New-York tribune., 1908-01-30

price of per cent bonds. These bonds SOLD as heh
As no and even at this price the supply in the mar
Iet obt ajnabIe hv national banks was extremely
limited in quantity
RELIEVING THE SITUATION.
1t was TO relieve the situation and couhteia ae'
the premium In currency that i. was 90
November II to receive supsc'ipliohs ioi y = 20
600 OoO In Panama Canal bonds and sloo'VV''VVV
in 2 ner cent certificates Of Indebtedness ana
Thus afford the banks the means OF lhcTcasi4ie
their circulation MIR. Ccrtelyou then says
In order 70 afford this relief the banks to when
awards made OF Panaina e polus " nTira as a
depos!t aud ihose which a!iotnehts "tIe itair,
OF the one-year certificates were allowed to retain
"a aer cent Of the purchase price Thus an induee-
pent was offered for suoscflitiol4s ~ bnntnote
ciTcniation. IL was with deliberate intent, also,
that the offer was nade ti"Ie % e Of the certifi-
Gates became evident that tne nroposed
the entire amount OF she ia.eer oni1asnce I1Iti-
,uately the results of these offers On the par "
saTx TO issue only $24sSI.9O in the Panama bonds
and SIS sS5 40 the certificates OF lloentetii
centins 81 ssa in bends was used the basis for
increasing the banknote circulation OF securing
The announcement Of the issues of new secqTi-
ties by the Treasury acc94mpsnaied P9 the @ Secye
t8ry of the Treasury, marked in some degree the
turning p Poa , q the oI PoIc ctarnF House banks
which on November IS $53.e $50. Increased
IN the next week less than @oaoo. and in the ioiI
lowing weeks turned rapidly downward u1th nd
the amount on December 2s, 1857, only $2olie-
surplus of 81 635. 40 The cash holdings OF these
banks which mad touched minimum on NoFeeail-
her %, lse of l55ll9 rose on January 20, ae
TO S295l * 500. No further steps were consluereo
necessary by the Treasury except to commune M & nT
posts of public moneys for time where tley "ele
available. and early in DeceInper II neca!fs p9 o
vithdrav,ai of about S60oao0o from national banks
in New YoTa City. The premium on currency Cl1 ~
not who'll saPpfar B g o6v me no9aI during
the latter part of December as the panic subsldeo
boarding were gradually restored.
The Secretary did not feel called upon at any
normal movement of gold between international
markets. The movement Of foreign exchange Was
10 l 1n,,,t fr IeiIrii,or fnance hills and in pay
13enf for eicsn IG secries which We're being re-
States The sum of 81 500 GOO 10 gold actually
engaged for export TO Germany on October 19, but
was explained as being a special Transaction
change turned strongly in favor OF imports Of gold
into the United states and d. By the end OF Ocroeer
which eventually sweIled during the next two
months to more than sl0000e 600. None Of this gold
arrived until November but the moral effect OF the
engagements was felt as soon as they were an
through the Channel Of the New York Clearing
House banks. TO threatened points throughout the
which the banks Of New York extended aid to
those, Of other parts OF the country that the ma
the national banks of New York from s17s 22l ee7 on
Thus, not only did the entire volume of gold I'M
ported between these two dates pass through New
boarded by individuals. but the New York banks
gave up s25c0e,0oo of their usual and normal re-
serves
MAGNITUDE OF THE CRISIS
Air CorteIyou says the justification for vigorous
action TO avert the panic was found in the re-
Elarkable disappearance of currency from October
z 10 the early part of december, amounting TO
about s2ooe0o.o0e. He adds:
OF this great absorption Of currency. amounting
substantially TO one-tenth of the entire estimated
than two-thirds of the burden fell upon New York.
IhiS was almost inevitable from the TACT that New
York Is The bnancldl distributing cenue OF lae
country. The figures show that more than the en-
banks outside of New York City, in spite of heavy
York to maintain amount of cash actually
larger by a small amount on December than they
held at the date Of the previous report 10 the Con-
afitai On ,anii The Ta+tonai hanks Of New
York City not only the demand for currency
until their reserves we're reduced s5f,1e56qD below
the legal limit but in addition they imported and
in order TO meet the demands of their depositors
the government deposited with them. The result
was that Of The $2s6o@ooegg @ 90 Gu @currency absorbed %
The banks Of New York city.
partment influenced by the conclusion that ii
was advisable TO take some strong and resolute
home and abroad that the government thor
oughly alive to the situation and determined to
Srs Sorn It's 1io III every POSSIBLE legal ana proper
The fact that the Treasury was IN a strong po-
sition in respect 10 its normal cash balance made
the situation much more easy OF control in some
sR baahae aa aas IseF almost ie oo8e o % She
and the reaction of this influence felt in de-
seemed advisable to the department, in view of
the much sounder condition OF general business
strong measure of relief WITHOUT waiting for the
crisis TO become more acute. ... -.
Secretary OF the Treasury in proposing to the
President an announcement of issue of $1,000
coo in per cent bonds for the construction OF the
Panama Canal and sl0oG90.e9 IN per cent
Treasury certificates for year made the quail
ication that these amounts should be issued only
The one year certificates were issued under
authority OF the OF June 13, 1896, authorizing
such issues when necessary TO meet the expenses
Of the Treasury The criticism has been made
that with a nominal cash balance Of some S2,9.,
by the did arise and the power therefore
did not accrue TO the Secretary TO make an issue
Of such securities TO meet current expenses. From
a strictly legal point OF view there is probably
no question that the determination of the occa-
sion for making such an issue is within the DIS
erection Of the Secretary OF the Treasury. indeed.
II is expressly made SO by Se staItfsi fi+ Fr9a q
in exercising this discretion, with cue regard 10
well as TO the amount shown upon the baiahGe e
sheet. including deposits in national banks. II
] s1co 20 Of tI the t' act Of 1Ss and of his Official
sponsbility hold that it was his duty. in order
TO meet the current needs Of the Treasury to in
woke a financial disaster by attempting TO with
draw funds on deposit with national banks at q, a
meeting the business requirements of the country,
and when any additional act or policy tending 10
subject them 10 further pressure might make alb
solutely impossible. If it not already So the
return TO the Treasury Of the funds required for
meeting its obligations.
With a balance OF only about 10000 in actual
cash in the Treasury after setting off the neces-
sary amounts against outstanding checks and other
similar liabilities, Treasury operations could not be
carried on with and safety without additional
funds. If measures 10 obtain such funds could be
taken in such to restore confidence TO
the financial situation, well TO perform the
more direct service OF keeping the Treasury bal
ance adequate if seemed to the Secretary that the
adoption Of a policy calculated achieve these
ends only within the strict limits OF his