sideration would, in the opinion of the de- partment, have justified an absolute re- striction of the awards to national banks
 ''The legal right of the department to make allotments of the bonds and se- curities to such persons and banks and in such amounts as it might see fit can hardly be called into question, in view of the fact that the circular offering the Panama bonds contained this distinct pro- vision.