The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1908-01-29
Secretary of the Treas
ury Sends to Senate
justification of Rad
iCal Methods.
Meets Charge of Favor
itiSm to New York
Banks With En-
phatic Denial.

'In every measure taken, the Secre-
tary felt that he was bound to have re-
gard not simply to the operations of
the Treasury, but to their effect upon
the financial condition Of the country
The present head of the department has
not assumed this obligation willingly,
and would be glad to be relieved of 1t,
at least in part. by suitable legislation
In these words Secretary Of the Treas
uFy COrtelyOU, responding today to the
Senate resolutions of inquiry, concludes
a 15O00-word statement of justification
for the radical methods he employed in
meeting the recent financial panic, and
which have been SO bitterly criticised
by leaders OF the minority party in both
branches of Congress.
In a review OF the financial situation
since last spring, when ne first started
10 meet perceptible shrinkage in the
currency by public deposits, Secretary
Cortelyou, in effect, claims for his ad-
ministration fun credit for preventing a
disastrous panic.
The issue Of new securities by the
Treasury Department" he declares,
''was Influenced by the conclusion that
il was advisable 10 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 determined
TO give its aid in every possible legal
and proper form. The most potent
weapon at such times in bringing such
conditions TO an end is often one OF
moral effect, 5is of the definite action
taken
Vigorous Action Necessary.
His justification for taking vigorous
action to arrest a panic is based upon
what he declares was a disappearance in
six weeks after the suspension OF the
KnickerbOcker Trust Company, in Octo-
Der, of S22t, ,l25 500 amounting substan-
TALLY. he says, to OUe-teDth of the en-
tire money in circulation i'm the United
States. Of which burden more than two
thirds fell upon New York. He says
that tie gravity of the situation was
further enhanced by the fact that the
pressure upon the money market was
not localized in the United States. It
was then, after enormous public de
posts had failed TO check the adverse
current. that the Secretary says he de-
Cided upon his issue Of Panama canal
bonds and certificates Of Indebtedness.
OF this action the Secretary says:
with a balance Of only about S5,OG0.GC0,
in actual cash, in the Treasury, after
setting Of the necessary amounts
against outstanding checks and other
similar liabilities Treasury operations
could not be carried or with ease and
safety without additional funds.
Within His Legal Powers.
'If the measures to obtain such funds
could be taken IN such a manner as to
restore confdepCe to the financial situa-
ton, as well as TO perform the more di-
rect service of keeping the Treasury
balance adequate. 1t seemed to the Sec
retary that the adoption Of q policy cal
cUlated to achieve these ends was not
only within the strict limits of his legal
powers, but AS within his duty as re-
sponsible in some degree, under our ex-
istiug fiscal system, for the souudness
and security Of the monetary situation
While the entire economic resources Of
the country we're being devoted TO the
relief of the money stringency, not only
on the part Of domestic bankers. but by
foreign exchange houses and by the rail-
WAYS in the prompt movement Of freight
for export, il seemed iuadvisabie Tor
the Secretary of the Treasury To take
any step which would tend TO counter
from tie banks, and thereby adding -
the evils which ii was his earnest desire
20 alleviate and bring 10 an end"
The Secretary says that IL was with
deliberate intent" that the offer Of bonds
was made more attractive than that OF
certificates. the purpose being 10 avoid
having money Withdrawn from the banks
and to increase bank circulation, He
defends his course in alloting the bonds
CCOnrf0ued on Sixth Pgga)