The Hawaiian star. [volume] (Honolulu [Oahu]) 1893-1912, 1908-02-27

W AohlNH lONt -. c., Jan. 2g.-RC-
plying to a resolution by Senator Till
man, agreed TO by the senate Dec 13.
1901 Secretary Cortelyou today sub
mitJed to the upper branch of con-
gress an elaborate defense of his ac-
/ ton in issuing Panama canal bonds
/ and per cent certificates. Incidental
/ ly, the secretary of the treasury makes
. public for the first time the fact that
the bids for Panama bonds reached
/ $2,22O, 1904 $50, or more than forty-four
times the amount offered. The bonds
were awarded to national banks i'm
those cases where the prices offered
were l02 is or higher. The amount
/ thus awarded TO banks was S2I.ggS.O lO.
/ Mr.. Cortelyou also embodies iufor-
nation as TO the general state of the
/ nations finances during the closing
months of 1907, the period over which
the recent financial panic extended.
! The report which is accompanied
by long letter from the secretary to
the president Of the senate, embraces
list Of depositaries and the amount
Of money placed on deposit therein at
various dates, a list Of other banks
! with the amounts of rational deposits
and the securities held therefor: state
ments showing the condition of banks
on August %, 1907, and December 9.
1907 and the amount of bank notes
outstanding at various periods. lists
or banks and individuals that received
| Panama canal bonds without receiving
allotments and subscriptions for 3 per
cent certificates Of indebtedness; data
concerning clearinghouse certificates
issued during the panic and a budget
OF circulars, press announcements and
correspondence relating to government
financial transactions that took place
during the period mentioned in the
I resolution.
Secretary Cortelyou, before analyz-
ing the crisis and setting forth his Off
cial action in regard to it, gives sum-
mary of occurrences in the United
States financial world from the time
he assumed charge as secretary Of the
treasury until the time the special re-
port was compiled. He states that
business conditions were becoming un-
settled when he became financial mem
Der of the cabinet in March, 1907. Va
rious stringencies occurred prior to
August which were promptly relieved.
A plan of weekly deposits of govern
ment funds in various banks was be-
gun Aug. 2S. By Oct II these deposits
had reached a total Of $2S,OOO,OOO.
In October occurred the stirring
events In New York which eliminated
in the closing of the Knickerbocker
! Trust Company and the decision Of
New York banks to issue clearing
house certificates. The treasury trans
ferred to national banks within a few
days the sum of $35OOOOOO and trans
mitted to New York within three days
about $3G,OOO,OOO in small bills. In
New York city alone, the report shows
clearinghouse certificates were issued
in excess Of $1OO,OOO,OOO. BY the mid
Idle of November the treasury had met
the demand for relief to the extent
that the working balance was reduced
to approximately 100000. It being
.apparent that no further deposits could
safely be made, banks were permitted
to substitute bonds suitable for saw
iugs bank investments 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 increase un-
. til It stood on Dec. 81 at $G9O130S95,
as against $GO711S7l2 on oct 10.
On Jan. Is. 1903, the issue had reached
$685. ,927 SOC
"The announcement of the issue OF
new securities by the treasury" says
Mr.. CorteIyou, marked i'm some de-
gree the turning point of the panic. No
further steps were considered ncces-
sary, except to continue the deposit OF
public moneys for a time where they
were available, and early in Deem
Der it became possible to replenish the
cash in the treasury by the withdraw
al Of about $G,OOO,O0O from national
banks i'm New York city. This was fol-
lowed on Jan. 22 by another call fol
O,OOO,O 900 from the New York banks
This will be followed soon by a cal
on outside banks, based upon locaI
conditions rather than upon a fixed
percentage Of their holdings of public
money"
The amount of currency which dis
appeared from circulation from tho
time of the suspension of the Knicker'
booker Trust company until confidence
4 was practically restored in December
is stated as approximately $29G0OOOOO
/. This amounted substantially to one
tenth Of the entire estimated money
- I'm circulation in the United States.
The secretary Of the treasury touch
es upon the gravity Of the situation
I .. Ill 90. 1, fI,gs. ,g,,,tr.,. q, T,f